THE Meikles group expects TM Supermarkets to attain improved returns after the capital injection which saw it open the country’s first Pick n Pay store. In a statement after its annual general meeting last week, the group said it expected better returns after TM Supermarkets, together with Tanganda, steered group turnover in the quarter to June 30 by a 15% gain to US$89 million.
In the quarter, gross margins decreased from 22% to 21%, largely as a result of markdowns of slow moving stocks in the stores division. The group said it was giving greater focus to high margin areas and product procurement. Gross margins in July 2012 surpassed those of the comparative period in 2011.
“We are giving greater focus to high margin areas and product procurement. In this regard, the gross margins in the month of July 2012 surpassed those of the comparative period in 2011,” the group said in its AGM statement.
The group said its first Pick n Pay branch in Kamfinsa had been well-received and had performed above expectations to date. Five more TM Supermarket branches would be refurbished before the end of the financial year, three of which would be branded as Pick n Pay.
“We have seen a significant uplift in turnover in our most recently refurbished branch and that trend is set to continue as we complete the refurbishment of more branches,” the group said. Meikles was looking at other cities like Gweru and Bulawayo and towns such as Marondera. There would be a move into the Jaggers Msasa facility once the leases had been agreed on.
The group’s Meikles Hotel is currently undergoing refurbishment and the North Wing, with 135 rooms, has been closed since February 2012, impacting on revenue growth.
The group said extensive renovations for the Victoria Falls Hotel would commence in November 2012 in preparation for the United Nations World Tourism Organisation assembly that will take place in August 2013.
The group said the outlook for the Zimbabwe hotels was positive given the increased tourist activity in the Victoria Falls area.
“The planned referendum and elections that have generated a lot of interest from outside our borders will likely lead to increased traffic in Harare, benefiting our hotel and the hospitality industry as a whole,” the group added.
Meikles expects to benefit from its investment in Mentor Africa Limited. The group is still to recover its deposit from the Reserve Bank of Zimbabwe.