RNS Number:8815J
Meikles Africa Ld
14 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 was
more controllable from an operating point of view and a second quarter which was
severely affected by price controls and stock outages as consumers took
advantage of price adjustments to products and suppliers were unable to replace
stock on a timely basis.
During the second quarter sales on credit were withdrawn from department stores
to more effectively manage working capital. However, this did not materially
affect sales performance relative to available stock.
Trading conditions for TM Supermarkets were very difficult in the second quarter
as the selection of locally manufactured products diminished because of supplier
delivery constraints. Stock that could be sourced turned over quickly.
The Hotels division recorded results driven by increased occupancies in all
three units together with the effect of exchange rate movement.
The inflation adjusted figures do not really reflect an accurate position in
real terms. Exchange rate movement, interest rates and the inflation figures do
not correlate, hence limiting the application of the information. Historical
cost figures are equally distorted, as they do not reflect the real position.
These factors mean that interpretation of financial information must be with
caution, although trends and relationships are useful guides in analysing
results.
Working capital management, cash flows and cost controls were a key strategic
focus 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 will
provide the final authority for the merger to go ahead. Meikles Africa looks
forward to participating in the new Kingdom Meikles Africa Group ("KMAL"), which
will 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 on
the shelves. BACOSSI funds have been allocated to the TM Supermarkets and these
will assist in this process, so long as stock can be sourced.
JOHN MOXON
CHAIRMAN
DIVIDEND
In view of the "KMAL" merger and the change in the financial year-end of Meikles
Africa, which is still the subject of regulatory approval, the directors have
decided not to propose a dividend until merger matters are finalised.
A.P LANE-MITCHELL
COMPANY SECRETARY
14 December 2007
UNAUDITED CONSOLIDATED INCOME STATEMENT
For 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 monetary
adjustment and exchange gains (922,989) (273,014) 936,453 4,965
Net 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 4,973
Investment income 413,845 109,836 300,747 760
Finance 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) 600
investment
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 9,866
Minority 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 SHEET
At 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
ASSETS
Property, plant & equipment 8,353,308 5,383,367 7,264,353 372,055
Investment in associates 578,647 458,886 152,790 8,509
Other financial assets 11,564,486 5,734,097 11,559,439 483,350
Goodwill 295,308 295,308 2 2
Current 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 LIABILITIES
Attributable to equity holders of the parent 22,592,541 16,477,457 21,431,285 1,266,415
Minority interest 543,810 186,181 98,972 8,938
Deferred tax 1,998,830 1,627,104 1,681,672 107,060
Other non-current liabilities 2,072,985 1,953,040 2,072,985 164,777
Current 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 EQUITY
For 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 9,866
Cape Grace Hotel - translation of
foreign entity 3,488,606 90,924 4,148,376 1,256
Scrip 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 10,795
Minorities 357,629 4,203 90,034 647
Shareholders' equity at the beginning of
the year 16,663,638 3,029,100 1,275,353 6,961
Shareholders' equity at the end of the 6
months period 23,136,351 2,624,590 21,530,257 18,403
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
For 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 activities
Profit / (loss) before taxation 4,050,396 (371,939) 18,716,844 13,058
Adjustments 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 5,043
Working capital changes 590,289 30,955 30,093 (1,490)
Cash generated from operations 2,992,383 332,015 1,026,870 3,553
Income 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 to
dollars) 30 September 2007 30 September 2006 30 September 2007 30 September
2006
Revenue
Retail 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) after
monetary adjustment and exchange gains
Retail 1,538,602 14,952 671,131 4,625
Hotels 492,370 (20,448) 546,135 425
Corporate (211,638) (4,283) (3,177) (77)
1,819,334 (9,779) 1,214,089 4,973
Segment assets
Retail 2,288,496 1,673,162 1,506,163 16,142
Hotels 10,307,014 1,273,501 9,829,568 6,222
Corporate 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 68,779 211,711 575
Capital commitments authorised but not yet
contracted for 1,094,631 168,270 1,094,631 2,082
Depreciation 162,394 64,091 95,529 113
Market value of investments
- Associate - Kingdom Financial
Holdings Limited 8,684,176 765,701 8,684,176 9,474
- Investment - Mvelaphanda Group - 101,754 - 1,259
Interest 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 30
September 2007 are as follows:
30 September 2006 2,378,624.9
31 March 2007 16,221,182.2
30 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 Exchange
END
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