RNS Number:3774X
Meikles Africa Ld
30 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 an
exchange rate which discloses values that are more aligned to market forces. In
an effort to more fairly present real value to its shareholders, the Group has
applied the Old Mutual implied rate (OMIR) in the translation to local currency
of net foreign assets and operations.
Local operations continued to focus on strategies which ensured operating profit
exceeded 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 best
advantage. 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 vulnerable
groups and contributes to the homes and care centres across Zimbabwe in an
effort to assist in the welfare of our country's senior citizens.
J.R.T. MOXON
CHAIRMAN
FINAL DIVIDEND ANNOUNCEMENT
On the 24th of May 2007, the Board approved a final dividend Number 75 of $163
per share on 163,656,787 shares payable to members registered in the books of
the Company at the close of business on 15 June 2007. Shareholders will be
given the option to elect whether to take their dividend in cash or in shares in
the 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 to
18 June 2007. Dividend warrants will be posted or direct and cheque payments
made to shareholders on or about 11 July 2007. The dividends payable to
non-resident shareholders will be paid in accordance with Exchange Control
Regulations. Shareholders' withholding tax will be deducted where applicable.
By order of the Board
A.P. LANE-MITCHELL
SECRETARY
28 May 2007
All current financial, operational and structural information on Meikles Africa
Limited 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 STATEMENT
For 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 15,266 362
Finance costs (11,666) (7,321) (4,563) (105)
Net exchange gains 850,585 37,643 1,017,810 4,111
Increase in value of quoted investment 133,042 8,586 147,537 631
Net monetary gain from financing activities 110,568 735 - -
Share of profits of associates 10,189 (4,426) 6,784 79
Loss 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 5,652
Minority 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 35
IIMR Headline earnings per share ($) 6,366 388 6,914 34
Weighted average number of shares 163,656,787 163,656,787 163,656,787 163,656,787
AUDITED CONSOLIDATED BALANCE SHEET
At 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 2,273
Investment in associates 38,716 15,488 8,509 143
Other financial assets 483,783 48,709 483,350 2,099
Goodwill 24,915 24,915 2 2
Current 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 6,381
Minority interest 15,708 9,776 8,938 246
Deferred tax 137,278 40,244 107,060 435
Other non-current liabilities 164,777 36,127 164,777 1,571
Current 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 EQUITY
For 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 5,652
Cape Grace Hotel - translation of foreign entity 120,585 (242) 127,752 383
Share 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 5,960
Minorities 5,932 4,296 8,692 237
Shareholders' equity at the beginning of the year 240,386 180,667 6,627 430
Shareholders' equity at the end of the year 1,405,903 240,386 1,275,353 6,627
AUDITED CONSOLIDATED CASH FLOW STATEMENT
For 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 activities
Profit before tax 1,213,546 93,696 1,309,921 7,091
Adjustments 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 1,938
Working capital changes 4,816 (30,561) 3,525 (403)
Cash generated from operations 239,580 33,855 87,363 1,535
Income 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 4,231
Translation 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
Revenue
Hotels 159,242 55,053 73,062 1,184
Retail 796,939 617,856 283,898 11,007
956,181 672,909 356,960 12,191
Operating profit / (loss)
Hotels 59,076 10,329 51,974 391
Retail 47,871 35,737 60,436 1,576
Corporate (16,538) (2,699) 14,677 46
90,409 43,367 127,087 2,013
Segment assets
Hotels 575,330 120,508 544,882 3,052
Retail 298,834 164,702 229,632 4,852
Corporate 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 23,353 256
Capital commitments authorised but not yet contracted for 390,196 64,097 390,196 2,787
Depreciation and impairment 20,177 7,445 4,934 62
Market value of investments
- Associate - Kingdom Financial Holdings Limited 94,736 6,211 94,736 270
- Investment - Mvelaphanda Group 148,179 15,154 148,179 659
Borrowings 76,090 13,901 76,090 605
Finance and operating lease commitments 124,883 23,992 124,883 1,043
Guarantees 67,953 12,821 67,953 557
Accounting policies
The International Accounting Standards Board has released a number of new
accounting standards and made amendments to existing standards. The impact of
these 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 the
time of the original listing. A reinstatement to equalise the Group and the
Company 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 payment
basis, was based on an interpretation that was generally accepted. This
interpretation recognised the contractual payment basis as the most
representative of the time pattern of the company's benefit obtained from the
leased property. The company is obliged to adopt a straight line basis of
accounting for all lease payments required to be made over the entire lease
period. This has therefore been adjusted with immediate effect in terms of IAS
17. Comparative figures have been restated accordingly.
The adjustments to the finance lease arose from a treatment in the initial
recognition of additional costs to the finance lease asset and the finance lease
liability. Comparative figures have also been restated accordingly.
The effect of these prior year adjustments are fully disclosed in the annual
report.
Note to inflation adjusted financial statements
The consumer price indices used to restate the financial statements at 31 March
2007 are as follows:
Index Factor
31 March 2007 16,221,182.2 1.0
31 March 2006 705,209.4 23.0
31 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 Exchange
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