TIDMMIK 
 
MEIKLES LIMITED 
 
TRADING UPDATE FOR THE FIRST QUARTER ENDED  30 JUNE 2020 
 
TRADING ENVIRONMENT 
 
The Group's first quarter to 30 June 2020 was affected by COVID-19. There were 
occasions when some stores of the Supermarket segment were closed due to 
members of staff having tested positive to the disease. In all such 
occurrences, strict action was taken to render the stores safe for both the 
staff and the public before reopening. Similar incidences affected other 
segments of the Group. 
 
The fixed exchange rate adopted at the end of March 2020, restricted revenue 
growth for the Group's exporting segments. The introduction of the weekly 
Reuters based foreign currency auction system to determine the exchange rate 
prior to the end of June 2020 bodes well for Group revenue growth. 
 
GROUP QUARTER FINANCIAL HIGHLIGHTS 
 
Local sales are largely contributed by TM Supermarkets and Tanganda's sales of 
tea, coffee and water. Sales volume at TM Supermarkets declined by 34% relative 
to same period of the previous year. Packed tea and coffee sales volume at 
Tanganda increased by 3% compared to same quarter of the previous year. In 
volume terms, bulk tea export sales grew by 8% whilst average price per kg in 
US$ terms retreated by 12%. Group revenue, in historical cost terms increased 
by 663% compared with the previous year but declined by 12% in inflation 
adjusted terms. 
 
All Group entities except for The Victoria Falls Hotel, which is on care and 
maintenance due to COVID-19, have contributed to a growth in profit. Group 
profit after tax for the quarter ended 30 June, in historical cost terms 
exceeded profit after tax for the twelve months of the previous financial year 
and is well ahead of the inflation for the period. 
 
The Group balance sheet reflects a position that is financially more secure 
than at any point since dollarization in 2009 following the successful 
restructuring of the Group's finances during the previous financial year. The 
Group is in a good position to fund challenges arising from COVID-19 
implications. Expansion projects are in progress in all Group entities apart 
from The Victoria Falls Hotel renovation, which is delayed due to the present 
negative implication affecting tourism. 
 
OUTLOOK 
 
Group entities that are dependant on local turnover may continue to be affected 
by reducing volumes but will continue to make satisfactory profits. Growth in 
volume of export crops is expected in the forthcoming season. Our dams are full 
and power, which is essential for irrigation and estate factories will be 
available not only from traditional sources, but also from the solar projects. 
 
The Group is a responsible employer and continually increases employee 
remuneration but does control other expenditure as far as practicable to 
maintain profit margin. 
 
BY ORDER OF THE BOARD 
 
T MPOFU 
 
COMPANY SECRETARY 
 
2 September 2020 
 
 
 
END

(END) Dow Jones Newswires

September 03, 2020 05:42 ET (09:42 GMT)

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