MIK Meikles Limited

 
TIDMMIK 
 
MEIKLES LIMITED 
 
INTERIM MANAGEMENT REPORT 
 
This Interim Management Statement is issued by Meikles Limited in accordance 
with the UK Listing Authority's Disclosure and Transparency Rules. Unless 
stated otherwise, key trends and figures highlighted below refer to the three 
months ended 30 June 2013 and the corresponding period in the previous 
financial year. 
 
Operating environment 
 
Zimbabwe approved a new constitution in March 2013 followed by harmonized 
elections on 31 July 2013. The period leading up to and after these legislative 
processes was largely peaceful and did not disrupt our businesses as was the 
case in previous harmonized elections. However, business across the board 
slowed down, while these processes were underway. The markets became more 
illiquid; turnover on the stock market reduced, bank deposits decreased and it 
was reported by Confederation of Zimbabwe Industries that capacity utilisation 
dropped to 45% from 55% in 2012. The period post the elections is yet to 
unravel as the country awaits the inauguration of the President and the 
formation of a new government and cabinet. 
 
Operations update 
 
Tanganda Tea Company 
 
Tanganda had a good first quarter aided by friendly weather patterns which 
continued from the end of the last financial year. As a result, tea production 
was 33% higher than same period in 2012. The company also implemented 
preventative measures to safeguard the crops from a severe winter and these 
measures yielded the desired results. 
 
The global average bulk tea prices were 15% up when compared with the 
corresponding quarter in 2012. The beverage tea sales in the local market 
slowed down in the first quarter whilst the regional sales in Namibia and 
Zambia increased. New markets for packeted tea in South Africa, Mozambique and 
Botswana are being developed. A new state of the art tea packing plant has been 
ordered to cater for the expanded regional markets and expected increase in 
local packeted tea volumes. 
 
The young plantations of coffee, macadamia and avocadoes planted in previous 
periods are doing well. Land preparation continued in the first quarter and 
further plantings are expected to commence before the end of the second 
quarter. Purified spring water production has vastly improved and volumes for 
the quarter were 59% higher than those of the comparative period. 
 
TM Supermarkets 
 
Trading in TM Supermarkets was within expectations for the quarter ended 30 
June 2013. Turnover grew by 5% compared to the corresponding period in 2012. 
Year on year inflation was at 1.87% as at 30 June 2013. The gross margins are 
similar to those achieved in prior periods. 
 
The branch refurbishment is continuing with work currently underway at the 
Masvingo, Gweru and Harare CBD branches. The Supermarkets division added two 
new trading operations in July 2013 bringing its stores portfolio to 51. Apart 
from the refurbishment of existing branches, at least two new branches will be 
added to the portfolio by the end of the current financial year. 
 
Thomas Meikle Stores 
 
In TM Stores, the trading remains subdued as reported in previous statements. 
In spite of the improvement in our stocking and merchandise, the turnover 
levels are still below sustainable levels due to the challenges in the economic 
environment characterized by low disposable incomes and absence of credit 
funding. The company continues to make progress on cost management and achieved 
a 10% reduction in operating costs during the quarter and, more efforts to 
reduce costs and stream line the business are currently in progress. 
 
Meikles Hospitality 
 
The Hospitality operations registered a 3% decrease in turnover compared to 
prior period. The legislative processes mentioned earlier affected occupancy 
levels as the international business travelers and tourists adopted a "wait and 
see" attitude given experiences of past elections. The UNWTO General Assembly 
will be taking place from 24 to 29 August 2013 and the country will take this 
opportunity to showcase its tourist attractions in an environment of peace and 
tranquility. We therefore expect the occupancy levels to improve in future 
periods following this conference which is being co-hosted with Zambia. 
 
The refurbishment of the North Wing at the Meikles Hotel will be completed by 
31 August 2013. The first phase of the refurbishment at the Victoria Falls 
Hotel is also nearing completion. At both hotels, the outcome of these 
refurbishments has surpassed our expectations and created a truly magnificent 
product which we hope our guests will enjoy. 
 
Funds held on deposit with the Reserve Bank of Zimbabwe (RBZ) 
 
Progress has been made in getting better terms on the funds held on deposit 
with the RBZ. The discussions are nearing conclusion and will result in a 
higher interest being accrued on the deposit, with a retrospective implication. 
 
Resources 
 
The shareholder agreements pertaining to mining in partnership with Centar were 
concluded in June 2013 resulting in the formation of a new company, Meikles 
Centar Mining (Private) Limited. The company has since been licensed by the 
Zimbabwe Investment Authority and is awaiting other regulatory approvals 
following which various mining projects will be pursued. 
 
Funding 
 
The Group has secured long term funding for all its projects being the 
refurbishment of the Hotels, the plantation development in Tanganda and the 
refurbishment and outfitting of new stores in TM Supermarkets. This funding is 
in line with the Group's financing policies, previously disclosed to 
shareholders. 
 
Outlook 
 
The Group is working on various initiatives to safeguard and improve its 
performance for the betterment of all stakeholders. We expect the new 
government to play its part by putting in place policies that promote a 
conducive economic environment to attract both local and foreign investors. 
 
END 
 
Issued on 15 August 2013 
 
Notes: 
 
1. The financial information on which this statement is based has not been 
reviewed and reported on by the Group's auditors. 
 
2. Please note that matters highlighted above may contain forward looking 
statements which are subject to various risks and uncertainties and other 
factors, including, but not limited to: 
 
- business conditions. 
 
-political environment 
 
-market related risks. 
 
* A number of these factors are beyond the Group's control. 
 
* These factors may cause the group's actual future results, performance or 
achievements to differ from those expressed or implied. 
 
* Any forward looking statements made are based on the knowledge of the Group 
as at 15 August 2013. 
 
 
 
END 
 

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