Meikles Limited’s performance for the quarter to June 30, 2021 improved significantly compared to the same period in the prior year, largely benefitting from more stable economic conditions.
The period was characterised by declining inflation compared to the same period last year while the exchange currency rate stabilised following the reintroduction of the auction system by the Reserve Bank of Zimbabwe in June last year.
The auction system has resulted in increased availability of foreign currency through formal channels for registered businesses across economic sectors.
“Trading environment during the quarter ended 30 June 2021 was characterised by sustained disinflation that commenced in July 2020 attributable to the exchange rate stability and improved access to foreign currency by manufacturers of goods.
“Covid-19 lockdown restrictions during the period under review were moderate in comparison to the hard lockdown during the same period of last year. Resultantly, sales volume growth was achieved across Group operations in comparison to the same period last year,” said company secretary Thabani Mpofu in a trading update.
During the quarter under review, group revenue from continuing operations grew by 21 percent. The agriculture segment was classified as a discontinued operation and an asset held for distribution to shareholders on 31 March 2021. Revenue for the agricultural segment was 41 percent ahead of the same period of the previous financial year.
The group’s operating profit margins exceeded the same period of last year in both inflation adjusted and historical cost terms.
Figures from the group show that sales volumes at the supermarkets segment increased by 21 percent for the quarter relative to the same period of the previous year.
Said Mr Mpofu: “During the same period of last year, sales volume was adversely impacted by stricter lockdown measures implemented by the Government in response to the outbreak of Covid-19 pandemic.”
The hotel segment recorded room occupancy was 11 percent up from no occupancy during the same period of the previous year.
According to the group, the occupancy was split 66 percent and 34 percent between foreign and local guests respectively.
During the same period last year, the hotel was closed due to measures to combat Covid-19 pandemic.
The group is upbeat the roll out of the vaccination programme in Victoria Falls will play a key role in confidence building and return of international tourism.
For the agriculture segment, bulk tea production and export sales for the quarter were 15 percent below the same period of the previous year.
Tea harvesting was affected by limited availability of labour as most of the available labour was assigned to harvest macadamia nuts and avocados during the period under review.
Mr Mpofu said the segment will invest in motorised tea harvesting machines as the shortage of labour is bound to recur during the same period going forward.
During the period, macadamia nuts harvested were 65 percent above prior year whilst avocados harvest was 27 percent ahead of the prior year. Last year’s harvest was reflective of the impact of the two year drought experienced prior to the just ended agricultural season.
While Covid 19 continues to cause uncertainties on the market, management at Meikles remains upbeat about economic growth this year.
“There is optimism that economic growth for this year will exceed the initial forecast on account of higher than expected agricultural output,” said Mr Mpofu.