MEIKLES
LIMITED
REVIEWED CONDENSED
FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED
30 SEPTEMBER 2020
CHAIRMAN’S STATEMENT
Operating environment
The trading environment during the period under review remained
turbulent and was exacerbated by the effects of the COVID-19
pandemic.
The effects of COVID-19 on the Group’s operations were mitigated
by various measures implemented by the Government and the Group.
Both Agriculture and Supermarkets segments were designated
essential services and continued operating during the lockdown
period albeit at reduced daily trading hours. Consequently, sales
volumes declined during the period under review compared to the
same period of the previous financial year. The hospitality
segment’s operations were closed for the entire six months under
review.
Group Financial Overview
The Group remains in a sound financial position with cash in
hand substantially exceeding borrowings. The Board plans to
maintain this cash positive position for the foreseeable
future.
Group expansion and renovation projects completed and initiated
during the period under review are estimated at ZWL 2 billion. The
return on these projects will benefit the Group, partly in the
current financial year and partly in the following year.
The Group strategy is based on an enhancement over time of its
different segments and on a fair distribution by way of dividend to
its shareholders.
Shareholders are being asked to approve a share buyback scheme
at the upcoming Annual General Meeting, but implementation will be
guided largely by expected receipt of funds on deposit with
Government. Shareholders are advised that negotiations leading to
the receipt of these funds are progressing with some traction.
Group Financial Performance
The Group fared well against the impediments brought about by
the COVID-19 pandemic.
Inflation adjusted Group revenue of ZWL 11.2 billion retreated
by 8% compared to the same period of the previous year due to
COVID-19 induced decline in sales volumes across the Group’s
operations.
In historical cost terms, Group revenue grew by 683% to ZWL 8.4
billion (Previous year: ZWL 1.1 billion) reflecting the effect of
inflation driven price increases and exchange rate movement on
local and export sales respectively.
Group operating profit from continuing operations for the period
in inflation adjusted terms was ZWL 660.4 million (previous year:
ZWL 1.1 billion).
Group operating profit for the period in historical cost terms
grew by 682% to ZWL 1.7 billion from ZWL 212.3 million in the same
period of previous year.
Inflation adjusted Group Profit after tax of ZWL 189 million
(Previous period: ZWL 2.1 billion) was impacted adversely by the
monetary loss of ZWL 1.1 billion arising from the US$ denominated
bank and receivable balances.
Group Profit after tax for the six month period, amounted to ZWL
1.9 billion expressed in terms of historical cost (Previous year:
ZWL 160.1 million), an increase of 1087% boosted by exchange
gains.
Group net current assets denominated in foreign currency on
30 September 2020 were US$ 18.7 million. The Group’s statement of
financial position remains strong despite COVID-19 disruptions
during the period under review.
TM Supermarkets
trading as TM and PnP
Revenue for the period was ZWL 10.0 billion in inflation
adjusted terms (Previous period: ZWL 10.8 billion). Units sold
declined by 31% during the period under review due to COVID-19
restrictions and shrinking disposable incomes. The segment lost
trading days as seven branches closed for days for disinfection
purposes following COVID-19 cases.
Operating profit for the period amounted to ZWL 306.1 million in
inflation adjusted terms, compared to ZWL 411.7 million achieved in
the previous period.
In historical cost terms the operating profit for the period
amounted to ZWL 1.1 billion up from ZWL 114.8 million in the
previous period.
Despite constraints brought about by COVID-19, the segment
opened a new store in Aspindale, Harare in July
2020. Work is at an advanced stage for another new branch in
Harare that should be opened
before the end of December 2020. The
store in Hwange was closed for major renovations and will reopen
before the end of December 2020 under
the Pick n Pay brand.
Tanganda
Revenue of ZWL 935 million in inflation adjusted terms was 15%
lower than ZWL 1.1 billion achieved during the six months ended
30 September 2019.
Operating profit in inflation adjusted terms was ZWL 402.9
million compared with ZWL 604.5 million in the previous period. In
the past season all crops were affected by lack of rain and
power.
Operating profit in historical cost terms was ZWL 573.6 million
(previous period ZWL 95.4 million).
Bulk tea export sales of 3 282 tonnes were 11% lower than 3 669
tonnes sold in the comparative period last year. Average
international bulk tea export price for the period retreated to
US$1.35/kg from US$1.47/kg in the six months’ period to
30 September 2019. Bulk tea
production for the period declined by 17% primarily due to adverse
weather. Packed tea sales volumes grew by 14%.
The volume of Macadamia production declined by 37% from 854
tonnes in prior year season down to 537 tonnes attributed to the
drought and failure to irrigate crops due to power losses. The
average price of primary grades of US$5.37 was 8% firmer than in the prior
period.
The volume of avocado export sales grew by 15% to 1671 tonnes
from 1 450 tonnes in the comparative period. However, due to the
lockdowns in Europe that resulted
in massive closure of restaurants and hotels, the avocado average
selling price declined by 37% from US$1.62/kg in the half year ended 30 September 2019 down to US$1.02/kg for six months ended 30 September
2020.
The construction of the 1.8 Mega
Watt solar farm at Ratelshoek, Chipinge was completed in
September 2020. The plant is now
supplying power for irrigation and acting as a standby source of
power for the factory, supported by diesel generators when power
supply from the National grid is interrupted. During the current
power outages 70% diesel savings have been realised when compared
with prior year usage. Two more solar power plants are under
construction at Tingamira and Jersey estates and are scheduled for
completion by January 2021.
Tanganda’s contribution to foreign currency generation was
recognised by Zimtrade as the segment was awarded ‘Processed Foods
- exporter of the year award 2019’.
Hospitality
The segment’s operations in Victoria
Falls were affected for the entire period under review as
international tourism and travel was disrupted by the COVID-19
pandemic. The hotel reopened on 1 November
2020. Our current focus is on the refurbishment roll out
that is scheduled to commence at the beginning of 2021.
Operating profit in inflation adjusted terms was ZWL 33.3
million compared to the previous period of ZWL 154.2 million.
Properties
Plans to transform and reconfigure the Group’s properties have
been finalised and roll out has commenced. Some of the properties
will be disposed of and proceeds reinvested in strategic
locations.
Group leadership
Three independent non-executive directors were appointed to the
main board on 31 July 2020 in line
with the Companies and Other Business Entities Act and Zimbabwe
Stock Exchange Listings Requirements. Executive management
structures are being reviewed ahead of the stepping down of the
Executive Chairman from the executive role to become non-executive
Chairman on 31 March 2020.
Outlook
The Group is well placed to take advantage of opportunities that
may arise as it has substantial resources to support its
strategies. To this end, capital projects across the subsidiaries
will be completed as planned.
There are strong indications that the forthcoming agricultural
season will be more positive than the previous two seasons, which
augurs well for Tanganda.
The COVID-19 induced decline in volumes experienced at TM Pick n
Pay appears to have eased.
Corporate Social Responsibility
The Group supported the fight against COVID-19 through its
subsidiaries and the Meikles Foundation. Supermarket segment
donated face masks to customers through the branch network and
accelerated the distribution of food hampers as well as blankets to
elderly homes and orphanages. In addition, the segment
partnered with Zimbabwe Broadcasting Corporation (ZBC) to raise
awareness of the COVID-19 pandemic and recommended precautionary
measures targeting both urban and rural communities. Tanganda
contributed to the construction of provincial and district COVID-19
isolation centres. Meikles Foundation provided food stuffs to
vulnerable members of society in Epworth.
Dividend
The Company intends to declare two interim dividends and a final
dividend based on profits for the year. The first interim dividend
declared is ZWL 42.5 cents per share
amounting to ZWL 111.0 million which is the same as the final
dividend in the previous year.
Appreciation
I would like to extend my appreciation to our customers,
suppliers, shareholders, and regulatory authorities for their
continued support. I extend also my appreciation to my fellow
Directors, and to management and staff for their dedication and
commitment.
JRT Moxon
Executive Chairman
25 November 2020
CONSOLIDATED STATEMENT OF PROFIT OR
LOSS AND OTHER COMPREHENSIVE INCOME
| FOR THE SIX MONTHS
ENDED 30 SEPTEMBER 2020 |
|
|
|
|
|
|
|
INFLATION ADJUSTED |
HISTORICAL COST* |
|
|
Reviewed |
Unaudited |
Unaudited |
Unaudited |
|
|
30 Sep
2020 |
30 Sep
2019 |
30 Sep
2020 |
30 Sep
2019 |
| CONTINUING
OPERATIONS |
|
ZWL
000 |
ZWL
000 |
ZWL
000 |
ZWL
000 |
| Revenue |
|
11,218,926 |
12,147,997 |
8,411,317 |
1,074,373 |
| Net operating
costs |
|
(10,558,505) |
(11,056,642) |
(6,750,237) |
(862,060) |
|
|
|
|
|
|
| Operating
profit |
|
660,421 |
1,091,355 |
1,661,080 |
212,313 |
| Investment income |
|
5,150 |
532 |
841 |
44 |
| Finance costs |
|
(121,556) |
(75,599) |
(101,374) |
(5,670) |
| Net exchange gains /
(losses) |
|
1,428,081 |
(111,581) |
1,050,643 |
3,231 |
| Fair value adjustments
on biological assets |
|
(495,029) |
(54,631) |
(156,034) |
(6,901) |
| Net monetary (loss) /
gain |
|
(684,721) |
1,290,819 |
- |
- |
| Profit before
tax |
|
792,346 |
2,140,895 |
2,455,156 |
203,017 |
| Income tax
expense |
|
(603,914) |
(359,607) |
(523,569) |
(44,482) |
| Profit for the
period from continuing operations |
|
188,432 |
1,781,288 |
1,931,587 |
158,535 |
|
|
|
|
|
|
| DISCONTINUED
OPERATION |
|
|
|
|
|
| Profit / (loss) for
the period from discontinued operation |
|
906 |
328,077 |
(46,553) |
1,548 |
| Profit for the
period |
|
189,338 |
2,109,365 |
1,885,034 |
160,083 |
|
|
|
|
|
|
| Other comprehensive
income, net of tax |
|
|
|
|
|
| Items that may be
reclassified subsequently to profit or loss: |
|
|
|
|
|
|
Exchange rate and monetary adjustments on translation of foreign
operations |
|
236,206 |
236,602 |
993,740 |
336,380 |
| Other comprehensive
income for the period, net of tax |
|
236,206 |
236,602 |
993,740 |
336,380 |
|
|
|
|
|
|
| TOTAL COMPREHENSIVE
INCOME FOR THE PERIOD |
|
425,544 |
2,345,967 |
2,878,774 |
496,463 |
|
|
|
|
|
|
| Profit for the
period attributable to: |
|
|
|
|
|
|
Owners of the parent |
|
75,723 |
1,691,238 |
1,541,784 |
134,983 |
|
Non-controlling interests |
|
113,615 |
418,127 |
343,250 |
25,100 |
|
|
189,338 |
2,109,365 |
1,885,034 |
160,083 |
| Total comprehensive
income is attributable to: |
|
|
|
|
|
|
Owners of the parent |
|
311,929 |
1,927,840 |
2,535,524 |
471,363 |
|
Non-controlling interests |
|
113,615 |
418,127 |
343,250 |
25,100 |
|
|
425,544 |
2,345,967 |
2,878,774 |
496,463 |
| Earnings per share
(cents) |
|
|
|
|
|
| Basic earnings per
share from continuing and discontinued operations |
|
29.01 |
647.82 |
590.58 |
51.70 |
| Basic earnings per
share from continuing operations |
|
28.66 |
522.15 |
608.41 |
51.11 |
|
|
|
|
|
|
| Diluted earnings per
share from continuing and discontinued operations |
|
27.21 |
607.73 |
554.03 |
48.51 |
| Diluted earnings per
share from continuing operations |
|
26.88 |
489.84 |
570.76 |
47.95 |
|
|
|
|
|
|
| Headline earnings per
share from continuing and discontinued operations |
|
28.75 |
648.01 |
589.96 |
51.77 |
| Headline earnings per
share from continuing operations |
|
28.28 |
522.00 |
607.79 |
47.70 |
|
|
|
|
|
|
| Diluted headline
earnings per share from continuing and discontinued operations |
|
26.98 |
607.91 |
553.45 |
48.57 |
| Diluted headline
earnings per share from continuing operations |
|
26.53 |
489.70 |
570.18 |
44.75 |
|
|
|
|
|
|
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
AS AT 30
SEPTEMBER 2020
|
|
INFLATION ADJUSTED |
HISTORICAL COST* |
|
|
Reviewed |
Audited |
Unaudited |
Unaudited |
|
|
30 Sep
2020 |
31 Mar
2020 |
30 Sep
2020 |
31 Mar
2020 |
|
|
ZWL
000 |
ZWL
000 |
ZWL
000 |
ZWL
000 |
| ASSETS |
|
|
|
|
|
| Non-current
assets |
|
|
|
|
|
| Property, plant and
equipment |
|
6,758,249 |
6,643,826 |
720,299 |
403,617 |
| Investment
property |
|
7,904 |
7,993 |
228 |
231 |
| Right of use
assets |
|
1,465,955 |
1,086,871 |
398,907 |
75,885 |
| Investment in Mentor
Africa (Pty) Limited |
|
559,727 |
467,536 |
559,727 |
171,813 |
| Biological assets |
|
42,163 |
61,234 |
42,163 |
22,503 |
| Intangible assets |
|
4,272 |
4,272 |
124 |
124 |
| Other financial
assets |
|
869,274 |
719,396 |
866,592 |
263,440 |
| Deferred tax |
|
353 |
189 |
78,029 |
20,637 |
| Total non-current
assets |
|
9,707,897 |
8,991,317 |
2,666,069 |
958,250 |
|
|
|
|
|
|
| Current
assets |
|
|
|
|
|
| Inventories |
|
2,246,657 |
2,109,719 |
2,007,275 |
565,008 |
| Trade and other
receivables |
|
2,104,779 |
1,692,840 |
2,072,374 |
606,212 |
| Biological assets –
produce on bearer plants |
|
- |
509,002 |
- |
187,052 |
| Other financial
assets |
|
6,009 |
9,641 |
6,009 |
3,543 |
| Cash and bank
balances |
|
665,849 |
714,225 |
665,849 |
262,469 |
| Non-current assets held
for sale |
|
13 |
1,055 |
6 |
9 |
| Total current
assets |
|
5,023,307 |
5,036,482 |
4,751,513 |
1,624,293 |
|
|
|
|
|
|
| Total
assets |
|
14,731,204 |
14,027,799 |
7,417,582 |
2,582,543 |
|
|
|
|
|
|
| EQUITY AND
LIABILITIES |
|
|
|
|
|
| Capital and
reserves |
|
|
|
|
|
| Share capital |
|
89,401 |
89,401 |
2,611 |
2,611 |
| Share premium |
|
111,561 |
111,561 |
3,925 |
3,925 |
| Other reserves |
|
148,464 |
(93,508) |
1,389,511 |
395,603 |
| Retained earnings |
|
7,379,329 |
7,444,436 |
2,431,504 |
1,020,252 |
| Equity attributable to
equity holders of the parent |
|
7,728,755 |
7,551,890 |
3,827,551 |
1,422,391 |
| Non-controlling
interests |
|
2,376,786 |
2,272,661 |
512,215 |
177,063 |
| Total equity |
|
10,105,541 |
9,824,551 |
4,339,766 |
1,599,454 |
|
|
|
|
|
|
| Non-current
liabilities |
|
|
|
|
|
| Borrowings |
|
81,269 |
79,771 |
81,269 |
29,314 |
| Lease liabilities |
|
450,318 |
248,613 |
450,318 |
91,527 |
| Deferred tax |
|
1,822,849 |
1,767,605 |
275,002 |
88,022 |
| Total non-current
liabilities |
|
2,354,436 |
2,095,989 |
806,589 |
208,863 |
|
|
|
|
|
|
| Current
liabilities |
|
|
|
|
|
| Trade and other
payables |
|
2,091,814 |
2,004,900 |
2,091,814 |
736,775 |
| Borrowings |
|
153,518 |
83,779 |
153,518 |
30,788 |
| Lease liabilities |
|
25,895 |
18,580 |
25,895 |
6,663 |
| Total current
liabilities |
|
2,271,227 |
2,107,259 |
2,271,227 |
774,226 |
|
|
|
|
|
|
| Total liabilities |
|
4,625,663 |
4,203,248 |
3,077,816 |
983,089 |
|
|
|
|
|
|
| Total equity and
liabilities |
|
14,731,204 |
14,027,799 |
7,417,582 |
2,582,543 |
CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020
|
|
|
|
|
| INFLATION
ADJUSTED |
|
|
|
|
|
Share
capital |
Share
premium |
Other reserves |
Investment revaluation |
|
ZWL 000 |
ZWL 000 |
ZWL
000 |
ZWL
000 |
| 2020 –
Reviewed |
|
|
|
|
| Balance at 1 April
2020 |
89,401 |
111,561 |
788,663 |
(882,171) |
| Profit for the
period |
- |
- |
- |
- |
| Restatement of
property |
- |
- |
5,766 |
- |
| Other comprehensive
income for the period |
- |
- |
236,206 |
- |
| Dividend paid –
ordinary shareholders |
- |
- |
- |
- |
| Non-controlling
interests arising from Mopani Property Development (Private)
Limited |
- |
- |
- |
- |
| Balance at 30 September
2020 |
89,401 |
111,561 |
1,030,635 |
(882,171) |
|
|
|
|
|
| 2019 –
Unaudited |
|
|
|
|
| Balance at 1 April
2019 |
89,344 |
102,416 |
2,168,566 |
165,078 |
| Profit for the
period |
- |
- |
- |
- |
| Transfer from
non-distributable reserves |
- |
- |
(189,851) |
- |
| Other comprehensive
income for the period |
- |
- |
236,602 |
- |
| Dividend paid –
ordinary shareholders |
- |
- |
- |
- |
| Non-controlling
interests arising from Mopani Property Development (Private)
Limited |
- |
- |
- |
- |
| Balance at 30 September
2019 |
89,344 |
102,416 |
2,215,317 |
165,078 |
|
|
|
|
|
| INFLATION
ADJUSTED |
|
|
|
|
|
Retained earnings |
Attributable to owners of parent |
Non-controlling
interests |
Total |
|
ZWL
000 |
ZWL 000 |
ZWL 000 |
ZWL 000 |
| 2020 –
Reviewed |
|
|
|
|
| Balance at 1 April
2020 |
7,444,436 |
7,551,890 |
2,272,661 |
9,824,551 |
| Profit for the
period |
75,723 |
75,723 |
113,615 |
189,338 |
| Restatement of
property |
- |
5,766 |
- |
5,766 |
| Other comprehensive
income for the period |
- |
236,206 |
- |
236,206 |
| Dividend paid –
ordinary shareholders |
(140,830) |
(140,830) |
(10,453) |
(151,283) |
| Non-controlling
interests arising from Mopani Property Development (Private)
Limited |
- |
- |
963 |
963 |
| Balance at 30 September
2020 |
7,379,329 |
7,728,755 |
2,376,786 |
10,105,541 |
|
|
|
|
|
| 2019 –
Unaudited |
|
|
|
|
| Balance at 1 April
2019 |
4,463,277 |
6,988,681 |
1,313,409 |
8,302,090 |
| Profit for the
period |
1,691,238 |
1,691,238 |
418,127 |
2,109,365 |
| Transfer from
non-distributable reserves |
189,851 |
- |
- |
- |
| Other comprehensive
income for the period |
- |
236,602 |
- |
236,602 |
| Dividend paid –
ordinary shareholders |
(152,060) |
(152,060) |
- |
(152,060) |
| Non-controlling
interests arising from Mopani Property Development (Private)
Limited |
- |
- |
47,011 |
47,011 |
| Balance at 30 September
2019 |
6,192,306 |
8,764,461 |
1,778,547 |
10,543,008 |
HISTORICAL COST*
|
Share
capital |
Share
premium |
Other reserves |
Investment revaluation |
|
ZWL 000 |
ZWL 000 |
ZWL
000 |
ZWL
000 |
| 2020 –
Unaudited |
|
|
|
|
| Balance at 1 April
2020 |
2,611 |
3,925 |
654,854 |
(259,251) |
| Profit for the
period |
- |
- |
- |
- |
| Restatement of
property |
- |
- |
168 |
- |
| Other comprehensive
income for the period |
- |
- |
993,740 |
- |
| Dividend paid –
ordinary shareholders |
- |
- |
- |
- |
| Non-controlling
interests arising from Mopani Property Development (Private)
Limited |
- |
- |
- |
- |
| Balance at 30 September
2020 |
2,611 |
3,925 |
1,648,762 |
(259,251) |
|
|
|
|
|
| 2019 –
Unaudited |
|
|
|
|
| Balance at 1 April
2019 |
2,611 |
3,925 |
74,529 |
(9,600) |
| Profit for the
period |
- |
- |
- |
- |
| Transfer from
non-distributable reserves |
- |
- |
(25,000) |
- |
| Other comprehensive
income for the period |
- |
- |
336,380 |
- |
| Dividend paid –
ordinary shareholders |
- |
- |
- |
- |
| Non-controlling
interests arising from Mopani Property Development (Private)
Limited |
- |
- |
- |
- |
| Balance at 30 September
2019 |
2,611 |
3,925 |
385,909 |
(9,600) |
|
Retained earnings |
Attributable to owners of parent |
Non-controlling
interests |
Total |
|
ZWL
000 |
ZWL 000 |
ZWL 000 |
ZWL 000 |
| 2020 –
Unaudited |
|
|
|
|
| Balance at 1 April
2020 |
1,020,252 |
1,422,391 |
177,063 |
1,599,454 |
| Profit for the
period |
1,541,784 |
1,541,784 |
343,250 |
1,885,034 |
| Restatement of
property |
- |
168 |
- |
168 |
| Other comprehensive
income for the period |
- |
993,740 |
- |
993,740 |
| Dividend paid –
ordinary shareholders |
(130,532) |
(130,532) |
(8,729) |
(139,261) |
| Non-controlling
interests arising from Mopani Property Development (Private)
Limited |
- |
- |
631 |
631 |
| Balance at 30 September
2020 |
2,431,504 |
3,827,551 |
512,215 |
4,339,766 |
|
|
|
|
|
| 2019 –
Unaudited |
|
|
|
|
| Balance at 1 April
2019 |
131,914 |
203,379 |
48,999 |
252,378 |
| Profit for the
period |
134,983 |
134,983 |
25,100 |
160,083 |
| Transfer from
non-distributable reserves |
25,000 |
- |
- |
- |
| Other comprehensive
income for the period |
- |
336,380 |
- |
336,380 |
| Dividend paid –
ordinary shareholders |
(20,024) |
(20,024) |
- |
(20,024) |
| Non-controlling
interests arising from Mopani Property Development (Private)
Limited |
- |
- |
6,190 |
6,190 |
| Balance at 30 September
2019 |
271,873 |
654,718 |
80,289 |
735,007 |
| CONSOLIDATED
STATEMENT OF CASHFLOWS |
|
|
|
|
| FOR THE SIX MONTHS
ENDED 30 SEPTEMBER 2020 |
|
|
|
|
|
INFLATION ADJUSTED |
HISTORICAL COST* |
|
Reviewed |
Unaudited |
Unaudited |
Unaudited |
|
30 Sep
2020 |
30 Sep
2019 |
30 Sep
2020 |
30 Sep
2019 |
|
ZWL 000 |
ZWL
000 |
ZWL 000 |
ZWL
000 |
| CONTINUING AND
DISCONTINUED OPERATIONS |
|
|
|
|
Cash flows from operating activities |
|
|
|
|
| Profit / (loss) before
tax – continuing operations |
792,346 |
2,140,895 |
2,455,156 |
203,017 |
|
– discontinued operations |
906 |
325,040 |
(46,553) |
1,548 |
|
793,252 |
2,465,935 |
2,408,603 |
204,565 |
| Adjustments for: |
|
|
|
|
| - Depreciation and
impairment of property, plant and equipment, investment property
and right-of-use assets |
323,995 |
141,378 |
49,161 |
9,934 |
| - Net interest |
120,487 |
81,575 |
103,706 |
5,626 |
| - Net exchange (gains)
/ losses |
(1,376,887) |
143,231 |
(1,012,668) |
1,711 |
| - Fair value
adjustments on biological assets |
495,029 |
54,631 |
156,034 |
6,901 |
| - Profit on disposal
of property, plant and equipment – continuing operations |
(1,734) |
(9,348) |
(1,785) |
(1,048) |
| - Profit on disposal
of property, plant and equipment – discontinued operations |
(706) |
- |
(575) |
- |
| Operating cash flow
before working capital changes |
353,436 |
2,877,402 |
1,702,476 |
227,689 |
|
|
|
|
|
| (Increase) / decrease
in inventories |
(136,938) |
181,011 |
(1,442,267) |
(131,459) |
| (Increase) / decrease
in trade and other receivables |
(205,296) |
121,937 |
(357,694) |
(21,949) |
| (Decrease) / increase
in trade and other payables |
(170,011) |
(224,874) |
1,061,915 |
171,767 |
| Cash (used in) /
generated from operations |
(158,809) |
2,955,476 |
964,430 |
246,048 |
| Income taxes paid |
(422,593) |
(249,160) |
(268,047) |
(34,624) |
| Net cash (used in)
/ generated from operating activities |
(581,402) |
2,706,316 |
696,383 |
211,424 |
|
|
|
|
|
| Cash flows from
investing activities |
|
|
|
|
| Payment for property,
plant and equipment |
(402,837) |
(1,092,143) |
(336,954) |
(95,100) |
| Proceeds from disposal
of property, plant and equipment |
2,530 |
11,102 |
2,363 |
1,220 |
| Net movement in
service assets |
15 |
(1,192) |
6 |
(115) |
| Net movement in
other investments |
(10,409) |
167 |
(16,526) |
37 |
| Net movement in
biological assets |
33,044 |
(714) |
11,357 |
820 |
| Investment income |
440 |
1,002 |
213 |
44 |
| Net cash used in
investing activities |
(377,217) |
(1,081,778) |
(339,541) |
(93,094) |
|
|
|
|
|
| Cash flows from
financing activities |
|
|
|
|
| Net increase /
(decrease) in interest bearing borrowings |
71,238 |
(26,222) |
174,685 |
(3,453) |
| Non-controlling
interests arising from Mopani Property Development (Private)
Limited |
963 |
47,011 |
631 |
6,190 |
| Finance costs |
(121,556) |
(82,570) |
(98,430) |
(5,670) |
| Lease movement |
26,112 |
38,076 |
26,112 |
96 |
| Dividend paid –
ordinary shareholders |
(111,974) |
(152,063) |
(109,396) |
(20,024) |
|
–minorities |
(10,453) |
- |
(8,729) |
- |
| Net cash used in
financing activities |
(145,670) |
(175,768) |
(15,127) |
(22,861) |
|
|
|
|
|
| Net (decrease) /
increase in cash and bank balances |
(1,104,289) |
1,448,770 |
341,715 |
95,469 |
| Cash and bank balances
at the beginning of the period |
714,225 |
697,185 |
262,469 |
33,,006 |
| Translation of foreign
entity |
(844,320) |
(734,274) |
11,245 |
2,578 |
| Restatement of
property, plant and equipment |
5,766 |
- |
168 |
- |
| Net effect of exchange
rate changes on cash and bank balances |
1,290,654 |
(414,983) |
50,252 |
2,680 |
| Effects of inflation
adjustments |
603,813 |
18,747 |
- |
- |
| Cash and bank
balances at the end of the period |
665,849 |
1,015,445 |
665,849 |
133,733 |
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of preparation
The condensed consolidated financial statements are prepared
from statutory records that are maintained under the historical
cost basis except for biological assets and certain financial
instruments which are measured at fair value. Historical cost is
generally based on the fair value of the consideration given in
exchange for assets. The historical costs have been adjusted for
the effects of applying International Accounting Standard (“IAS”)
29 – ‘Financial Reporting in Hyperinflationary Economies’ .
Refer to note 2.3 for further details.
These condensed consolidated financial statements have been
prepared in accordance with the International Accounting Standard
(“IAS”) 34 Interim Financial Reporting and should be read in
conjunction with the Group’s annual report for the full year to
31 March 2020.
These condensed consolidated financial statements have been
prepared under the supervision of Thempson Muzvangwandoga CA (Z),
the Group Chief Financial Officer, registered public accountant
PAAB Number 2724.
2. Accounting policies
Accounting policies and methods of computation applied in the
preparation of these condensed consolidated financial statements
are consistent, in all material respects, with those used in the
preparation of the annual report. New applicable standards and
improvements which became effective in the current year have been
complied with and have had no material impact on these condensed
consolidated financial statements.
2.1 Functional and presentation
currency
These condensed consolidated financial statements are presented
in Zimbabwe dollars (ZWL), which
is the Group’s functional and presentation currency. The ZWL was
designated as the sole transactional, functional and reporting
currency following the promulgation of Statutory Instrument 33 of
2019 dated 22 February 2019 and
Statutory Instrument 142 of 2019 dated 24
June 2019.
2.2 Historical reporting*
Historical cost financial results are provided only as
supplementary information. The primary financial statements are the
inflation adjusted results. The auditor’s review conclusion relates
only to the inflation adjusted financial results.
2.3 Hyperinflation
On 11 October 2019, the Public
Accountants and Auditors Board (“PAAB”) issued a pronouncement on
the application of IAS 29. The pronouncement requires that entities
operating in Zimbabwe with
financial periods ending on or after 1 July
2019, prepare and present financial statements in line with
the requirements of IAS 29.
The Directors have made appropriate adjustments to reflect the
changes in the general purchasing power on the ZWL and for the
purposes of fair presentation in accordance with IAS 29, these
changes have been made on the historical cost financial
information. Various assumptions have been made, with the
significant assumption being the use of the consumer price indices
(“CPI”), for the various years. Accordingly, the inflation adjusted
condensed consolidated financial statements represent the primary
financial results of the Group.
The source of the price indices used was the Reserve Bank of
Zimbabwe website. Below are the
indices and adjustment factors used up to 30
September 2020:
|
|
|
Indices |
Adjustment Factor |
| CPI as at 30 September
2020 |
|
|
2,205.24 |
1.00 |
| CPI as at 31 March
2020 |
|
|
810.40 |
2.72 |
| CPI as at 30 September
2019 |
|
|
290.40 |
7.59 |
|
|
|
|
|
| Average CPI 2020 |
|
|
1,630.69 |
|
| Average CPI 2019 |
|
|
192.12 |
|
3. Going concern
The Directors assess the ability of the Group to continue in
operational existence in the foreseeable future at each reporting
date. As at 30 September 2020, the
Directors have assessed the Group’s ability to continue operating
as a going concern and believe that the preparation of these
condensed consolidated financial statements on a going concern
basis is still appropriate.
The Group’s segments have put in place various measures to
mitigate the adverse impact of the COVID-19 pandemic to the
businesses. Apart from the hospitality segment, the rest of the
Group’s segments are operating as they are classified as part of
essential services. Whilst lockdown restrictions have been eased,
customer spending is still to fully recover in the Group’s retail
sector due to reduced disposable income. Gradual revenue growth is
anticipated in the second half of the financial year.
The Victoria Falls Hotel, which closed at the end of
March 2020, re-opened on the
1st of November 2020
following resumption of domestic and limited international flights
after the Government of Zimbabwe
eased restrictions in September 2020.
However, revenue is still subdued as new cases of COVID-19
infections are on the rise in major source markets. The Cape Grace
Hotel remains closed as South
Africa still has stringent protocols for visitors entering
the country from major tourist source markets.
Both the hospitality segment and the rest of the Group have
sufficient cash resources to fund operations for a prolonged period
of care and maintenance.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
4. Segment information
|
INFLATION ADJUSTED |
HISTORICAL COST* |
|
|
Reviewed |
Unaudited |
Unaudited |
Unaudited |
|
|
30 Sep 2020 |
30 Sep 2019 |
30 Sep
2020 |
30 Sep
2019 |
|
| Revenue – continuing
operations |
ZWL 000 |
ZWL 000 |
ZWL
000 |
ZWL
000 |
|
| Supermarkets |
10,025,669 |
10,756,715 |
7,501,593 |
940,930 |
|
| Agriculture |
934,539 |
1,101,423 |
750,909 |
104,271 |
|
| Hotels |
290,340 |
349,143 |
180,790 |
33,116 |
|
| Corporate* |
(31,622) |
(59,284) |
(21,975) |
(3,944) |
|
|
11,218,926 |
12,147,997 |
8,411,317 |
1,074,373 |
|
|
|
|
|
|
|
| Operating profit –
continuing operations |
|
|
|
|
|
| Supermarkets |
306,093 |
411,730 |
1,136,240 |
114,781 |
|
| Agriculture |
402,915 |
604,500 |
573,563 |
95,417 |
|
| Hotels |
33,297 |
154,212 |
52 |
14,985 |
|
| Corporate* |
(81,884) |
(79,087) |
(48,775) |
(12,870) |
|
|
660,421 |
1,091,355 |
1,661,080 |
212,313 |
|
|
|
|
|
|
|
|
INFLATION ADJUSTED |
HISTORICAL COST* |
|
|
Reviewed |
Audited |
Unaudited |
Unaudited |
|
30 Sep 2020 |
31 Mar
2020 |
30 Sep 2020 |
31 Mar 2020 |
| Segment
assets |
ZWL 000 |
ZWL
000 |
ZWL 000 |
ZWL 000 |
|
|
|
|
|
|
Supermarkets |
7,601,072 |
6,939,396 |
3,066,900 |
938,668 |
|
Agriculture |
3,761,658 |
3,800,051 |
1,546,247 |
635,265 |
| Hotels |
1,729,233 |
1,867,962 |
1,321,930 |
547,585 |
|
Corporate* |
1,639,241 |
1,420,390 |
1,482,505 |
461,025 |
|
14,731,204 |
14,027,799 |
7,417,582 |
2,582,543 |
| Segment
liabilities |
|
|
|
|
|
Supermarkets |
3,076,850 |
2,621,187 |
2,038,343 |
593,171 |
|
Agriculture |
767,745 |
806,691 |
424,384 |
172,704 |
| Hotels |
495,881 |
404,922 |
490,197 |
143,733 |
|
Corporate* |
285,187 |
370,448 |
124,892 |
73,481 |
|
4,625,663 |
4,203,248 |
3,077,816 |
983,089 |
|
|
|
|
|
|
|
|
|
| *Included
in the corporate revenue amount is an adjustment of ZWL 73.5
million (2019: ZWL 95.6 million); (Historical cost ZWL 55.5 million
(2019: ZWL 7.2 million) against revenue in respect of inter-segment
sales. Inter-company balances have been eliminated in the corporate
amounts. Corporate also includes other operating segments that are
immaterial to warrant separate disclosure. |
5.
Fair value measurement
5.1 Fair value hierarchy
IFRS 13 Fair Value Measurement specifies a hierarchy of
valuation techniques based on whether the inputs to those valuation
techniques are observable or unobservable. Fair value measurements
are categorised into Level 1, 2 or 3 based on the degree to which
the inputs to the fair value measurements are observable and the
significance of the inputs to the fair value measurement in its
entirety, which are described as follows:
• Level 1 inputs are quoted prices (unadjusted) in active markets
for identical assets or liabilities that the entity can access at
the measurement date;
• Level 2 inputs are inputs, other than quoted prices included
within Level 1, that are observable for the asset or liability,
either directly or indirectly; and
• Level 3 inputs are unobservable inputs for the asset or
liability.
5.2 Valuation of Investment Mentor Africa (Pty) Limited
(“Mentor”)
The Group’s investment in Mentor Africa (Pty) Limited is carried at
FVTOCI and is not held for trading. The investment is unlisted and
there is no active market for similar or identical investments. In
the absence of market activity and access to more observable level
1 or 2 inputs, the Group utilises level 3 inputs to determine fair
value. Valuations are performed by an independent expert valuer,
and in preparing such valuation, assumptions are made relating to
future events and financial performance.
The investment is valued at a weighted average of three valuation
methods, namely: the enterprise value (“EV”), price-to-book value
(“PBV”) and the price-to-earnings value (“PE”). The significant
unobservable inputs used in these valuations are the EV, PBV and PE
proxy multiples obtained from comparable entities listed on the
Johannesburg Stock Exchange. The applicable non-trading discount is
applied to the proxy multiples to reflect the non-tradability of
the Mentor shares as they are not listed on a stock exchange.
Fair valuations are performed annually at each financial year end,
and hence no valuation has been done for these condensed
consolidated financial statements. |
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
5. Fair value measurement
(continued)
5.3 Valuation of Biological assets
Biological assets comprise of gum and wattle plantations,
livestock and produce growing on the bearer plants. The present
value of expected net cash flows from plantations, discounted at a
current market determined pre-tax rate, was used to determine fair
value of timber plantations. The fair value for livestock was
determined by reference to the market price and these valuations
were carried out by a professional valuer not connected to the
Group. Produce growing on bearer plants is measured at fair value
less costs to sell with changes recognised in profit or loss as the
produce grows.
Fair values of tea bushes on plantations, macadamia nuts on
plantations, coffee beans on plantations and avocado fruit on
plantations is determined using Level 1 inputs on the fair value
hierarchy, whilst fair values for timber plantations and livestock
is determined using level 3 inputs.
6. Discontinued operations
Greatermans Stores
The group exited the departmental stores segment during the
first quarter of the previous financial year. The results of the
departmental stores for the current year relate to winding down
costs and proceeds from disposal of assets and are disclosed as
discontinued operations in the current period.
7. Subsequent events
There were no siginificant events after the reporting date.
8. External Auditor’s Review
Conclusion
These condensed consolidated financial statements for the six
months ended 30 September 2020 have
been reviewed by Deloitte & Touche (Chartered Accountants)
Zimbabwe who indicate that nothing
has come to their attention that causes them to believe that these
inflation adjusted condensed consolidated financial statements are
not prepared, in all material respects in accordance with IAS 34
and the requirements of the Zimbabwe Stock Exchange Listings
Requirements.
The auditor’s review statement is available for inspection at
the Company’s registered office and on the website.
Meikles Limited Website :
www.meiklesltd.com
Notice to Shareholders
Dividend declaration
Notice is hereby given that the Board of Directors declared an
Interim Dividend Number 83 of ZWL 42.5 per share payable out of the
profits for the current financial year. The dividend will be
payable on or about 18 December 2020.
Disbursements to foreign shareholders is subject to Exchange
Control Approval and payment guidelines for foreign payments. The
timetable for the dividend payment is as follows: -
| Action |
Date |
| Dividend announcement |
25 November 2020 |
| Last date to trade cum dividend |
8 December 2020 |
| Ex-dividend date |
9 December 2020 |
| Last record date |
11 December 2020 |
| Payment date |
18 December 2020 |
Shareholders are encouraged to update their payment details
through our transfer secretaries:
ZB Transfer Secretaries, 21 Natal Road, Belgravia, Harare Zimbabwe
PMberikwazvi@zb.co.zw
RMutakwa@zb.co.zw
By Order of the Board
T. Mpofu
Company Secretary
25 November 2020
