TIDMMIK
MEIKLES LIMITED
ABRIDGED UNAUDITED RESULTS FOR THE SIX MONTHSED 30 SEPTEMBER 2018
CHAIRMAN'S STATEMENT
Group Financial Review
Group revenue for the half year ended 30 September 2018 grew by 30% to US$330.8
million from US$254.0 million in the comparable period. The contribution to
revenue by the different segments of the Group is set out in Note 4.
Earnings before interest, tax, depreciation and amortisation "EBITDA" for the
period rose by 107% to US$31.5 million from the previous year's result of
US$15.2 million. The contribution to EBITDA by the different segments of the
Group is set out in Note 4.
Profit after tax grew by 464% to US$15.3 million from US$2.7 million achieved
the previous year. Profit after tax for the six month period ended 30
September 2018 had surpassed the result for the full financial year ended 31
March 2018 of US$7.7 million by 99%.
Progress is being made in raising long term finance. On completion, short term
loans and overdue current liabilities will be paid off.
Segment Commentary
TM Supermarkets trading as TM and PnP
Revenue for the period amounted to US$305.6 million, a growth of 32% from
US$232.0 million in the previous year. The rise in revenue was underpinned by a
considerable growth in the number of units sold.
EBITDA for the period grew by 65% to US$21.8 million. Profit after tax grew by
106% to US$13.9 million from US$6.7 million in the previous year.
Refurbishment works are in progress at five branches with completion expected
before the commencement of the festive season.
Tanganda
Revenue grew by 21% to US$15.7 million from US$12.9 million achieved during the
six months ended 30 September 2017. Average international bulk tea export price
for the period was US$1.68/kg compared to US$1.65/kg in the six months period
to 30 September 2017. Bulk tea production of 3 886 tonnes grew by 26% from 3
077 tonnes produced in the comparative prior year period.
The volume of Macadamia nuts sales grew by 70% to 374 tonnes. Average price of
US$4.82/kg was 16% above US$4.14/kg realised in the previous period.
Avocadoes' results will be reflected in the second half of the year.
EBITDA for six months ended 30 September 2018 grew by 181% to US$8.4 million
from US$3.0 million generated during the comparable period. Profit after tax
grew to US$5.6 million from US$0.6 million in the previous year.
Hospitality
Revenue grew by 19% to US$10.3 million from US$8.7 million achieved during same
period last year. At Meikles Hotel revenue per available room "RevPAR" rose by
35% underpinned by growth of both room occupancy and average room rate. The
Victoria Falls Hotel RevPAR grew to US$198 from US$188 achieved the previous
year.
EBITDA grew by 60% to US$3.4 million from US$2.1 million in the previous year.
Profit after tax from continuing operations for the six month's period was
US$1.4 million, a growth of 175% above the previous year.
Refurbishment works at The Victoria Falls Hotel will commence during the last
quarter of our financial year.
Meikles Stores
Meikles Mega Market operations closed during the period under review due to
working capital constraints. EBITDA for the period was a loss of US$1.2 million
compared with a loss of US$1.8 million in the previous year. Funding
arrangements for working capital requirements are being secured and new store
models are being developed.
Amount owed by Government
The Company reaffirms the position as set out in the 2018 Annual Report. There
are expectations that final written agreements on this matter will be concluded
very shortly.
Outlook
The trend of greatly increased profit earned in the first six months of the
current financial year has continued into the first period of the second six
months.
Dividend
In view of the profit for the six month's period ended 30 September 2018 and
the ongoing restructuring of short term loans, the board declared an interim
dividend of US$0.012 per share payable either as scrip or cash. The total
dividend will amount to approximately US$3.1 million. A full dividend
announcement will be published separately in due course.
Appreciation
I would like to extend my appreciation to our customers, suppliers,
shareholders and regulatory authorities for their continued support. I would
also like to extend my appreciation to my fellow Directors, and to management
and staff for their dedication and commitment.
JRT Moxon
Executive Chairman
13 November 2018
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 SEPTEMBER 2018
Unaudited Unaudited Audited
30 Sep 30 Sep 31 March
2018 2017 2018
US$ 000 US$ 000 US$ 000
CONTINUING OPERATIONS
Revenue 330,830 253,989 534,930
Net operating costs (305,881) (245,151) (508,197)
Operating profit 24,949 8,838 26,733
Investment income 20 34 271
Finance costs (4,412) (3,440) (8,640)
Net exchange gains / (losses) 1,163 (37) (468)
Loss recognised on discounting Treasury Bills - (6) (6)
Fair value adjustments on biological assets 78 - 1,336
Profit before tax 21,798 5,389 19,226
Income tax expense (6,466) (2,672) (11,533)
Profit for the period from continuing operations 15,332 2,717 7,693
DISCONTINUED OPERATION
Profit for the period from discontinued operation - 554 501
Profit for the period 15,332 3,271 8,194
Other comprehensive income, net of tax
Items that may be reclassified subsequently to
profit or loss:
Reclassification adjustment relating to
available-for-sale financial assets disposed of in - 47 47
the current period
Other comprehensive income for the period, net of - 47 47
tax
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 15,332 3,318 8,241
Profit for the period attributable to:
Owners of the parent 8,520 (41) (829)
Non-controlling interests 6,812 3,312 9,023
15,332 3,271 8,194
Total comprehensive income is attributable to:
Owners of the parent 8,520 6 (782)
Non-controlling interests 6,812 3,312 9,023
15,332 3,318 8,241
Earnings / (loss) per share (cents)
Basic 3.33 (0.02) (0.32)
Diluted 3.12 (0.01) (0.31)
Headline earnings / loss per share (cents) 3.46 (0.29) 0.08
Diluted headline earnings / loss per share (cents) 3.24 (0.27) 0.08
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2018
Unaudited Unaudited Audited
30 Sep 30 Sep 31 March
2018 2017 2018
US$ 000 US$ 000 US$ 000
ASSETS
Non-current assets
Property, plant and equipment 183,094 173,253 175,267
Investment property 237 241 239
Investment in Mentor Africa Limited 20,046 20,046 20,046
Biological assets 1,407 1,262 1,299
Intangible assets 124 124 124
Other financial assets 11,803 11,823 11,815
Deferred tax 264 3,859 121
Total non-current assets 216,975 210,608 208,911
Current assets
Inventories 47,324 30,710 43,870
Trade and other receivables 15,679 16,639 17,341
Biological assets - produce on bearer plants 2,482 1,195 2,810
Other financial assets 3,346 3,419 3,383
Cash and bank balances 54,845 27,552 34,175
Total current assets 123,676 79,515 101,579
Total assets 340,651 290,123 310,490
EQUITY AND LIABILITIES
Capital and reserves
Share capital 2,562 2,538 2,562
Share premium 1,469 1,316 1,469
Other reserves 12,559 12,559 12,559
Retained earnings 91,374 83,642 82,854
Equity attributable to equity holders of the 107,963 100,055 99,444
parent
Non-controlling interests 42,786 30,188 36,241
Total equity 150,750 130,243 135,685
Non-current liabilities
Borrowings 13,455 15,446 17,309
Deferred tax 21,311 18,551 19,189
Total non-current liabilities 34,766 33,997 36,498
Current liabilities
Trade and other payables 98,318 75,067 82,334
Borrowings 56,817 50,816 55,973
Total current liabilities 155,135 125,883 138,307
Total liabilities 189,901 159,880 174,805
Total equity and liabilities 340,651 290,123 310,490
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 SEPTEMBER 2018
Share Share Attributable Non-controlling Total
capital premium Other Retained to owners of interests
reserves earnings parent
US$ US$ US$ 000 US$ 000 US$ 000 US$ 000 US$
000 000 000
2018 - Unaudited
Balance at 1 April 2018 2,562 1,469 12,559 82,854 99,444 36,241 135,685
(Loss) / profit for the - - - 8,520 8,520 6,812 15,332
period
Other comprehensive income - - - - - - -
for the period
Non-controlling interests - - (267) (267)
arising from Mopani Property - - -
Development (Private) Limited
Balance at 30 September 2018 2,562 1,469 12,559 91,374 107,964 42,786 150,750
2017 - Unaudited
Balance at 1 April 2017 2,538 1,316 12,512 83,683 100,049 28,591 128,640
(Loss) / profit for the - - - (41) (41) 3,312 3,271
period
Other comprehensive income - - 47 - 47 - 47
for the period
Non-controlling interests - - (1,715) (1,715)
arising from Mopani Property - - -
Development (Private) Limited
Balance at 30 September 2017 2,538 1,316 12,559 83,642 100,055 30,188 130,243
CONSOLIDATED STATEMENT OF CASHFLOWS
FOR THE SIX MONTHSED 30 SEPTEMBER 2018
Unaudited Unaudited Audited
30 Sep 30 Sep 31 March
2018 2017 2018
CONTINUING AND DISCONTINUED OPERATIONS US$ 000 US$ 000 US$ 000
Cash flows from operating activities
Profit before tax 21,798 5,943 19,226
Adjustments for:
- Depreciation and impairment of property, plant and 6,571 6,658
equipment and investment property 13,311
- Net interest 4,391 3,399 8,415
- Dividend income - - (53)
- Net exchange (gains) / losses (1,163) 37 468
- Profit on disposal of subsidiary - (768) (768)
- Fair value adjustments on biological assets (78) - (1,336)
- Loss recognised on discounting Treasury Bills - 6 6
- Loss on disposal of property, plant and equipment 83 176 1,545
Operating cash flow before working capital changes 31,602 15,451 41,368
(Increase)/decrease in inventories (3,454) 3,757 (9,403)
Decrease / (increase) in trade and other receivables 1,647 (2,963) (3,627)
Increase in trade and other payables 15,347 4,289 11,895
Cash generated from operations 45,142 20,534 40,233
Income taxes paid (3,848) (1,567) (6,447)
Net cash generated from operating activities 41,294 18,967 33,786
Cash flows from investing activities
Payment for property, plant and equipment (14,612) (7,465) (17,717)
Proceeds from disposal of property, plant and 160 117 350
equipment
Proceeds from sale of Treasury Bills and coupon - 3,075 3,075
interest
Net movement in service assets (26) (73) (89)
Net movement in other investments 52 816 847
Net movement in biological assets 298 557 241
Net cash inflow on disposal of subsidiary - 1,060 1,060
Investment income 18 12 208
Net cash used in investing activities (14,110) (1,901) (12,025)
Cash flows from financing activities
Net (decrease) / increase in interest bearing (3,010) 45 7,064
borrowings
Non-controlling interests arising from Mopani (267) -
Property Development (Private) 519
Limited
Finance costs (4,412) (3,444) (8,640)
Dividend paid - minority shareholders - (1,715) (1,715)
Net cash used in financing activities (7,689) (5,114) (2,772)
Net increase in cash and bank balances 19,495 11,952 18,989
Cash and bank balances at the beginning of the 34,175 15,637 15,637
period
Net effect of exchange rate changes on cash and bank 1,175 (37) (451)
balances
Cash and bank balances at the end of the period 54,845 27,552 34,175
NOTES TO THE ABRIDGED UNAUDITED FINANCIAL RESULTS
1. Basis of preparation
The abridged unaudited financial results are prepared from statutory records
that are maintained under the historical cost basis except for biological
assets and certain financial instruments which are measured at fair value.
Historical cost is generally based on the fair value of the consideration given
in exchange for assets. These abridged financial results are presented in
United States of America dollars (US$), which is the Group's functional
currency. In the current environment the determination of functional currency
is a significant judgement area. These abridged unaudited financial results do
not fully comply with IFRS and should be read in conjunction with the Group's
annual report for the full year to 31 March 2018.
2. Accounting policies
Accounting policies and methods of computation applied in the preparation of
these abridged unaudited financial results are consistent, in all material
respects, with those used in the prior year. The effects of IFRS 9 and IFRS 15,
effective in the current year shall be included in the full year results to 31
March 2019
3. Going concern
The Directors assess the ability of the Group to continue in operational
existence in the foreseeable future at each reporting date. As at 30 September
2018, the Directors have assessed the Group's ability to continue operating as
a going concern and believe that the preparation of these unaudited financial
results on a going concern basis is still appropriate.
4. Segment information
Unaudited Unaudited Audited
30 Sep 30 Sep 31 March
2018 2017 2018
US$ 000 US$ 000 US$ 000
Revenue
Supermarkets 305,557 231,973 487,822
Agriculture 15,667 12,927 28,847
Hotels 10,343 8,685 17,646
Departmental stores 415 1,040 1,881
Wholesaling - 89 224
Corporate* (1,152) (725) (1,490)
330,830 253,989 534,930
EBITDA
Supermarkets 21,767 13,229 34,514
Agriculture 8,387 2,980 10,289
Hotels 3,363 2,101 4,063
Departmental stores (1,188) (825) (2,218)
Wholesaling - (948) (1,998)
Corporate* (811) (1,277) (3,570)
31,518 15,260 41,080
Segment assets
Supermarkets 154,656 108,937 126,701
Agriculture 89,283 76,451 85,582
Hotels 46,917 46,467 46,966
Departmental stores 22,598 26,473 23,446
Wholesaling - 4,988 1,071
Corporate* 27,197 26,807 26,724
340,651 290,123 310,490
Segment liabilities
Supermarkets 70,493 50,479 56,148
Agriculture 30,778 29,557 32,779
Hotels 22,020 22,263 23,515
Departmental stores 28,631 18,108 18,999
Wholesaling - 10,237 10,032
Corporate* 37,979 29,236 33,332
189,901 159,880 174,805
*Intercompany transactions and balances have been eliminated from the corporate
amounts. Corporate also includes other subsidiaries that are immaterial to
warrant separate disclosure.
The EBITDA figures are before Group management fees.
NOTES TO THE ABRIDGED UNAUDITED FINANCIAL RESULTS
Unaudited Unaudited Audited
30 Sep 30 Sep 31 March
2018 2017 2018
5. Other information US$ 000 US$ 000 US$ 000
Capital commitments authorised but not contracted for 8,971 3,000 23,583
Group's share of capital commitments of joint operation 3,000 3,000 3,000
6. Net borrowings
Non-current borrowings 13,455 15,446 17,309
Current borrowings 56,817 50,816 55,973
Total borrowings 70,272 66,262 73,282
Cash and cash equivalents (54,845) (27,552) (34,175)
Net borrowings 15,427 38,710 39,107
Comprising:
Secured 64,627 55,453 57,505
Unsecured 5,645 10,809 15,777
70,272 66,262 73,282
The weighted average cost of borrowings for the period was 13.86% per annum (31
March 2018: 13.39% per annum).
* US$1.8 million (31 March 2018: US$1.8 million) worth of borrowings are
secured by inventories.
* US$4.2 million (31 March 2018: US$4.1 million) worth of borrowings are
secured by receivables.
* US$19.3 million (31 March 2018: US$22.2 million) worth of borrowings are
secured by a negative pledge over assets.
* US$6.3 million (31 March 2018: US$27.8 million) worth of borrowings are
secured by mortgage bonds over freehold land and buildings with a carrying
amount of US$43.4 million (31 March 2018: US$45.6 million).
The Group has issued cross company guarantees worth US$53.1 million (31 March
2018: US$42.1 million) for Group borrowing facilities.
6.2 Breach of loan covenants
During the current period, the Group was in default on some of its loan
covenants with financial institutions. Details of loans in default as at 30
September 2018 are as follows:
* S$17.1 million (31 March 2018: US$16.1 million) secured borrowing, carrying
interest at 12% p.a. The loan is currently on overdraft and fundraising
activities to mobillise long term finance to expunge all short term loans
are underway.
* US$2.5 million (31 March 2018: US$2.4 million) secured borrowing, carrying
interest at 11% p.a. The loan expired on 30 September 2018.
* US$2.8 million (31 March 2018: US$3.7 million) unsecured borrowing,
carrying interest at 11% p.a. The loan expired on 31 May 2018.
* US$10.6 million (31 March 2018: US$9.4 million) unsecured borrowing,
carrying interest at 24% p.a. The loan expired on 30 June 2018.
* Loan instalments and interest amounting to US$1.3 million (31 March 2018:
US$1.1 million) were in arrears as at 30 September 2018 for a loan of
US$1.7 million (31 March 2018: US$2.7 million) expiring on 31 January 2019.
* Loan instalments amounting to US$180,000 (31 March 2018: US$373,000) were
in arrears as at 30 September 2018 for a loan of US$4.0 million (31 March
2018: US$4.7 million) expiring on 31 July 2021.
* US$4.9 million (31 March 2018: US$4.6 million) unsecured borrowing,
carrying interest at 18% p.a. The loan expired on 31 October 2017 and is
now subject of litigation.
* US$468,500 (31 March 2018: US$432,678) unsecured borrowing, carrying
interest at 15% p.a. The loan expired on 23 July 2017 and is now subject of
litigation.
Meikles Limited Website : http://www.meiklesltd.com/
END
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