‘Meikles in strong financial condition’

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Meikles Limited says it is in a good position to continue with its expansion projects due to its sound and stable financial situation, with cash and bank balances amounting to more than US$19 million.

Mr Thabani Mpofu, the group’s secretary said the business remained optimistic about its prospects despite the evolving challenges in the operating environment.

“The group has no bank borrowings. Both expansion and replacement capital expenditure plans continue to be implemented as the group has adequate financial resources at its disposal,” he said in a trading update for the quarter ended December 31, 2022.

Mr Mpofu noted the trading environment for the quarter under review was characterised by tighter financial conditions in the market due to the policy measures implemented by the Government to stabilise prices and the exchange rate from July 2022.

He said the policy measures have had a positive impact on both inflation and the exchange rate.

“However, electricity supply challenges worsened during the quarter under review leading to increased use of generators and in some instances reduction in operating hours,” he said.

During the quarter under review, sales volumes for the supermarkets segment decreased by 16,49 percent but were resilient to the challenges in the operating environment and grew by 2,50 percent for the nine months’ period ended December 31, 2022.

Room occupancy for the hospitality segment grew by 9,85 and 18,43 percentage points for the quarter and nine months, respectively.

Revenue per available room increased by 94 percent for the quarter in US dollar terms while the revenue per room went up by 210 percent for the nine months period.

According to Mr Mpofu, group revenue grew by 40 percent and 58 percent in inflation adjusted terms for the quarter and the nine months, in that order.

In historical cost terms, group revenue grew by 399 percent and 411 percent for the quarter and the nine months respectively.

“All operating subsidiaries generated positive cash flows during the period under review,” Mr Mpofu said.

He said the supermarkets segment completed and opened two new stores, Pick n Pay Simon Mazorodze and Pick n Pay Madokero during the quarter under review.

He noted that branch network expansion and refurbishments are funded from operating cash flows. – Herald