LISTED diversified group Meikles Ltd (Meikles) is pinning its hopes on concluding the recovery of the remaining half of a US$90 million that was held on deposit at the Reserve Bank of Zimbabwe (RBZ) to reduce the group’s borrowing levels and interest charges.
In an update for the three months ended 30 June 2014, Miekles said the group has so far received US$49,6 million in treasury bills from the central bank.
“The company is awaiting receipt of the balance of the treasury bills and discussions with relevant authorities on yield and tenure of the bills already in our possession are progressing well,” said the group.
On receipt of the funds, which accrued from transactions relating to Meikles’ dual listing on the London Stock Exchange and Zimbabwe Stock Exchange, Meikles said it would have no net borrowings and get access to funding for operations and expansion.
The group is also in the process of finalising regulatory approval for the purchase of a number of gold mines in the Matabeleland region under its mining unit, Meikles Centar Mining.
“Funding is available from an external investor and we hope the transaction will be completed by the end of September 2014,” it said.
Under the company’s retail division, Meikles said it recorded a 2% growth in turnover for TM Supermarkets in the quarter ended June 30 2014 compared to the same period last year, while margins remained stable though under pressure due to the depressed economic environment.
“We have completed the refurbishment of two branches post the end of 2014 and currently six branches are under refurbishment to be completed before the end of our financial year,” reads part of the statement.
The group’s Meikles Mega Market has opened two new stores bringing its stores portfolio to three and is progressing its expansion plans. “The turnover levels are steadily increasing as a result of the increased trading area. The departmental stores are trading from a reduced store footprint following the consolidation that started in prior periods.”
Meikles said turnover for the first quarter was 31% below that of the comparative period although the operating losses are reducing as result of the rationalisation.
On the hospitality business, Meikles said occupancy levels for its Victoria Falls Hotel were 55% compared to 45% for the comparative period, whilst Revpars increased by 42%.
“The number of tourist arrivals in the resort town of Victoria Falls continues to grow and forward bookings for the next six months are very encouraging. Meikles Hotel’s occupancy levels for the first quarter were 34% compared to 37% for the period to 30 June 2013.”
Meikles said deflationary trend in the economy remains a threat with continuous decline in aggregate demand and more pronounced signs of the prevailing tight liquidity situation in the Financial Markets.
“ We understand a more practical approach is being adopted by the authorities in their implementation of the Indigenisation laws and regulations. This positive approach is required to attract new investors and stimulate economic growth,” said Meikles. Writer.