LISTED diversified group Meikles Limited (Meikles) long wait to recover its US$89 million deposit held by the Reserve Bank of Zimbabwe (RBZ) could soon be over amid indications the central bank will this month issue treasury bills to expunge the debt.
Following receipt of the funds, which accrued from transactions relating to Meikles’ dual listing on the London Stock Exchange and Zimbabwe Stock Exchange, the group will have no net borrowings and have access to funding for operations and expansion.
In an unaudited statement of financial results for the year ended March 31 2014, the listed group said audited results will be released at the end of July 2014 upon conclusion of a resolution on the company’s deposit being held by the central bank since 1998.
“Intense negotiations with the ministry of finance and economic planning are in progress with an intention to facilitate access to these funds by end of July 2014,” Meikles chairman John Moxon said in a statement, adding all parties to the discussion are optimistic the time table is realistic.
“The solution will be based on the company being in receipt of treasury bills, the term of which are to be acceptable at face value to the market. A number of treasury bills have already been given to the company and efforts are underway to test their marketability in their present form,” Moxon added.
Recovering the RBZ funds has for long been Meikles priority as it shapes the group going forward, including funding compliance transactions in respect of the country’s Indigenisation Act.
Last year, Meikles said a proposed employee share ownership scheme would only be set up after the company gets the RBZ funds, part of which will be used to purchase shares for workers.
In August 2013, the company said negotiations to recover the funds from the central bank were at an advanced stage, but things took a wrong turn resulting in Meikles, taking legal action in December 2013.
Part of the group’s long term plans include a US$100 million chrome mining and smelting project in line with a diversification and growth model underpinned by mining. The company said the US$100 million project will be under its mining unit Meikles Centar Mining (MCM).
Meikles said MCM has purchased 75% in a company that owns a number of chrome claims on the Great Dyke.
“Proposals have been submitted to the Ministry of Mines related to a significant chrome related project, which will include construction of a smelter to beneficiate both lumpy and alluvial ore,” said Moxon.
Meikles said it also carried out limited exploration on an iron ore claim with positive results.
“Further tests are required to determine the full extent and quality of the ore reserves,” he said.
The group’s Miekles Mega Market, which was opened in December 2013, will be expanded in the current year.
Meikles said an additional store has been added with two more on the way after the first store contributed over US$2 million turnover in the first three months.
The mega store achieved a compound monthly growth in turn over since it was launched.
In the period under review, group revenues slid by 1,8% from prior year to US$384,3 million due to lower turnover in the retail and agricultural units. Operating costs went up by 1,7% from last year.
The group reported a profit after tax of US$37,2 million compared to US$6,5 million last year.
Turnover from the supermarket division, TM Supermarkets, was US$334 million down from US$336 million despite an 8% growth in customer footprint compared to prior year.
Earnings before interest depreciation tax and amortisation for the supermarket division went down to US$11 million from US$11,6 million while margins remained flat.
The store portfolio increased from 49 as at March 2013 to 53 branches.
TM Supermarkets has secured four new sites which increased trading area by 10% with potential to increase trading space by at least 18% after 5 new additional spaces secured for development in the next two years are operational.
Meikles Departmental stores turnover went down to US$12,5 million from US$18,5 million due to a reduction in store footprint and limited access to credit.
Space on the departmental stores was cut from 12 sites in 2013 to 5 with vacant space allocated to areas deemed to have high growth potential.
The group’s hotels division reported a 5% growth in revenues to US$15,6 million. Ebitda went up to US$1,3 million
from US$612 000 attributed to product quality.
Tanganda’s Tea revenues went down by 6% to US$22,6 million while ebitda increased by 36% to US$2,9 million.
A plantation development area embarked on in 2011 is almost completed. The project created an additional 143 hectares (Ha) of coffee, 185ha of avocadoes, 164 ha of macadamia nuts and 108ha of timber plantations.
Bulk tea production went up by 430%to 9 700 tonnes.