Meikles Limited says Zimbabwe’s operating environment remains challenging despite improved revenues across some divisions, with cost pressures, inflation distortions, and currency adjustments continuing to weigh heavily on performance in the half-year ended August 31, 2025.
According to the group’s unaudited interim financials, EBITDA rose sharply to ZWG$83.2 million, up from ZWG$33 million in the previous year on an inflation-adjusted basis. However, management warned that the upturn masks persistent structural challenges that continue to erode profitability across core segments.
TM Supermarkets: Solid Volumes but Squeezed Profits
The retail arm, TM Supermarkets, trading as TM Pick n Pay, remained resilient in maintaining stock levels and avoiding borrowings, but profitability deteriorated sharply.
- Loss after tax (inflation-adjusted): ZWG$143.0 million, compared to a profit of ZWG$270.0 million in the prior year.
- On a historical-cost basis, the segment posted a loss of ZWG$84.1 million, versus a profit of ZWG$14.8 million the previous year.
The company said rising operating costs and subdued consumer spending continue to affect trading conditions, though recent operational adjustments have “begun yielding encouraging trends.”
Hospitality: Strong Revenue Growth but Costs Remain High
Hospitality operations, now reclassified as continuing operations, recorded strong top-line growth.
Related Stories
- Revenue increased to ZWG$96.6 million, up from ZWG$44.6 million.
- In USD terms, revenue grew 10%, supported by a 9% rise in average room rate and a 1-percentage-point increase in occupancy.
- Profit after tax rose to ZWG$12.5 million, compared to ZWG$6.1 million last year.
However, the group said profit growth in USD terms, up 2%, was tempered by operating expenses that continue to outpace revenue gains.
Properties: Revenue Up but Profit Declines
The properties segment delivered mixed results.
- Revenue increased to ZWG$21.0 million, up from ZWG$14.8 million.
- Profit after tax fell to ZWG$3.3 million, down from ZWG$6.5 million, largely due to higher finance costs and a decline in profit from the disposal of property.
Outlook: Festive Trading Positive but Risks Persist
Meikles said supermarkets are preparing for the festive season, traditionally a peak trading period, and early results from September–October 2025 indicate improved momentum.
However, the group cautioned that the broader environment remains “challenging,” citing:
- Rising cost of doing business
- Inflation distortions affecting comparability
- Transition frictions linked to currency changes
- Pressure on consumer purchasing power
Given these conditions, the Board opted not to declare an interim dividend in order to preserve cash and maintain a strong liquidity position.
Chairman Fayaz King said the group remains cautiously optimistic but emphasised that sustainable recovery hinges on a more stable operating environment and continued operational discipline.
Leave Comments