RETAIL conglomerate Meikles Limited saw its half-year loss surge by an extraordinary 10 899% to ZiG165,75 million for the six months ended August 31, 2025, even as it took on substantial new borrowings to sustain operations.
The group’s secured and unsecured borrowings rose by nearly 61% to ZiG132,9 million from ZiG82,49 million in the prior year.
The sharp increase in debt came alongside a dramatic deterioration in performance, with losses widening from a comparative ZiG1,5 million in the same period last year.
This was recorded despite growth in inflation-adjusted revenue, which increased to ZiG6 billion from ZiG5,4 billion.
Meikles attributed the heavy loss to exchange-rate volatility, subdued consumer spending and persistently high operating costs weighing on the formal retail sector.
These challenges resulted in a net monetary adjustment of ZiG26,65 million, although this was significantly lower than the ZiG111,79 million recorded in the prior period. Most of the new borrowings relate to a secured facility.
“Included in the secured borrowings is a loan of ZiG107 million. Thomas Meikle Properties (Private) Limited obtained a US$4 million loan from a local bank to finance the refurbishments of some of its commercial properties,” Meikles explained in a statement attached to the half-year report.
“The loan is secured by an on-demand bank guarantee of ZiG107,2 million (US$4 million) from the bankers of Meikles Limited’s foreign subsidiary Cape Grace Investments Limited. The loan attracts interest at 13% per annum payable monthly in arrears.”
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The loan falls due for full repayment on June 30, 2026.
Unsecured borrowings include several troubled facilities. A ZiG25,5 million loan from South Africa-domiciled Barak Fund SPC Limited, originally raised in 2016 to fund imports, is now in default after the required exchange control approval from the Reserve Bank of Zimbabwe was not obtained.
“In retrospect, the group applied for the exchange control authority to repay the loan from Barak without success, and as a result, the loan is in default,” Meikles said.
“The loan is denominated in USD and attracts interest at 10% per annum. Barak is in the process of winding down following financial difficulties.”
Other unsecured loans comprise funding from minority shareholder Afghan African Holdings Limited and from associate Ian Hannam.
These facilities carry interest rates of 5% and 10% per annum respectively and have no fixed repayment terms.
Despite the deepening losses and a complex debt profile, the group maintains that it has sufficient cash to meet its obligations.
“Management continues to closely monitor developments in the operating environment and is actively implementing strategies to mitigate potential adverse effects on profitability and cash flow generation,” Meikles said.
“Although the economic outlook remains uncertain and presents challenges to forward planning, the group maintains sufficient cash reserves to meet its financial obligations as they fall due for a period of at least 12 months.”
However, liquidity has weakened. As at August, the group’s immediate liquidity ratio stood at ZiG1,10 for every ZiG1 of short-term debt, down from ZiG1,28 in February.
Key exchange rate:· August 31, 2025: US$1: ZiG26,75 and August 31, 2024: US$1: ZiG13,85.
