Results for the 6 months ended 30 Sept 2018

Meikles Ld - Results for the 6 months ended 30 Sept 2018

PR Newswire

London, November 19

MEIKLES LIMITED

ABRIDGED UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2018

CHAIRMAN’S STATEMENT

Group Financial Review

Group revenue for the half year ended 30 September 2018 grew by 30% to US$330.8 million from US$254.0 million in the comparable period. The contribution to revenue by the different segments of the Group is set out in Note 4.

Earnings before interest, tax, depreciation and amortisation “EBITDA” for the period rose by 107% to US$31.5 million from the previous year’s result of US$15.2 million. The contribution to EBITDA by the different segments of the Group is set out in Note 4.

Profit after tax grew by 464% to US$15.3 million from US$2.7 million achieved the previous year. Profit after tax for the six month period ended 30 September 2018 had surpassed the result for the full financial year ended 31 March 2018 of US$7.7 million by 99%.

Progress is being made in raising long term finance. On completion, short term loans and overdue current liabilities will be paid off.

Segment Commentary

TM Supermarkets trading as TM and PnP

Revenue for the period amounted to US$305.6 million, a growth of 32% from US$232.0 million in the previous year. The rise in revenue was underpinned by a considerable growth in the number of units sold.

EBITDA for the period grew by 65% to US$21.8 million. Profit after tax grew by 106% to US$13.9 million from US$6.7 million in the previous year.

Refurbishment works are in progress at five branches with completion expected before the commencement of the festive season.

Tanganda

Revenue grew by 21% to US$15.7 million from US$12.9 million achieved during the six months ended 30 September 2017. Average international bulk tea export price for the period was US$1.68/kg compared to US$1.65/kg in the six months period to 30 September 2017. Bulk tea production of 3 886 tonnes grew by 26% from 3 077 tonnes produced in the comparative prior year period.

The volume of Macadamia nuts sales grew by 70% to 374 tonnes. Average price of US$4.82/kg was 16% above US$4.14/kg realised in the previous period. Avocadoes’ results will be reflected in the second half of the year.

EBITDA for six months ended 30 September 2018 grew by 181% to US$8.4 million from US$3.0 million generated during the comparable period. Profit after tax grew to US$5.6 million from US$0.6 million in the previous year.

Hospitality

Revenue grew by 19% to US$10.3 million from US$8.7 million achieved during same period last year. At Meikles Hotel revenue per available room “RevPAR” rose by 35% underpinned by growth of both room occupancy and average room rate. The Victoria Falls Hotel RevPAR grew to US$198 from US$188 achieved the previous year.

EBITDA grew by 60% to US$3.4 million from US$2.1 million in the previous year. Profit after tax from continuing operations for the six month’s period was US$1.4 million, a growth of 175% above the previous year.

Refurbishment works at The Victoria Falls Hotel will commence during the last quarter of our financial year.

Meikles Stores

Meikles Mega Market operations closed during the period under review due to working capital constraints. EBITDA for the period was a loss of US$1.2 million compared with a loss of US$1.8 million in the previous year. Funding arrangements for working capital requirements are being secured and new store models are being developed.

Amount owed by Government

The Company reaffirms the position as set out in the 2018 Annual Report. There are expectations that final written agreements on this matter will be concluded very shortly.

Outlook

The trend of greatly increased profit earned in the first six months of the current financial year has continued into the first period of the second six months.

Dividend

In view of the profit for the six month’s period ended 30 September 2018 and the ongoing restructuring of short term loans, the board declared an interim dividend of US$0.012 per share payable either as scrip or cash. The total dividend will amount to approximately US$3.1 million. A full dividend announcement will be published separately in due course.

Appreciation

I would like to extend my appreciation to our customers, suppliers, shareholders and regulatory authorities for their continued support. I would also like to extend my appreciation to my fellow Directors, and to management and staff for their dedication and commitment.

JRT Moxon

Executive Chairman

13 November 2018

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2018

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2018

NOTES TO THE ABRIDGED UNAUDITED FINANCIAL RESULTS

1. Basis of preparation

The abridged unaudited financial results are prepared from statutory records that are maintained under the historical cost basis except for biological assets and certain financial instruments which are measured at fair value. Historical cost is generally based on the fair value of the consideration given in exchange for assets. These abridged financial results are presented in United States of America dollars (US$), which is the Group’s functional currency. In the current environment the determination of functional currency is a significant judgement area. These abridged unaudited financial results do not fully comply with IFRS and should be read in conjunction with the Group’s annual report for the full year to 31 March 2018.

2. Accounting policies

Accounting policies and methods of computation applied in the preparation of these abridged unaudited financial results are consistent, in all material respects, with those used in the prior year. The effects of IFRS 9 and IFRS 15, effective in the current year shall be included in the full year results to 31 March 2019

3. Going concern

The Directors assess the ability of the Group to continue in operational existence in the foreseeable future at each reporting date. As at 30 September 2018, the Directors have assessed the Group’s ability to continue operating as a going concern and believe that the preparation of these unaudited financial results on a going concern basis is still appropriate.

4. Segment information

NOTES TO THE ABRIDGED UNAUDITED FINANCIAL RESULTS

The weighted average cost of borrowings for the period was 13.86% per annum (31 March 2018: 13.39% per annum).

The Group has issued cross company guarantees worth US$53.1 million (31 March 2018: US$42.1 million) for Group borrowing facilities.

6.2 Breach of loan covenants

During the current period, the Group was in default on some of its loan covenants with financial institutions. Details of loans in default as at 30 September 2018 are as follows:

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