30th May 2007 08:00
Meikles Africa Ld30 May 2007 AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2007 FINANCIAL HIGHLIGHTS Historical Cost Inflation Adjusted $1,13 trillion Attributable profit: $1,04 trillion $6 914 Headline earnings per share: $6 366 2 828% to $357 Turnover increased by: 42% to billion $956 billion 6 213% to $127 Operating profit increased by: 108% to billion $90 billion $87 billion Funds generated from operations: $240 billion Dividend Final dividend per share amounts to $163, bringing the total for the year to $170, amounting to $27,8 billion (historical cost). CHAIRMAN'S STATEMENT The significance of the Group's foreign assets makes it appropriate to adopt anexchange rate which discloses values that are more aligned to market forces. Inan effort to more fairly present real value to its shareholders, the Group hasapplied the Old Mutual implied rate (OMIR) in the translation to local currencyof net foreign assets and operations. Local operations continued to focus on strategies which ensured operating profitexceeded inflation. Retail • Stock procurement and pricing were managed so that the competitive advantage of these businesses was enhanced. • Working capital management responded rapidly to interest and exchange rate movements. • Cash flows were fine tuned to strike a balance between cash availability and ideal stock holdings. • Markets were evaluated with a view to developing new units in areas where opportunities arise. Hotels • Product standards were maintained in all areas of service delivery commensurate with Leading Hotels of the World. • Pricing of goods and services ensured that a competitive edge was maintained locally and internationally. Results (commentary is on inflation adjusted figures) Foreign Investments and Funds • The fair value gains on foreign investments amounted to $466 billion. • The exchange gains on funds deposited with the Reserve Bank of Zimbabwe amounted to $517 billion. Other Investments • The Group's share of profit in Kingdom Financial Holdings and Meikles Financial Services amounted to $10,2 billion. The market value at 31 March 2007 of our investment in Kingdom was $94,7 billion and subsequent to the year-end further significant gains have been recorded. Retail • Turnover increased by 29% to $797 billion. • Margins were reduced because of competition in the market and price controls, coupled with awareness of increasing limitations of customer disposable incomes. • Expenses were above official inflation driven by increases in staff costs, utility charges and general maintenance expenditure. • A new TM Supermarket branch was opened at Kariba and others are in progress. • Improved stock turns were achieved in both TM and the Department Stores. • Divisional rationalisation of Clicks created considerable cost savings. • Profit before tax at $61 billion was 31% above last year. Hotels • The lease for The Victoria Falls Hotel has been renewed for a further twenty five years, enabling the partnership with Zimbabwe Sun Limited to embark on capital projects to enhance the traditional product. • Some refurbishment of the Cape Grace Hotel has taken place and more is planned in the forthcoming year in order to enhance the hotel in an increasingly competitive international market. • Growth in occupancies was 13% bringing Group occupancy to 36% with all hotels showing improvement. • Turnover increased by 189% to $159 billion and contributed to an operating profit which was 472% above 2006. • There was a substantial increase in profit before tax to $57 billion, well above last year, driven to a large extent by OMIR and the translated results of Cape Grace Hotel. Outlook The Group will continue to manage trading conditions in the local market to bestadvantage. Focus on working capital management will be maintained. The Group's foreign investments will continue to grow in hard currency terms.External investments will continue to be developed when opportunities arise. Social responsibility The Group continues to be mindful of the plight of the aged and other vulnerablegroups and contributes to the homes and care centres across Zimbabwe in aneffort to assist in the welfare of our country's senior citizens. J.R.T. MOXONCHAIRMAN FINAL DIVIDEND ANNOUNCEMENT On the 24th of May 2007, the Board approved a final dividend Number 75 of $163per share on 163,656,787 shares payable to members registered in the books ofthe Company at the close of business on 15 June 2007. Shareholders will begiven the option to elect whether to take their dividend in cash or in shares inthe Company at the last selling price of the shares on the 28th of May 2007. The Transfer Books and Register of Members will be closed from 16 June 2007 to18 June 2007. Dividend warrants will be posted or direct and cheque paymentsmade to shareholders on or about 11 July 2007. The dividends payable tonon-resident shareholders will be paid in accordance with Exchange ControlRegulations. Shareholders' withholding tax will be deducted where applicable. By order of the Board A.P. LANE-MITCHELLSECRETARY 28 May 2007 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 B Thorn, M S Wilson. AUDITED CONSOLIDATED INCOME STATEMENTFor the year ended 31 March 2007 INFLATION ADJUSTED HISTORICAL COST Restated Restated(all amounts in millions of dollars) 31 March 31 March 31 March 31 March 2007 2006 2007 2006 Revenue 956,181 672,909 356,960 12,191 Operating (loss) / profit before monetary adjustment and exchange gains (42,177) (22,328) 79,546 1,893 Net monetary gain from operating activities 113,038 63,223 - -Exchange gains on net current assets 19,548 2,472 47,541 120 Operating profit 90,409 43,367 127,087 2,013 Investment income 30,419 16,903 15,266 362Finance costs (11,666) (7,321) (4,563) (105)Net exchange gains 850,585 37,643 1,017,810 4,111Increase in value of quoted investment 133,042 8,586 147,537 631Net monetary gain from financing activities 110,568 735 - -Share of profits of associates 10,189 (4,426) 6,784 79Loss on disposal of subsidiaries - (1,791) - - Profit before tax 1,213,546 93,696 1,309,921 7,091 Income tax expense (162,789) (23,129) (168,598) (1,160) Profit for the year 1,050,757 70,567 1,141,323 5,931 Attributable to:Equity holders of the parent 1,042,253 63,019 1,132,161 5,652Minority interest 8,504 7,548 9,162 279 1,050,757 70,567 1,141,323 5,931 Basic earnings per share ($) 6,369 385 6,918 35IIMR Headline earnings per share ($) 6,366 388 6,914 34Weighted average number of shares 163,656,787 163,656,787 163,656,787 163,656,787 AUDITED CONSOLIDATED BALANCE SHEETAt 31 March 2007 INFLATION ADJUSTED HISTORICAL COST Restated Restated(all amounts in millions of dollars) At At At At 31 March 31 March 31 March 31 March 2007 2006 2007 2006 ASSETS Property, plant & equipment 454,192 122,152 372,055 2,273Investment in associates 38,716 15,488 8,509 143Other financial assets 483,783 48,709 483,350 2,099Goodwill 24,915 24,915 2 2Current assets 1,080,519 199,258 1,057,441 8,193 Total assets 2,082,125 410,522 1,921,357 12,710 EQUITY AND LIABILITIES Attributable to equity holders of the parent 1,390,195 230,610 1,266,415 6,381Minority interest 15,708 9,776 8,938 246Deferred tax 137,278 40,244 107,060 435Other non-current liabilities 164,777 36,127 164,777 1,571Current liabilities 374,167 93,765 374,167 4,077 Total equity and liabilities 2,082,125 410,522 1,921,357 12,710 AUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFor the year ended 31 March 2007 INFLATION ADJUSTED HISTORICAL COST (all amounts in millions of dollars) Restated Restated 31 March 31 March 31 March 31 March 2007 2006 2007 2006 Profit for the year 1,042,253 63,019 1,132,161 5,652Cape Grace Hotel - translation of foreign entity 120,585 (242) 127,752 383Share of reserves of associate 6,315 1,025 1,594 13 Share of prior year adjustment of associates' reserves - 370 - (2) Dividend - prior year final (4,858) (5,724) (327) (25)Dividend-current year interim (4,710) (3,025) (1,146) (61) Attributable to equity holders of parent 1,159,585 55,423 1,260,034 5,960Minorities 5,932 4,296 8,692 237 Shareholders' equity at the beginning of the year 240,386 180,667 6,627 430Shareholders' equity at the end of the year 1,405,903 240,386 1,275,353 6,627 AUDITED CONSOLIDATED CASH FLOW STATEMENTFor the year ended 31 March 2007 INFLATION ADJUSTED HISTORICAL COST Restated Restated(all amounts in millions of dollars) 31 March 31 March 31 March 31 March 2007 2006 2007 2006 Cash flows from operating activitiesProfit before tax 1,213,546 93,696 1,309,921 7,091Adjustments for: Non-operating cash flow (899,328) (42,497) (1,083,480) (4,584) Non-cash items (79,454) 13,217 (142,603) (569) Operating cash flow before working capital changes 234,764 64,416 83,838 1,938Working capital changes 4,816 (30,561) 3,525 (403) Cash generated from operations 239,580 33,855 87,363 1,535Income taxes paid (16,776) (17,235) (4,815) (97) Net cash generated from operating activities 222,804 16,620 82,548 1,438 Net cash used in investing activities (10,337) (3,292) (7,185) (318) Net cash used in financing activities (24,357) (50,617) (436) (312) Net increase / (decrease) in cash and cash equivalents 188,110 (37,289) 74,927 808 Cash and cash equivalents at beginning of year 99,196 87,686 4,313 376 Net effect of exchange rate changes on cash and cash equivalents 538,668 40,115 733,885 4,231Translation of foreign entity (6,562) 8,684 6,287 (1,102) Cash and cash equivalents at end of year 819,412 99,196 819,412 4,313 AUDITED SEGMENT INFORMATION INFLATION ADJUSTED HISTORICAL COST Restated Restated(all amounts in millions of dollars) 31 March 31 March 31 March 31 March 2007 2006 2007 2006 RevenueHotels 159,242 55,053 73,062 1,184Retail 796,939 617,856 283,898 11,007 956,181 672,909 356,960 12,191Operating profit / (loss)Hotels 59,076 10,329 51,974 391Retail 47,871 35,737 60,436 1,576Corporate (16,538) (2,699) 14,677 46 90,409 43,367 127,087 2,013Segment assetsHotels 575,330 120,508 544,882 3,052Retail 298,834 164,702 229,632 4,852Corporate 1,207,961 125,312 1,146,843 4,806 2,082,125 410,522 1,921,357 12,710 SUPPLEMENTARY INFORMATION INFLATION ADJUSTED HISTORICAL COST (all amounts in millions of dollars) 31 March 31 March 31 March 31 March 2007 2006 2007 2006 Capital expenditure 35,918 10,662 23,353 256Capital commitments authorised but not yet contracted for 390,196 64,097 390,196 2,787Depreciation and impairment 20,177 7,445 4,934 62Market value of investments - Associate - Kingdom Financial Holdings Limited 94,736 6,211 94,736 270 - Investment - Mvelaphanda Group 148,179 15,154 148,179 659Borrowings 76,090 13,901 76,090 605Finance and operating lease commitments 124,883 23,992 124,883 1,043Guarantees 67,953 12,821 67,953 557 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. Prior year adjustments Reinstatement of share premium A difference arose between the Group and Company share premium figures at thetime of the original listing. A reinstatement to equalise the Group and theCompany share premium has been done at Group level in the current year. Treatment of the operating lease payments and finance lease cost adjustments Past practice, whereby operating lease payments were expensed on a paymentbasis, was based on an interpretation that was generally accepted. Thisinterpretation recognised the contractual payment basis as the mostrepresentative of the time pattern of the company's benefit obtained from theleased property. The company is obliged to adopt a straight line basis ofaccounting for all lease payments required to be made over the entire leaseperiod. This has therefore been adjusted with immediate effect in terms of IAS17. Comparative figures have been restated accordingly. The adjustments to the finance lease arose from a treatment in the initialrecognition of additional costs to the finance lease asset and the finance leaseliability. Comparative figures have also been restated accordingly. The effect of these prior year adjustments are fully disclosed in the annualreport. Note to inflation adjusted financial statements The consumer price indices used to restate the financial statements at 31 March2007 are as follows: Index Factor31 March 2007 16,221,182.2 1.031 March 2006 705,209.4 23.031 March 2005 69,577.2 233.1 For further information contact Bryan Thorn +263-4-252068/78 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Meikles