14th Dec 2007 08:00
Meikles Africa Ld14 December 2007 UNAUDITED RESULTS FOR THE 6 MONTHS TO 30 SEPTEMBER 2007 SALIENT FEATURES References are to historical information Net turnover $5,2 trillion Operating profit $1,2 trillion Attributable profit Increased to $16 trillion Cash generated and funds available Funds generated from operations were $1 trillion Funds on hand amount to $9,7 trillion References are to inflation adjusted information Net turnover $8,9 trillion Operating profit $1,8 trillion Attributable profit Increased to $2,7 trillion Cash generated and funds available Funds generated from operations were $3 trillion Funds on hand amount to $9,7 trillion OVERVIEW The six months period to 30 September 2007 reflects a first quarter which wasmore controllable from an operating point of view and a second quarter which wasseverely affected by price controls and stock outages as consumers tookadvantage of price adjustments to products and suppliers were unable to replacestock on a timely basis. During the second quarter sales on credit were withdrawn from department storesto more effectively manage working capital. However, this did not materiallyaffect sales performance relative to available stock. Trading conditions for TM Supermarkets were very difficult in the second quarteras the selection of locally manufactured products diminished because of supplierdelivery constraints. Stock that could be sourced turned over quickly. The Hotels division recorded results driven by increased occupancies in allthree units together with the effect of exchange rate movement. The inflation adjusted figures do not really reflect an accurate position inreal terms. Exchange rate movement, interest rates and the inflation figures donot correlate, hence limiting the application of the information. Historicalcost figures are equally distorted, as they do not reflect the real position.These factors mean that interpretation of financial information must be withcaution, although trends and relationships are useful guides in analysingresults. Working capital management, cash flows and cost controls were a key strategicfocus during the period. HIGHLIGHTS OF DIVISIONAL ACTIVITIES (Reference to historical cost figures) CORPORATE • Funds available for investment and other foreign funds amount to US$45 million. • Investment in Mvelaphanda Group was sold for R52 million and funds are available for regional investments. • Net exchange gains amounted to $17, 1 trillion. RETAIL DIVISION • Turnover increased to $3, 7 trillion. • Operating profit was $667 billion. • Gross margins were affected by price controls. Deliberations on pricing models continue. • Realignment of Clicks Head Office resulted in cost savings. • Cash flow effectively managed to balance trading cycles. • Shortages of flour and power outages affected bakery operations. • Lack of meat supply resulted in a significant reduction in turnover and sales mix. All other popular food products were undersupplied. • The new point of sale system in department stores is operational, providing improved stock information. • Two supermarkets have updated point of sale systems. • Projects for three new TM branches are advancing with the development at Victoria Falls expected to be the first operational, early in 2008. HOTEL DIVISION • Group occupancy increased by 29% compared to prior year. • Revenue per available room and turnover increases particularly driven by Cape Grace Hotel and movement in exchange rates. • Food and beverage availability has normalised to a certain degree. • Plans for refashioning Cape Grace and a substantial expansion of the Victoria Falls Hotel are advancing. • Repairs and maintenance programmes at Meikles and Victoria Falls Hotels are being accelerated. OUTLOOK Shareholders have approved the merger with Kingdom Financial Holdings Limited,Tanganda Tea Company Limited and Cotton Printers (Private) Limited. The sanction by the Courts of the Tanganda and Kingdom scheme meetings willprovide the final authority for the merger to go ahead. Meikles Africa looksforward to participating in the new Kingdom Meikles Africa Group ("KMAL"), whichwill provide a very strong asset base for local and regional expansion. Stock pricing models continue to be reviewed with the authorities. Funding of stock replacement is a major factor in putting merchandise back onthe shelves. BACOSSI funds have been allocated to the TM Supermarkets and thesewill assist in this process, so long as stock can be sourced. JOHN MOXONCHAIRMAN DIVIDEND In view of the "KMAL" merger and the change in the financial year-end of MeiklesAfrica, which is still the subject of regulatory approval, the directors havedecided not to propose a dividend until merger matters are finalised. A.P LANE-MITCHELLCOMPANY SECRETARY 14 December 2007 UNAUDITED CONSOLIDATED INCOME STATEMENTFor the 6 months to 30 September 2007 INFLATION ADJUSTED HISTORICAL COST (all amounts in millions of dollars) 6 months to 6 months to 6 months to 6 months to 30 September 30 September 30 September 30 September 2007 2006 2007 2006 Revenue 8,852,377 3,817,107 5,212,284 32,002 Operating (loss) / profit before monetaryadjustment and exchange gains (922,989) (273,014) 936,453 4,965Net monetary gain from operating activities 2,451,244 256,123 - -Exchange gains on net current assets 291,079 7,112 277,636 8 Operating profit / (loss) 1,819,334 (9,779) 1,214,089 4,973Investment income 413,845 109,836 300,747 760Finance costs (38,447) (47,604) (17,006) (384)Net exchange gains / (losses) 6,409,345 (306,878) 17,104,532 6,820(Decrease) / increase in value of quoted (1,637,327) (77,912) (29,799) 600investment Net monetary loss from financing activities (3,036,115) (37,986) - -Share of profits / (losses) of associate 119,761 (1,616) 144,281 289 Profit / (loss) before taxation 4,050,396 (371,939) 18,716,844 13,058 Income tax expense (1,004,248) (48,735) (2,609,024) (2,447) Profit / (loss) for the year 3,046,148 (420,674) 16,107,820 10,611 Attributable to:Equity holders of the parent 2,688,521 (442,092) 16,017,785 9,866Minority interest 357,627 21,418 90,035 745 3,046,148 (420,674) 16,107,820 10,611 Basic earnings per share ($) 16,414 385.06 97,795 60.28 IIMR Headline earnings per share ($) 16,448 387.77 98,378 60.10 Weighted average number of shares 163,789,944 163,656,787 163,789,944 163,656,787 UNAUDITED CONSOLIDATED BALANCE SHEETAt 30 September 2007 INFLATION ADJUSTED HISTORICAL COST (all amounts in millions of dollars) At Audited at At Audited at 30 September 31 March 30 September 31 March 2007 2007 2007 2007 ASSETSProperty, plant & equipment 8,353,308 5,383,367 7,264,353 372,055 Investment in associates 578,647 458,886 152,790 8,509Other financial assets 11,564,486 5,734,097 11,559,439 483,350Goodwill 295,308 295,308 2 2Current assets 11,802,502 12,806,984 11,694,415 1,057,441 Total assets 32,594,251 24,678,642 30,670,999 1,921,357 EQUITY AND LIABILITIESAttributable to equity holders of the parent 22,592,541 16,477,457 21,431,285 1,266,415Minority interest 543,810 186,181 98,972 8,938Deferred tax 1,998,830 1,627,104 1,681,672 107,060Other non-current liabilities 2,072,985 1,953,040 2,072,985 164,777Current liabilities 5,386,085 4,434,860 5,386,085 374,167 Total equity and liabilities 32,594,251 24,678,642 30,670,999 1,921,357 UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFor the 6 months to 30 September 2007 INFLATION ADJUSTED HISTORICAL COST (all amounts in millions of dollars) 6 months to 6 months to 6 months to 6 months to 30 September 30 September 30 September 30 September 2007 2006 2007 2006 Profit / (loss) for the period 2,688,521 (442,092) 16,017,785 9,866Cape Grace Hotel - translation of foreign entity 3,488,606 90,924 4,148,376 1,256Scrip dividend 39,321 - 25,365 -Dividend - prior year final (101,364) (57,545) (26,656) (327) Attributable to equity holders of parent 6,115,084 (408,713) 20,164,870 10,795Minorities 357,629 4,203 90,034 647 Shareholders' equity at the beginning of the year 16,663,638 3,029,100 1,275,353 6,961Shareholders' equity at the end of the 6 months period 23,136,351 2,624,590 21,530,257 18,403 UNAUDITED CONSOLIDATED CASH FLOW STATEMENTFor the 6 months to 30 September 2007 INFLATION ADJUSTED HISTORICAL COST (all amounts in millions of dollars) 6 months to 6 months to 6 months to 6 months to 30 September 30 September 30 September 30 September 2007 2006 2007 2006 Cash flows from operating activitiesProfit / (loss) before taxation 4,050,396 (371,939) 18,716,844 13,058Adjustments for: Non-operating cash flow (7,228,394) 244,646 (17,700,237) (7,239) Non-cash items 5,580,092 428,353 (19,830) (776)Operating cash flow before working capital changes 2,402,094 301,060 996,777 5,043Working capital changes 590,289 30,955 30,093 (1,490)Cash generated from operations 2,992,383 332,015 1,026,870 3,553Income taxes paid (226,693) (105,714) (39,088) (243)Net cash generated from operating activities 2,765,690 226,301 987,782 3,310 Net cash generated from / (used in) investing activities 247,062 (60,131) 105,494 (594) Net cash used in financing activities (424,299) (182,656) (46,181) (335) Net increase / (decrease) in cash and cash equivalents 2,588,453 (16,486) 1,047,095 2,381 Cash and cash equivalents at the beginning of the year 9,712,176 1,175,707 819,412 4,313 Net effect of exchange rate changes on cash and cash equivalents 228,873 (299,766) 7,597,169 6,828 Translation of foreign entity (2,857,412) 103,936 208,414 (1,602) Cash and cash equivalents at the end of the 6 months period 9,672,090 963,391 9,672,090 11,920 UNAUDITED SEGMENT INFORMATION INFLATION ADJUSTED HISTORICAL COST (all amounts in millions of 6 months to 6 months to 6 months to 6 months todollars) 30 September 2007 30 September 2006 30 September 2007 30 September 2006RevenueRetail 6,845,353 208,115 3,716,519 30,289 Hotels 2,007,024 3,608,992 1,495,765 1,713 8,852,377 3,817,107 5,212,284 32,002 Operating profit / (loss) aftermonetary adjustment and exchange gainsRetail 1,538,602 14,952 671,131 4,625Hotels 492,370 (20,448) 546,135 425Corporate (211,638) (4,283) (3,177) (77) 1,819,334 (9,779) 1,214,089 4,973 Segment assetsRetail 2,288,496 1,673,162 1,506,163 16,142Hotels 10,307,014 1,273,501 9,829,568 6,222Corporate 19,998,741 1,229,534 19,335,268 12,071 32,594,251 4,176,197 30,670,999 34,435 SUPPLEMENTARY INFORMATION INFLATION ADJUSTED HISTORICAL COST (all amounts in millions of dollars) 6 months 6 months to 6 months to 6 months to to 30 September 30 September 30 September 30 September 2007 2006 2007 2006 Capital expenditure 299,415 68,779 211,711 575Capital commitments authorised but not yet contracted for 1,094,631 168,270 1,094,631 2,082Depreciation 162,394 64,091 95,529 113Market value of investments - Associate - Kingdom Financial Holdings Limited 8,684,176 765,701 8,684,176 9,474 - Investment - Mvelaphanda Group - 101,754 - 1,259Interest bearing borrowings 1,306,199 249,980 1,306,199 3,093 Accounting policies Accounting policies are consistent with those used in the previous year. Note to inflation adjusted financial statements The consumer price indices used to restate the financial statements at 30September 2007 are as follows: 30 September 2006 2,378,624.931 March 2007 16,221,182.230 September 2007 192,243,450.0 For further information contact: Zimbabwe Bryan Thorn +263-4-252068/78 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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