Meikles Africa Ld - Final Results
May 21 1998 - 3:31AM
UK Regulatory
RNS No 7998v
MEIKLES AFRICA LIMITED
21st May 1998
Preliminary Results for the Year Ended 31 March 1998
Meikles Africa Limited ("Meikles Africa"), the Zimbabwe based
hotel and retail group, which is listed on the Zimbabwe and London
Stock Exchanges, announces preliminary results for the year ended
31 March 1998
* Turnover of Z$2,826m up 35%
* Operating profit of Z$250m up 41%
* Profit before tax and exceptional items of Z$481m up 25%
* Headline earnings per share of 209 cents up 60%
John Moxon, Executive Chairman, commented:
"These are very strong results given the turmoil we faced during
the year. Operationally, the current year is going well and we
are well positioned to benefit from any upturn in the economy.
Overall, the Board is confident of producing a satisfactory
performance during the year".
Enquiries:
Meikles Africa Limited Tel: 00 263 4 883315
John Moxon, Executive Chairman
College Hill Tel: 0171 457 2020
Mark Garraway
Nicholas Williams
CHAIRMAN'S STATEMENT
It is pleasing to report that in the Company's first full year of
operations since listing, all three operating divisions of the
group recorded real growth. Turnover was 35% up on the previous
year, with operating profit showing a 41% gain. Net profit
attributable to shareholders has increased from Z$179m to Z$407.6m
and headline earnings record an increase of 11.4% to Z$410.9m.
The Board has recommended a final dividend of 35 cents per share,
bringing the dividend for the year to 65 cents, based on a cover
of 2.0 times earnings, excluding exchange gains.
Expansion plans were exceeded in the TM Supermarkets, with eight
new branches coming on stream during the year. Our working
relationship with Pick 'n Pay has continued to strengthen, and an
exciting range of house-brand merchandise was offered to the
public over the Christmas season. Further opportunities for growth
are constantly under review and it is likely that operating
branches will exceed 50 in number by the end of the current year,
with a further increase of 6 branches planned.
Meikles Hotel achieved an excellent result and continues to hold
its own in terms of market share. The complete refurbishment of
the South Wing was started in October and those floors which have
been finished have drawn favourable comments from guests. In
March of this year the world class rating of the hotel was further
enhanced with the achievement of the International ISO 9002
quality standard - the first hotel in Africa to achieve this
rating. A decision has now been made to proceed with the
development on land adjoining the Chapman Golf Course. It is
planned that building will commence this year and the hotel is due
to open in 2001. In addition plans are at an advanced stage
regarding an opportunity to operate at the Victoria Falls.
The Department Stores finished the year strongly, although for
some months prior to the festive season retail trade in general
had been slow. The Clicks / Diskom chain consolidated its
position in the market with the opening of 6 new units and a
suitable central office and warehouse facilities in Harare. The
chain has exciting plans to expand the scope of its operations and
improve the market share during the current year. Four new units
have been added to the Food Franchise chain of Black Steer,
Bulldogs Pubs, Flame Diners and Max Frangos Chicken during the
course of the year.
In our last Annual Report reference was made to the funds
earmarked for regional investment. These now amount to US$43.1m
and have given rise to the Z$203.8m exchange gain included in this
year's earnings. At the request of the Reserve Bank of Zimbabwe,
these funds have been deposited with the Reserve Bank at
competitive commercial interest rates, until such time as they are
required for new developments.
At the Annual General Meeting of the Company, shareholders will be
asked to approve a share purchase scheme which will enable
employees to purchase up to Z$100m of the Company's shares. The
purpose of the scheme will be to broaden the ownership of the
Company and further align the interests of employees to those of
the shareholders, resulting in the enhancement of shareholder
value.
I would like to record my appreciation to all employees for the
hard work and loyalty displayed by them in their various fields of
endeavour throughout the year.
The year under review was characterised by a period of political
and economic turmoil culminating in a severe depreciation in the
value of the Zimbabwean dollar. Despite this background, we were
able to produce very strong results. It is to be hoped that
recent moves to restore economic stability will lead in turn to a
restoration in consumer confidence.
Operationally, the current year is going well. The group is
financially strong and has a sound strategy. We are therefore
well positioned to benefit from any upturn in the economy.
Overall, the Board is confident of producing a satisfactory
performance during the year.
Meikles Africa Limited
J.R.T Moxon
Executive Chairman
DIVIDEND ANNOUNCEMENT
On 15 May 1998, the Board approved a final dividend No.57 of 35
cents per share on 152,895,305 shares payable to members
registered in the books of the company at the close of business on
Friday 3 July 1998. The Transfer Books and Register of Members
will be closed from 4 July to 19 July 1998. Dividend cheques will
be mailed to shareholders on or about 20 July 1998. The dividends
payable to non-resident shareholders will be paid in accordance
with Exchange Control Regulations Shareholders' withholding tax
will be deducted where applicable.
The Annual General Meeting of the Company will be held in Harare
on 10 July 1998, details of which will be provided in the Annual
Report
By order of the Board
A. P. Lane-Mitchell
Company Secretary
15 May 1998
The audited results of the Meikles Africa Group Companies in
respect of the year ended 31 March 1998 are as follows:
Consolidated Income Statement
for the year ended 31 March 1998
(Restated)
1998 1997
Z$000 Z$000
Turnover 2,826,344 2,092,797
Gross profit 692,738 526,114
Operating expenses (442,364) (349,169)
Operating profits 250,174 176,945
Exchange gains and net interest 230,882 (40,170)
Income/(expense)
Profit before exceptional item and 481,056 136,775
taxation
Profit on disposal of 25% Interest - 58,321
in TM Supermarkets
Profit before taxation 481,056 195,096
Taxation (30,122) (520)
Profit after taxation 430,934 194,576
Minority Interest (23,318) (14,953)
Net Profit for the year 407,616 179,621
attributable to shareholders
Dividends (99,382) (125,595)
Transferred to retain earnings 308,234 54,026
Earnings per share + basic (cents) 267 157
IIMR Headline earnings per share 269 168
(cents)
Consolidated Balance Sheet
at 31 March 1998
(Restated)
1998 1997
Z$000 Z$000
Assets
Non-current assets 732,837 555,656
Current assets 1,466,266 1,175,298
Total assets 2,199,103 1,730,954
Equity and liabilities
Capital and reserves 1,475,657 1,167,423
Minority Interest 16,072 12,805
Non-current liabilities 139,986 117,160
Current liabilities 567,388 433,566
Total Equity and liabilities 2,199,103 1,730,954
Consolidated cash flow statement
for the year ended 31 March 1998
(Restated)
1998 1997
Z$000 Z$000
Cash flow from operating activities
Profit before tax 481,056 195,096
Adjustments for non-cash items (184,058) 24,113
Operating cash flow before working 296,998 219,209
capital changes
Used in working capital changes (104,324) (40,214)
Operating cash flow 192,674 178,995
Income tax paid (24,511) (1,742)
Net cash generated from operating 168,163 177,253
activities
Net cash used in investing (198,019) (144,874)
activities
Net cash (used in)/ generated from (139,678) 579,722
financing activities
Net effect of exchange rate changes
on cash and cash equivalents 209,841 31,151
Net increase in cash and cash 34,307 643,252
equivalent
Acquired with subsidary - 50,094
Cash and cash equivalents at 31 786,950 93,604
March 1997
Cash and cash equivalents at 31 821,257 786,950
March 1998
Accounting policies
The accounting policies are the same as those used in the 31
March 1997 Financial Statements, except in relation to investments
and land and buildings which have been changed with effect from 1
April 1997. Comparative figures have been restated to reflect
these changes.
In prior periods quoted investments were revalued to market value
at the date of the balance sheet, the surplus being included in
non-distributable reserves. The Group's quoted investments are
now only long-term investments and therefore, in conformity with
International Accounting Standards, they are carried at cost with
the market value shown by way of note. The effect of this change
is a reduction in investments and non-distributable reserves of
Z$65,137,000 at 1 April 1997.
Freehold land and buildings were previously included in the
Financial Statement at valuation and buildings were not
depreciated. The Group has now adopted the International
Accounting Standard and included them at historic cost, with the
market value shown by way of note. The effect of this change is a
reduction in freehold land and buildings and non-distributable
reserves of Z$328,945,000 at 1 April 1997. Freehold buildings are
now depreciated on a straight line basis over their estimated
useful life of 60 years. The effect of the change is an increase
in the depreciation charge of Z$4,554,384 (1998) and Z$4,029,922
(1997). Retained earnings have been reduced by Z$19,274,471,
which is the amount of the charge relating to periods prior to 1
April 1998
END
FR AMMPBLLJTBIP
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