Meikles Limited records 101% revenue growth in 202...

Meikles Limited records 101% revenue growth in 2023

Audrey Galawu

Meikles Limited has recorded revenue growth of ZWL$869.8 billion representing a like-for-like increase of 101% for the year ended August 31, 2023.

The growth was primarily due to price adjustments at the supermarkets section, which contributed 98% of the Group’s revenue.

Gross profit margin was above last year by 5.44 percentage points on a like for like basis. In historical cost terms, gross profit margin increased to 34.78% from 32.40% in the same period last year.

Net operating costs increased by 147% (Historical cost: 872%) on a like for like basis. Overall, most prices in the economy were pegged in US$ and converted to ZWL at the time of payment during the period under review. Resultantly, operating costs increases in ZWL were mainly due to the exchange rate depreciation.

Meikles Group executive chairman, John Moxon said the Group will continue to leverage its strong liquidity position to adapt to the evolving economic environment during the second half of the financial year and beyond.

“The supermarket segment is stocking up for the festive season in anticipation of increased sales. The property segment will accelerate the refurbishment of the properties outside Harare.

“Employee costs, which made up 55% of operating costs increased by 169% (Historical cost: 931%) on a like-for-like basis. In the current period, salaries and wages were fixed in US$ at collective bargaining forums with an option to pay in ZWL at the interbank exchange rate ruling at the time of payment.

“Profit before tax for the period increased by 17% to ZWL$30.8 billion translating to a profit margin of 3.54%. In historical cost terms, PBT grew by 220% to ZWL$36.3 billion on a like-for-like basis (a profit margin of 5.79%).

“The Group’s effective tax rate in historical cost terms was 34.99% (last year 25.70%) compared to the statutory tax rate of 24.72%. The effective tax rate was negatively impacted by significant disallowed expenses mainly intermediated money transfer tax and cost of canteen meals.

“Profit for the period of ZWL$9.6 billion decreased by 30% (Historical cost growth of 180% to ZWL$23.6 billion). Profit growth was curtailed by ZWL$10.4 billion in exchange losses on the seven leases, most of which will be reversed in the second half of the financial year.

“Accordingly, employee costs increased in ZWL in line with the exchange rate depreciation. Occupancy costs (23% of operating costs) were 201% (Historical cost: 994%) above the same period last year,” reads the report.

Approximately 83% of finance costs were IFRS 16 related interest charges on lease liabilities, which increased by 91% due to inflation driven rent reviews.

The Group maintained a strong financial position during the period under review despite the retreat of the current ratio to 1.44 times from 1.74 times at the end of the preceding financial year.

The Board declared an interim dividend of 0.6 US$ cents per share to be paid on December 14, 2023. The full dividend notice was published on November 14, 2023.