Interim Results
Meikles Africa Ld
18 November 2003
MIEKLES AFRICA LIMITED
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2003
Financial Highlights - Inflation Adjusted Financial Highlights - Historical Cost
• Turnover of $183.4 billion, (2002 - $159.0 • Turnover of $126.5 billion, (2002 - $22.2
billion) billion)
• Operating profit of $6.7 billion (2002 - • Operating profit of $19.3 billion, (2002 - $2.6
$18.3 billion) billion)
• Exchange gains of $82.8 billion, (2002 - • Exchange gains of $59.5 billion, (2002 - $4.4
$31.8 billion) billion)
• Attributable profit of $14.1 billion, (2002 • Attributable profit of $68.0 billion, (2002 -
- $9.9 billion) $5.9 billion)
• Headline loss per share - $77.16 (2002 - • Headline profit per share - $417.16 (2002 -
$74.34 profit per share) $38.02)
• Interim dividend - $25.00 (2002 - $4.50) • Interim dividend - $25.00
OPERATIONS
Group
Despite the challenging and rapidly changing economic environment, the Group has
produced an impressive result for the first six months of the year. Turnover
reflects a rising trend since the first quarter of the year, with year to date
showing an increase in sales of 470% over the same period in the previous year,
and well ahead of average inflation of 379%. The increase in inflation-adjusted
turnover was 15%.
Retail
Gains have been made in market share. Official inflation reached 456% year on
year, but with real interest rates remaining negative, the high consumption/low
savings pattern was perpetuated. Retail demand remained strong and volumes held
steady where stocks were readily available. A change in the sales mix, as a
result of reduced availability of certain basic consumption goods, is reflected
in improved margins. Increases in expenses have been contained as a percentage
of turnover. Strategic acquisition of stock in most product lines will ensure
that the retail operations will meet anticipated demand in the coming months.
Hotels
A large proportion of the Zimbabwe hotels' revenue is received in foreign
currency and because of this, turnover and profits have increased. Meikles and
Victoria Falls hotels experienced reduced occupancies against the same period in
the previous year. Capital expenditure and overhead costs have been well
controlled.
The Cape Grace Hotel has had an average Cape 'low season' largely because of the
strength of the Rand against the US Dollar and exacerbated by the fall in travel
as a result of the Iraq war and the SARS virus scare. These factors have
resulted in occupancies lower than those experienced in the exceptional winter
season of 2002, although room rates have continued their upward trend. The
average revenue per room remains substantially above major competitors and
market share has been maintained.
Finance
The inflation adjusted Income Statement records a net monetary loss of $92.1
billion. This arises primarily from the Group's foreign currency assets, the
value of which in Zimbabwe Dollar terms have diminished because the official
exchange rate remains unchanged and therefore has not matched inflation. The
majority of the foreign funds are deposited with the Reserve Bank of Zimbabwe
and are converted at the official rate of exchange.
INTERIM DIVIDEND ANNOUNCEMENT
On the 13th November 2003, the Board approved an interim dividend Number 68 of
$25.00 per share on 163 056 652 shares payable to members registered in the
books of the company at the close of business on 5th December 2003. The
Transfer Books and Register of Members will be closed from 5th December 2003 to
14th December 2003. Dividend cheques will be mailed to shareholders on or about
15th December 2003. The dividends payable to non-resident shareholders will be
paid in accordance with Exchange Control Regulations. Shareholders' withholding
tax will be deducted where applicable.
By order of the Board
A P LANE-MITCHELL
Company Secretary
13 November 2003
Enquiries:
Meikles Africa Limited Tel: 002634 252 068
Andrew Lane-Mitchell
College Hill Tel: 020 7457 2020
Corinna Dorward
CONSOLIDATED INCOME STATEMENT
For the six months ended 30 September 2003
INFLATION ADJUSTED HISTORICAL COST
Unaudited Unaudited Unaudited Unaudited
(all amounts in millions of dollars) 6 months to 6 months to 6 months to 6 months to
30 Sept 2003 30 Sept 2002 30 Sept 2003 30 Sept 2002
Turnover 183,437 158,973 126,468 22,158
Cost of sales (142,722) (108,543) (82,938) (15,112)
Gross Profit 40,715 50,430 43,530 7,046
Operating expenses (40,781) (36,261) (25,665) (4,627)
Other income 1,939 1,443 1,422 191
Net operating monetary gain 4,833 2,734 - -
Operating profit 6,706 18,346 19,287 2,610
Net interest (5,183) (3,415) (3,846) (495)
Net exchange gain 82,798 31,792 59,541 4,422
Share of result of associate 6,108 1,289 3,260
Net monetary loss (92,130) (27,357) - -
Profit/(loss) before taxation (1,701) 20,655 78,242 6,898
Taxation (9,564) (8,754) (8,082) (688)
Profit/(loss) after taxation (11,265) 11,901 70,160 6,210
Minority interest (2,794) (2,017) (2,176) (292)
Net profit/(loss) attributable to shareholders (14,059) 9,884 67,984 5,918
Basic earnings/(loss) per share ($) (86.37) 62.94 417.66 37.69
IIMR Headline earnings/(loss) per share ($) (77.16) 74.34 417.16 38.02
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
For the six months ended 30 September 2003
Net profit/(loss) for the year attributable to (14,059) 9.884 67,984 5,918
shareholders
Net gains not recognised in the income statement
- Increase in value of quoted investments 14,721 2,546 19,466 999
- Capital gains deferred tax (3,890) (1,101) (3,890) (198)
- Fair value adjustment on associate (1,362) -
Total recognised gains and losses (4,590) 11,329 83,560 6,719
CONSOLIDATED BALANCE SHEET
At 30 September 2003
INFLATION ADJUSTED HISTORICAL COST
Unaudited Audited Unaudited Audited
at at at at
30 Sept 31 March 30 Sept 31 March 2003
2003 2003 2003
ASSETS
Non-current assets 229,918 147,541 139,798 23,879
Current assets 214,406 226,078 192,767 75,754
Total assets 444,324 373,619 332,565 99,633
EQUITY AND LIABILITIES
Capital and reserves 230,344 227,495 148,919 56,957
Minority interest 6,960 5,650 1,116 486
Non-current liabilities 139,721 93,394 115,233 25,841
Current liabilities 67,299 47,080 67,297 16,349
Total equity and liabilities 444,324 373,619 332,565 99,633
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 September 2003
INFLATION ADJUSTED -Unaudited
Share Share Non- Retained Total
Capital Premium Distributable Earnings and
Reserves Shareholders
for dividend
Balance at 1 April 2003 1,557 110,638 42,617 72,683 227,495
Net loss attributable to shareholders - - - (14,059) (14,059)
Net gains not recognised in income statement:
- Increase in valuation of quoted investments - - - 10,831 10,831
- Fair value adjustment on associate - - - (1,362) (1,362)
Cape Grace Hotel - - 12,865 - 12,865
Share options exercised - 20 - - 20
Dividend for 2003 - final - - - (5,446) (5,446)
Balance at 30 September 2003 1,557 110,658 55,482 62,647 230,344
Balance at 1 April 2002 1,556 98,141 23,474 18,752 141,923
Net profit attributable to shareholders - - - 9,884 9,884
Net gains not recognised in income statement:
- Increase in valuation of quoted investments - - - 1,445 1,445
Cape Grace Hotel - - 16,312 - 16,312
Share options exercised - 189 - - 189
Dividend for 2002 - final - - - (4,656) (4,656)
Balance at 30 September 2002 1,556 98,330 39,786 25,425 165,097
HISTORICAL COST - Unaudited
Share Share Non- Retained Total
Capital Premium Distributable Earnings and
Reserves Shareholders
for dividend
Balance at 1 April 2003 16 5,305 505 51,131 56,957
Net profit attributable to shareholders - - - 67,984 67,984
Net gains not recognised in income statement:
-Increase in valuation of quoted investments - - - 15,576 15,576
Cape Grace Hotel - - 10,268 - 10,268
Share options exercised - 24 - - 24
Dividend for 2003 - final - - - (1,890) (1,890)
16 5,329 10,773 132,801 148,919
Balance at 30 September 2003
Balance at 1 April 2002 16 991 627 8,796 10,430
Net profit attributable to shareholders - - - 5,918 5,918
Net gains not recognised in income statement:
-Increase in valuation of quoted investments - - - 801 801
Cape Grace Hotel - - 2,270 - 2,270
Share options exercised - 27 - - 27
Dividend for 2002 - final - - - (492) (492)
Balance at 30 September 2002 16 1,018 2,897 15,023 18,954
CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 30 September 2003
INFLATION ADJUSTED HISTORICAL COST
Unaudited Unaudited Unaudited Unaudited
6 months to 6 months to 6 months to 6 months to
30 Sept 30 Sept 30 Sept 30 Sept
2003 2002 2003 2002
Cash flows from operating activities
Profit before taxation (1,701) 20,655 78,242 6,898
Adjustment for:
Non-operating cash flow (77,458) (28,802) (55,994) (4,035)
Non-cash items 11,896 8,138 8,343 1,432
Operating cash flow before working capital changes (67,263) (9) 30,591 4,295
Generated from /(used in) working capital changes (8,819) 12,023 (13,176) (892)
Operating cash flow (76,082) 12,014 17,415 3,403
Income tax paid (10,144) (2,743) (2,474) (101)
Net cash generated from/( used in) operating (86,226) 9,271 14,941 3,302
activities
Net cash used in investing activities (3,464) (1,416) (2,470) (255)
Net cash used in financing activities (21,041) (31,474) (1,178) (1,226)
Net effect of exchange rate changes
on cash and cash equivalents 82,798 31,792 59,541 4,422
Net increase/(decrease) in cash and cash (27,933) 8,173 70,834 6,243
equivalents
Cash and cash equivalents at 31 March 2003 151,311 64,389 52,544 6,817
Cash and cash equivalents at 30 September 2003 123,378 72,562 123,378 13,060
SEGMENT INFORMATION
Turnover
Hotel 20,728 17,101 14,425 2,430
Supermarkets 130,072 114,309 89,248 15,897
Retail 32,637 27,563 22,795 3,831
183,437 158,973 126,468 22,158
Operating profit
Hotel (1,931) 2,337 684 447
Supermarkets 6,458 12,353 11,620 1,460
Retail 4,189 6,244 7,196 668
Corporate and other (2,010) (2,588) (213) 35
6,706 18,346 19,287 2,610
Total assets
Hotel 162,604 108,492 125,768 13,882
Supermarkets 67,407 59,016 43,376 6,624
Retail 78,582 53,338 46,118 6,476
Corporate and other 135,731 69,006 117,303 10,434
444,324 289,852 332,565 37,416
SUPLEMENTARY INFORMATION
Capital expenditure 9,062 4,339 5,275 632
Depreciation 3,972 2,439 1,413 232
Accounting policies
The accounting policies are the same as those used in preparing the 31st March
2003 annual financial statements.
Note to inflation adjusted financial statements
The consumer price indices used to restate the financial statements at 30
September 2003 are as follows:
30 September 2002 2,357.7
31 March 2003 4,548.9
30 September 2003 13,099.4
For further information contact either:
Zimbabwe Christopher Parvin +263-4-252068-78
Roy Franklin +263-4-252068-78
United Kingdom Corinna Dorward +44-20-7-4572020
Directors: JRT Moxon (Chairman), ACL Parvin (Chief Executive)
DE Stephens, MA Masunda, M Wilson
Website address
http://www.meiklesafrica.co.zw
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