30th May 2006 08:00
Meikles Africa Ld30 May 2006 AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2006 SALIENT FEATURES References are to historical information Net turnover Increased by 555% to $12,2 trillion Operating profit Increased by 1023% to $1,9 trillion Attributable profit Increased to $5,7 trillion Exchange gains $4,2 trillion compared to $86 billion in the previous year Investment income and quoted investments Income and increase in value, up by 1581% to $992 billion Dividend per share At $2,375 per share, the dividend is up 1087% on the prior year. The final dividend of $2,000 per share amounts to $327 billion Cash generated and funds available Funds generated from operations were $1,1 trillion (2005: $281 billion) Funds on hand amount to $4,3 trillion COMMENTARY Meikles Africa set out an ambitious five-part strategy for the year ended 31March 2006 and each division has delivered results that exceeded expectations. The strategy enabled operations to retain focus and consistency in our everchanging environment. Each division was encouraged to adapt to opportunitieswithin the framework. The following goals, which ensured operating profit in excess of inflation, werepursued; • That a greater share of a diminishing market be secured. • That no compromise be made in the procurement of sufficient inventory. • That working capital management responded rapidly to interest and exchange rate movements. • That store upgrades and TM expansion projects be pursued vigorously. • That Meikles Africa Hotels maintained standards commensurate with Leading Hotels of the World. Meikles Africa is pleased to report that the results for the year reflect aperformance that not only shows financial growth in all divisions but a solidrealisation of potential relative to competitors. The inflation adjusted financial statements show real growth in turnover andoperating profit after the net monetary gain, confirming the strength of tradingand management of costs. The balance sheet also reflects a significant growthin equity matched by the enhancement of the net asset value of the Group. Operations TM Supermarkets (Private) Limited • Net turnover grew by 576% to $9,8 trillion. • Operating profit increased by 1034% to $1,2 trillion. • Investment income increased by 850% to $365 billion. • Profit before tax was $1,6 trillion, a 997% increase on prior year. • Market shift in sales mix to basic product lines was successfully managed. • Shrinkage was satisfactorily contained. • A new unit was opened in Chikanga, Mutare in March 2006. Contractors are on site in Kariba and the finalisation of leases is at an advanced stage for three new outlets. Department Stores • The results, excluding Medix, reflect an increase in turnover of 376% to $1,1 trillion and an increase in profit before tax of 681% to $253 billion. • Stock turns were 3,8 against 2,9 last year. • Managing stock has required a policy of replacement pricing whilst retaining a competitive edge. • The new "Storeline" Point of Sale system, which is 75% complete, will assist in providing information to more effectively deal with pricing, unit stock control and sales data. Hotels • Turnover increased by 865% to $1,2 trillion. • Profit before tax for the division at $366 billion was up 1730% on the prior year. • Profit before tax for the Zimbabwe Hotels at $107 billion was 1598% up on the prior year. • At the Cape Grace, profit before tax at $259 billion was up 1972% on the prior year - an increase of 24% in South African Rand terms. • Tight cost control and the movement of the exchange rate contributed to the good results for the division. • Occupancy at Victoria Falls Hotel increased by three percentage points while that at the Meikles Hotel decreased by the same figure. • Occupancy at the Cape Grace grew by seven percentage points. • The hotels were cash sufficient with all planned capital expenditure being financed from operating cash flow. • Meikles Africa Hotels continued to dominate local and South African awards for quality service and product. Group Investments • Mvelaphanda showed positive growth of more than 40% in the Rand share price and gains arising from exchange rate movement. • Plans to achieve a larger strategic alignment with Mvelaphanda Holdings are progressing. • Exchange gains amounted to $4,2 trillion on foreign funds. • The Group's share of the results of Kingdom Financial Holdings was $60 billion, compared to $1,2 billion in the prior year. • Meikles Africa, together with Econet, will underwrite the Kingdom rights issue of $1,5 trillion in June 2006. Social Responsibility The Group's main focus is to continue supporting the aged. To this end theGroup is currently donating in excess of $500 million per month and this will beincreased at least in line with inflation. Conclusion The Meikles Africa Group performed well in areas under its control during theyear. If exchange rate movement had been allowed to track inflation in the lastquarter, there would have been substantial enhancement in profit over thatachieved. The Group has advanced its competitive edge and it is expected thatthis will be maintained in the coming year as evidenced in results so far. Thebalance sheet strength will ensure that the Group is well poised to manage theeconomic environment JOHN MOXON CHAIRMAN FINAL DIVIDEND ANNOUNCEMENT On the 24th of May 2006, the Board approved a final dividend Number 73 of $2,000per share on 163,656,787 shares payable to members registered in the books ofthe Company at the close of business on 16 June 2006. The Transfer Books andRegister of Members will be closed from 19 June 2006 to 3 July 2006. Dividendcheques will be mailed to shareholders on or about 3 July 2006. The dividendspayable to non-resident shareholders will be paid in accordance with ExchangeControl Regulations. Shareholders' withholding tax will be deducted whereapplicable. By order of the Board A.P. LANE-MITCHELLCompany Secretary 24 May 2006 All current financial, operational and structural information on Meikles AfricaLimited can be obtained by visiting Meikles Africa Limited's website at :http:/www.meiklesafrica.co.zw Directors : J R T Moxon (Chairman), M A Masunda, D W Mills, D E Stephens, C BThorn, M S Wilson. AUDITED CONSOLIDATED INCOME STATEMENT For the year ended 31 March 2006 INFLATION ADJUSTED HISTORICAL COST Restated(all amounts in millions of dollars) Year ended Year ended Year ended Year ended 31 March 31 March 31 March 31 March 2006 2005 2006 2005 Revenue 29,257,522 25,676,616 12,190,889 1,860,547 Operating (loss) / profit (922,802) (630,630) 1,916,362 170,680Net monetary gain 2,854,702 1,277,860 - - Operating profit after net monetary gain 1,931,900 647,230 1,916,362 170,680 Investment Income 734,935 707,113 361,924 53,607 Finance costs (318,299) (1,149,077) (105,478) (78,479) Net exchange gains 1,744,151 (1,615,286) 4,230,581 86,083 Fair value adjustment on investment property - 62,344 - 6,163 Increase / (decrease) in value of quoted investment 373,304 (229,187) 630,701 5,472 Net share of result of associates (192,426) 31,218 79,235 15,223 Loss on disposal of subsidiaries (77,892) - (666) -Profit / (loss) before taxation 4,195,673 (1,545,645) 7,112,659 258,749 Taxation (948,112) (95,173) (1,127,913) (52,472) Profit / (loss) for the year 3,247,561 (1,640,818) 5,984,746 206,277Attributable to:Equity holders of the parent 2,919,365 (1,779,808) 5,706,027 181,470Minority interest 328,196 138,990 278,719 24,807 3,247,561 (1,640,818) 5,984,746 206,277 Basic earnings / (loss) per share ($) 17,838 (10,875) 34,866 1,109 IIMR Headline earnings / (loss) per share ($) 17,956 (9,792) 34,796 1,108 AUDITED CONSOLIDATED BALANCE SHEET At 31 March 2006 INFLATION ADJUSTED HISTORICAL COST Restated(all amounts in millions of At At At Atdollars) 31 March 31 March 31 March 31 March 2006 2005 2006 2005 ASSETS Property, plant & equipment 5,218,740 4,349,669 2,180,780 146,011Investments-quoted 1,248,080 941,867 773,273 72,324Investments-unquoted 1,543,105 899,059 1,469,240 81,130Other non-current assets 1,083,277 1,083,277 1,583 1,583Current assets 8,663,570 6,815,974 8,192,991 651,191Total assets 17,756,772 14,089,846 12,617,867 952,239 EQUITY AND LIABILITIESAttributable to equityholders of the parent 10,686,552 7,616,912 6,715,454 419,842Minority interest 425,062 238,248 245,657 8,663Deferred taxation 1,603,446 1,220,515 615,044 29,027Other non-current 1,033,814 1,156,324 1,033,814 114,085liabilitiesCurrent liabilities 4,007,898 3,857,847 4,007,898 380,622Total equity and liabilities 17,756,772 14,089,846 12,617,867 952,239 AUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 31 March 2006 INFLATION ADJUSTED HISTORICAL COST Restated(all amounts in millions of dollars) Year ended Year ended Year ended Year ended 31 March 31 March 31 March 31 March 2006 2005 2006 2005 Profit / (loss) for the year 2,919,365 (1,779,808) 5,706,027 181,470Cape Grace Hotel - translation of 469,496 52,229 664,905 1,142foreign entityShare of reserves of associate 44,554 (49,462) 12,725 (1,152)Share of prior year adjustment of 16,548 - (2,125) -associates' reservesDividend - prior year final (248,820) (148,447) (24,549) (6,546)Dividend-current year interim (131,503) (105,613) (61,371) (8,184)Attributable to equity holders of parent 3,069,640 (2,031,101) 6,295,612 166,730Minorities 186,814 (81,724) 236,994 5,333Shareholders' equity at the beginning of 7,855,160 9,967,985 428,505 256,442the yearShareholders' equity at the end of the 11,111,614 7,855,160 6,961,111 428,505year AUDITED CONSOLIDATED CASH FLOW STATEMENT For the year ended 31 March 2006 INFLATION ADJUSTED HISTORICAL COST Restated(all amounts in millions of dollars) Year ended Year ended Year ended Year ended 31 March 31 March 31 March 31 March 2006 2005 2006 2005 Cash flows from operating activities Profit / (loss) before taxation 4,195,673 (1,545,645) 7,112,659 258,749Adjustments for: Non-operating cash flow (1,979,088) 1,969,110 (4,571,268) (58,319) Non-cash items 685,035 990,718 (580,879) (25,173) Operating cash flow before working capital changes 2,901,620 1,414,183 1,960,512 175,257(Used in) / generated from working capital changes (1,328,717) 1,899,786 (864,813) 105,791Cash generated from operations 1,572,903 3,313,969 1,095,699 281,048Taxation paid (749,362) (375,232) (97,474) (16,127)Net cash generated from operating activities 823,541 2,938,737 998,225 264,921 Net cash used in investing activities (143,145) (184,053) (318,350) (41,330) Net cash used in financing activities (2,585,794) (2,871,133) (312,948) (169,928) Net (decrease) / increase in cash and cash equivalents (1,905,398) (116,449) 366,927 53,663 Cash and cash equivalents at beginning of year 3,812,521 5,489,361 376,150 242,104 Net effect of exchange rate changes on cash and cash 1,744,151 (1,615,286) 4,230,581 86,083equivalentsTranslation of foreign entity 661,683 54,895 (660,701) (5,700) Cash and cash equivalents at end of year 4,312,957 3,812,521 4,312,957 376,150 AUDITED SEGMENT INFORMATION INFLATION ADJUSTED HISTORICAL COST Restated(all amounts in millions of Year ended Year ended Year ended Year endeddollars) 31 March 2006 31 March 2005 31 March 2006 31 March 2005 RevenueHotels 2,393,665 1,708,970 1,183,981 122,582Supermarkets 23,793,040 20,135,695 9,858,031 1,459,241Retail 3,070,817 3,831,951 1,148,877 278,724 29,257,522 25,676,616 12,190,889 1,860,547Operating profit / (loss) aftermonetary adjustmentHotels 495,978 (32,485) 348,369 23,633Supermarkets 1,117,398 773,897 1,248,707 110,069Retail 475,450 (1,385,370) 317,020 42,732Corporate (156,926) 1,291,188 2,266 (5,754) 1,931,900 647,230 1,916,362 170,680Segment assetsHotels 5,155,701 4,042,580 2,959,270 184,215Supermarkets 4,812,048 4,557,551 3,774,278 360,685Retail 2,349,040 2,986,578 1,078,151 190,978Corporate 5,439,983 2,503,137 4,806,168 216,361 17,756,772 14,089,846 12,617,867 952,239 SUPPLEMENTARY INFORMATION INFLATION ADJUSTED HISTORICAL COST(all amounts in millions of dollars) Capital expenditure 463,588 246,184 255,783 19,336 Capital commitments authorized but not yet 2,778,059 794,969 2,778,059 78,433contracted for Depreciation 357,974 483,571 60,650 9,298 Market value of investments - Associate - Kingdom Financial Holdings 270,045 669,054 270,045 66,010Limited - Investment - Mvelaphanda Group 658,876 285,572 658,876 28,175 Interest bearing borrowings 1,417,400 1,776,939 1,417,400 175,316 Guarantees 557,445 197,260 557,445 19,462 Accounting policies The International Accounting Standards Board has released a number of newaccounting standards and made amendments to existing standards. The impact ofthese changes has been assessed and applied. The inflation adjusted financial statements reflect a change in accounting forthe effect of the restatement of the foreign entities' income statements interms of IAS 29, and the restatement of the historical movements in the foreigncurrency translation reserve (FCTR), in line with preferred treatment afterfurther interpretation of IAS 29 (Financial Reporting in HyperinflationaryEconomies) and IAS 21 (Revised) The Effect of Changes in Foreign Exchange Rates. The effect of the income statement restatement is now taken against FCTR and notmonetary adjustment as in the past. Previously the FCTR was restated from themonth in which it was generated. These changes have the effect of reallocatingamounts between the FCTR and retained income. The effect of these changes is toreduce the prior period inflation adjusted loss by $27 billion and to increasethe opening retained income at 1 April 2004 by $2,096 billion, the correspondingbalance sheet adjustment being to FCTR. Note to inflation adjusted financial statements The consumer price indices used to restate the financial statements at 31 March2006 are as follows: 31 March 2006 705,209.431 March 2005 69,577.231 March 2004 31,102.7 For further information contact either: Zimbabwe Bryan Thorn +263-4-252068/78 Roy Franklin +263-4-252068/78 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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