Meikles targets growth

The group said post the half-year to September, 32 hectares of coffee, 40 hectares of macadamia and 34 hectares of avocados were planted, adding that more land preparation was underway.

Operations had been negatively affected in the same period by frost bite and heat wave, while delayed rains in December, which were 20% below the prior year’s levels, affected bulk tea production

Meikles said the unit would post a loss in the year to March as the cost of production continued to increase whilst tea prices remained flat.

However, the outlook is positive for the other units within the group, with TM Supermarkets operations expected to be back on track helped by the US$13 million injection from Pick n Pay. “We expect to see an improvement in margins and turnover,” the group said.

Turnover growth for TM Supermarkets was 30% year-on-year as at December 31, 2011.

The group said the Kamfinsa branch is nearing completion and should open in May 2012.

“New sites are being evaluated to expand the branch reach from the current 50,” the report said.

Hotels are expected to post a profit after occupancy levels at the hotels improved particularly for the Victoria Falls Hotel where the occupancy level was 57% for the period against 46% in the comparable year ago period.

For the Meikles Hotel, the occupancy level was 49% compared to December 2010’s 41%, while the Cape Grace Hotel’s occupancy levels were 66% against 62% in the comparative period.

Revenue per room increased by 43% and 10% for the Victoria Falls Hotel and Meikles Hotel respectively, but registered a 5% decrease at the Cape Grace Hotel.

The group said the refurbishment at the Meikles Hotel is scheduled to start in the first week of March 2012 for a period of seven months.

Although TM stores turnover rose 59% year-on-year in the December period, limited availability of credit funding due to market liquidity problems is affecting sales growth.

Turnover grew 29% in the nine months to December while group borrowings at US$62 million were still high with the group saying that options are being explored to reduce the debt to manageable levels.

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