Half Yearly Report
26 Agosto 2010 - 12:10PM
UK Regulatory
TIDMMIK
RNS Number : 7184R
Meikles Limited
26 August 2010
MEIKLES LIMITED
UNAUDITED FINANCIAL RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2010
CHAIRMAN'S STATEMENT
Operating environment
The trading environment has remained depressed owing to a myriad of factors
amongst them the low disposable incomes and low liquidity in the market. The
economic activity across all sectors continues to improve albeit at a very slow
pace. The IMF has revised its projected growth for Zimbabwe in 2010 to 2.2% from
6%. The Minister of Finance has projected the growth to be about 5.4% from the
initial target of 7%. Inflation which was at 5.3% as at 30 June 2010 is
expected to end the year at around 6%.
The South African economy is expected to recover gradually and post a growth of
2.4% in 2010 helped by the recovery of global demand and boosted by the FIFA
World Cup held in June/July 2010. The South African inflation rate is projected
to end the year 2010 at around 5.8%.
Group results
After a very difficult second half of 2009 where a loss of $5.2 million was
incurred, the group moved forward in the first half of 2010 and registered a
marginal profit after tax of $150,738. The group made a profit after tax of
$580,190 for the 6 months ended 30 June 2009, the period in which dollarisation
was effected. The economy started stabilising in the second half of 2009, with
stock levels improving whilst the pricing regime which was distorted in the
first half of 2009 also realigned and has continued to do so in 2010.
The group has seen growth in revenues across all business lines in the first
half of 2010. This was driven by improved product availability in retail,
increased production on the tea estates, increased occupancies in the hotels and
increase in fees and commissions from the financial services. On the other hand
the pressure on costs continued and the realignment that started in the second
half of 2009 continued in 2010. The cost of funding was also high due to the
tight liquidity situation that prevailed in the first half of the year. However,
cost containment strategies have been put in place and benefits will be realized
in future periods.
The group balance sheet shows an increase in total assets of approximately 17%
when compared to the position as at 31 December 2009. Growth was witnessed in
inventories and bank assets. The Group capital expenditure was $2.6 million
during the first half of 2010. The working capital and capital expenditure were
funded from borrowings which increased to $27.9 million (31 December 2009: $7.8
million).
TM Supermarkets
The company made a loss before tax of $841,000 (30 June 2009: loss of $86,000).
A significant growth in turnover was recorded due to improved stocking within
the branch network. Local manufacturers have also increased their output, making
it easier for local retailers to maintain healthy levels of stock. TM operated
fifty (50) outlets as at 30 June 2010 (31 December 2009: 52). In a bid to
reposition the brand, three outlets namely; Chitungwiza, Nkhulumane and Rezende
were closed whilst a new branch was opened in The Victoria Falls. Other sites
are being explored to expand the branch network. The exercise to equip the
branches with Point of Sale (POS), refurbishment of refrigeration and bakery
equipment has started and should be completed by the end of the year. The
discussions to recapitalize the supermarkets are still in progress and the board
expects these to be concluded by the end of the third quarter of this year.
Meikles Africa Hotels
The hotels division made a profit before tax of $578,000 (30 June 2009:
$465,000). The Zimbabwean hotels had a loss before tax of $442,000 (30 June
2009: loss of $508,000.), while the South African operation disclosed as part of
the "disposal group", made a profit before tax of $1.020 million (30 June 2009:
$973,000). There was a general increase in occupancy levels during the period
ended 30 June 2010 compared to the same period last year. The occupancy levels
were 32% (30 June 2009: 23%) for the Meikles Hotel, 39% (30 June 2009: 18%) for
The Victoria Falls Hotel and 61% (30 June 2009: 62%) for the Cape Grace Hotel.
The Minister of Finance in his Mid Term Fiscal Review stated that the Zimbabwe
tourism sector is expected to grow by 3.5% in the year 2010. The sector showed a
0.7% growth in tourist arrivals in the first quarter of 2010 compared to the
same period last year. Meikles Africa Hotels are well positioned to benefit from
an upsurge in business and the second six month period is generally stronger for
all three hotels. The first phase of the Meikles Hotel refurbishment will
commence before the end of the year 2010 as long term finance for this purpose
has been secured. The Cape Grace Hotel which benefited from the World Cup, is
expected to continue doing well despite the entrance of new players in that
segment of the market.
Tanganda Tea Company
The company made a loss before tax of $450,000 (30 June 2009: profit of $1.2
million). Turnover of $9.5 million was realized (30 June 2009: $5.5 million).
Exports accounted for 43% of the turnover. Approximately 5,300 tonnes of tea was
produced compared to 3,400 tonnes in the same period last year. Tea prices on
the export market were 17% better than those achieved in the same period last
year.
The cost of production per tonne was 38% higher than for the period ended 30
June 2009. The labour costs being dictated by the NEC for the Agro-Industry
have increased beyond comparison and if not addressed will become a hindrance to
the growth of the agro-industry. In addition, the continued power outages
resulted in the company resorting to alternative power sources which turned out
to be more costly.
The quality of tea continues to improve and in part accounts for the increased
tea prices. Should the rainy season be normal, the company intends to increase
the tea production to over 9,600 tonnes by 31 December 2010 (2009: 7,100
tonnes).
Thomas Meikle Stores
The division made an operating loss before tax of $2.1 million (30 June 2009:
loss of $802,000). Increased stocking of merchandise saw turnover increasing to
$5 million compared to $1.1 million for the same period last year. However, high
funding and operating costs negated the improvement in turnover and margins.
Credit facilities were launched in February 2010 and the terms will be
continuously reviewed in line with changes in the market liquidity situation.
The division is also expanding its hardware offering which has proved very
popular with clients. The product range is also being improved to meet customer
needs. Cost containment measures, including shared resources with the
supermarket operations, have been considered and are being implemented.
Kingdom Financial Holdings Limited (Kingdom)
The financial services group achieved a profit before tax of US$1.7 million for
the six months ended 30 June 2010 (30 June 2009: $500,000). The lack of
liquidity in the market constrained the capacity to create credit assets in the
Zimbabwe operations. The overall performance was driven by strong growth in the
Malawi operations.
Update on Cotton Printers liquidation
The liquidation which was approved by the Courts on 28 April 2010 is
progressing. The liquidator is in the process of evaluating bids for the
company's assets in order to settle liabilities of approximately $1.4 million
excluding the liquidator and Master's fees. It is our expectation that the
company's assets will yield sufficient cash flows to reasonably settle all
liabilities.
Disposal of Kingdom
Discussions are underway to resolve this matter.
Indigenisation
The company complied with the request to submit its status with regard to the
indigenisation to the Minister of Indigenisation. The company has also outlined
measures to ensure continued compliance with the regulations and there is
dialogue with the relevant Minister on this matter.
Specifications
All persons and companies that were specified with regard to the shareholder
dispute have since been de-specified following completion of investigations by
the regulatory authorities.
Outlook
The group continues to recover from the negative events of the past two years
and is optimistic with regard to trading for the remainder of the year 2010. The
firm base set out in the first half of the year will be optimised to ensure that
all companies and divisions return to profitability by the end of the year.
Appreciation
The progress made in the first half of the year could not have been achieved
without the support of clients, regulatory authorities, shareholders and staff.
The board fully appreciates the relationship the group has with these
stakeholders and values them dearly.
F Rwodzi
Chairman
6 August 2010
+------------------------------------------+------+--------------+--------------+----------+
| UNAUDITED CONSOLIDATED STATEMENT OF | | | | |
| COMPREHENSIVE INCOME | | | | |
+------------------------------------------+------+--------------+--------------+----------+
| FOR THE HALF YEAR ENDED 30 JUNE 2010 | | | | |
+------------------------------------------+------+--------------+--------------+----------+
| | | 30 | 30 | |
| | | June | June | |
| | | 2010 | 2009 | |
| | | US$ | US$ | |
+------------------------------------------+------+--------------+--------------+----------+
| | Note | | Restated | |
+------------------------------------------+------+--------------+--------------+----------+
| Continuing operations | | | | |
+------------------------------------------+------+--------------+--------------+----------+
| Revenue | | 114 265 338 | 40 067 572 | |
+------------------------------------------+------+--------------+--------------+----------+
| Cost of sales | | (89 952 115) | (28 993 507) | |
+------------------------------------------+------+--------------+--------------+----------+
| Gross profit | | 24 313 223 | 11 074 065 | |
+------------------------------------------+------+--------------+--------------+----------+
| Other income | | 2 590 351 | 1 505 648 | |
+------------------------------------------+------+--------------+--------------+----------+
| Employee costs | | (14 966 194) | (5 085 125) | |
+------------------------------------------+------+--------------+--------------+----------+
| Occupancy costs | | (2 875 032) | (1 102 672) | |
+------------------------------------------+------+--------------+--------------+----------+
| Other operating costs | | (10 301 654) | (7 112 698) | |
+------------------------------------------+------+--------------+--------------+----------+
| Operating loss | | (1 239 306) | (720 782) | |
+------------------------------------------+------+--------------+--------------+----------+
| Finance income | | 342 681 | 650 089 | |
+------------------------------------------+------+--------------+--------------+----------+
| Finance costs | | (1 818 916) | (95 467) | |
+------------------------------------------+------+--------------+--------------+----------+
| Net exchange loss | | (17 026) | (212 148) | |
+------------------------------------------+------+--------------+--------------+----------+
| Fair value adjustments | | (146 795) | (35 264) | |
+------------------------------------------+------+--------------+--------------+----------+
| Loss before tax | | (2 879 362) | (413 572) | |
+------------------------------------------+------+--------------+--------------+----------+
| Income tax | | 963 336 | (18 651) | |
+------------------------------------------+------+--------------+--------------+----------+
| Loss for the period from continuing | | (1 916 026) | (432 223) | |
| operations | | | | |
+------------------------------------------+------+--------------+--------------+----------+
| Disposal group | | | | |
+------------------------------------------+------+--------------+--------------+----------+
| Profit for the period from disposal | 2 | 2 240 798 | 1 012 413 | |
| group | | | | |
+------------------------------------------+------+--------------+--------------+----------+
| PROFIT FOR THE PERIOD | | 324 772 | 580 190 | |
+------------------------------------------+------+--------------+--------------+----------+
| Other comprehensive income | | | | |
+------------------------------------------+------+--------------+--------------+----------+
| Exchange differences on translating | | (658 | 2 895 404 | |
| foreign operations | | 994)) | | |
+------------------------------------------+------+--------------+--------------+----------+
| Impairment of property | | - | (2 248 645) | |
+------------------------------------------+------+--------------+--------------+----------+
| Movement in other reserves | | (656 042) | 303 896 | |
+------------------------------------------+------+--------------+--------------+----------+
| Available for sale financial assets | | - | 1 168 827 | |
+------------------------------------------+------+--------------+--------------+----------+
| Other comprehensive (loss) income for | | (1 315 036) | 2 119 482 | |
| the period, net of tax | | | | |
+------------------------------------------+------+--------------+--------------+----------+
| TOTAL COMPREHENSIVE (LOSS) INCOME FOR | | (990 264) | 2 699 672 | |
| THE PERIOD | | | | |
+------------------------------------------+------+--------------+--------------+----------+
| Profit (loss) attributable to: | | | | |
+------------------------------------------+------+--------------+--------------+----------+
| Owners of the parent | | 574969 | 658 616 | |
+------------------------------------------+------+--------------+--------------+----------+
| Non-controlling interests | | (250 197) | (78 426) | |
+------------------------------------------+------+--------------+--------------+----------+
| | | 324 722 | 580 190 | |
+------------------------------------------+------+--------------+--------------+----------+
| Total comprehensive (loss) income | | | | |
| attributable to: | | | | |
+------------------------------------------+------+--------------+--------------+----------+
| Owners of the parent | | (740 067) | 2 778 098 | |
+------------------------------------------+------+--------------+--------------+----------+
| Non-controlling interests | | (250 197) | (78 426) | |
+------------------------------------------+------+--------------+--------------+----------+
| | | (990 264) | 2 699 672 | |
+------------------------------------------+------+--------------+--------------+----------+
| Basic earnings (loss) per share | | | | |
+------------------------------------------+------+--------------+--------------+----------+
| Basic earnings from continuing and | | 0.23 | 0.27 | |
| discontinued operations | | | | |
+------------------------------------------+------+--------------+--------------+----------+
| Basic (loss) earnings from continuing | | (0.68) | (0.14) | |
| operations | | | | |
+------------------------------------------+------+--------------+--------------+----------+
The 30 June 2009 figures have been restated to reflect Kingdom Financial
Holdings and Cape Grace group of companies as a 'disposal group' in line with
the disclosures adopted at 31 December 2009.
+-------------------------------------------+-------+----------------------+--------------+
| UNAUDITED CONSOLIDATED STATEMENT OF | | | |
| FINANCIAL POSITION | | | |
| AS AT 30 JUNE 2010 | | | |
+-------------------------------------------+-------+----------------------+--------------+
| | | | Audited |
| | | 30 June | 31 |
| | | 2010 | December |
| | Notes | US$ | 2009 |
| | | | US$ |
+-------------------------------------------+-------+----------------------+--------------+
| ASSETS | | | |
+-------------------------------------------+-------+----------------------+--------------+
| Non-current assets | | | |
+-------------------------------------------+-------+----------------------+--------------+
| Property, plant and equipment | | 80 715 469 | 76 672 807 |
+-------------------------------------------+-------+----------------------+--------------+
| Investment property | | 71 434 | 72 046 |
+-------------------------------------------+-------+----------------------+--------------+
| Biological assets | | 4 322 780 | 4 193 614 |
+-------------------------------------------+-------+----------------------+--------------+
| Other financial assets and investments | | 4 553 468 | 4 554 984 |
+-------------------------------------------+-------+----------------------+--------------+
| Intangible assets - trademarks | | 309 157 | 291 363 |
+-------------------------------------------+-------+----------------------+--------------+
| Balances with Reserve Bank of Zimbabwe | | 12 861 885 | 12 541 825 |
+-------------------------------------------+-------+----------------------+--------------+
| Deferred tax | | 796 329 | - |
+-------------------------------------------+-------+----------------------+--------------+
| Total non-current assets | | 103 630 522 | 98 326 639 |
+-------------------------------------------+-------+----------------------+--------------+
| Current assets | | | |
+-------------------------------------------+-------+----------------------+--------------+
| Inventories | | 26 856 910 | 17 617 464 |
+-------------------------------------------+-------+----------------------+--------------+
| Trade and other receivables | | 8 775 124 | 7 485 896 |
+-------------------------------------------+-------+----------------------+--------------+
| Other financial assets | | 770 755 | 24 198 |
+-------------------------------------------+-------+----------------------+--------------+
| Cash and bank balances | | 5 618 099 | 2 536 106 |
+-------------------------------------------+-------+----------------------+--------------+
| | | 42 020 888 | 27 663 664 |
+-------------------------------------------+-------+----------------------+--------------+
| Assets classified as held for sale or | 3 | 171 557 722 | 145 438 959 |
| distribution to owners | | | |
+-------------------------------------------+-------+----------------------+--------------+
| Total current assets | | 213 578 610 | 173 102 623 |
+-------------------------------------------+-------+----------------------+--------------+
| | | | |
| Total assets | | 317 209 132 | 271 429 262 |
+-------------------------------------------+-------+----------------------+--------------+
| | | | |
| EQUITY AND LIABILITIES | | | |
+-------------------------------------------+-------+----------------------+--------------+
| Capital and reserves | | | |
+-------------------------------------------+-------+----------------------+--------------+
| Share capital | | 1 | 1 |
+-------------------------------------------+-------+----------------------+--------------+
| Non-distributable reserves | | 106 315 270 | 107 160 978 |
+-------------------------------------------+-------+----------------------+--------------+
| Accumulated loss | | (21 993 037) | (22 418 679) |
+-------------------------------------------+-------+----------------------+--------------+
| Capital and reserves relating to assets | 3 | 51 338 124 | 51 658 125 |
| classified as held for sale or | | | |
| distribution to owners | | | |
+-------------------------------------------+-------+----------------------+--------------+
| Equity attributable to equity holders of | | 135 660 358 | 136 400 425 |
| the parent | | | |
+-------------------------------------------+-------+----------------------+--------------+
| Non-controlling interests | | 1 075 585 | 1 325 782 |
+-------------------------------------------+-------+----------------------+--------------+
| Total equity | | 136 735 943 | 137 726 207 |
+-------------------------------------------+-------+----------------------+--------------+
| | | | |
| Non-current liabilities | | | |
+-------------------------------------------+-------+----------------------+--------------+
| Borrowings | | 845 173 | 845 173 |
+-------------------------------------------+-------+----------------------+--------------+
| Deferred tax | | 13 769 769 | 13 941 913 |
+-------------------------------------------+-------+----------------------+--------------+
| Total non-current liabilities | | 14 614 942 | 14 787 086 |
+-------------------------------------------+-------+----------------------+--------------+
| | | | |
| Current liabilities | | | |
+-------------------------------------------+-------+----------------------+--------------+
| Trade and other payables | | 22 603 323 | 22 888 135 |
+-------------------------------------------+-------+----------------------+--------------+
| Other financial liabilities | | 432 171 | 414 152 |
+-------------------------------------------+-------+----------------------+--------------+
| Short term borrowings | | 27 021 302 | 6 985 213 |
+-------------------------------------------+-------+----------------------+--------------+
| | | 50 056 796 | 30 287 500 |
+-------------------------------------------+-------+----------------------+--------------+
| Liabilities relating to assets classified | 3 | 115 801 451 | 88 628 469 |
| as held for sale or distribution to | | | |
| owners | | | |
+-------------------------------------------+-------+----------------------+--------------+
| Total current liabilities | | 165 858 247 | 118 915 969 |
+-------------------------------------------+-------+----------------------+--------------+
| | | | |
| Total liabilities | | 180 473 189 | 133 703 055 |
+-------------------------------------------+-------+----------------------+--------------+
| | | 317 209 132 | |
| Total equity and liabilities | | | 271 429 262 |
+-------------------------------------------+-------+----------------------+--------------+
+-----------------+---------+---------------+--------------+------------+--------------+-------------+-------------+
| UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
| FOR THE HALF YEAR ENDED 30 JUNE 2010 |
+------------------------------------------------------------------------------------------------------------------+
| | | Non | | Disposal | Attributable | Non | |
| | Share | distributable | Accumulated | group | to owners of | controlling | |
| | capital | reserves | loss | capital | parent | interests | Total |
| | | | | and | | | |
| | | | | reserves | | | |
+-----------------+---------+---------------+--------------+------------+--------------+-------------+-------------+
| | US$ | US$ | US$ | US$ | | US$ | US$ |
+-----------------+---------+---------------+--------------+------------+--------------+-------------+-------------+
| Balance at the | | | | | | | |
| beginning of | 1 | 107 160 978 | (22 418 679) | 51 658 125 | 136 400 425 | 1 325 782 | 137 726 207 |
| the | | | | | | | |
| period-audited | | | | | | | |
+-----------------+---------+---------------+--------------+------------+--------------+-------------+-------------+
| Loss for the | - | - | (1 665 829) | 2 240 798 | 574 969 | (250 197) | 324 772 |
| period | | | | | | | |
+-----------------+---------+---------------+--------------+------------+--------------+-------------+-------------+
| Other | | | | | | | |
| comprehensive | - | (845 708) | - | (469 328) | (1 315 036) | - | (1 315 036) |
| income for the | | | | | | | |
| period | | | | | | | |
+-----------------+---------+---------------+--------------+------------+--------------+-------------+-------------+
| Transfers in | | | | | | | |
| respect of | - | - | 2 091 471 | (2 | - | - | - |
| assets | | | | 091 | | | |
| classified as | | | | 471)) | | | |
| held for sale | | | | | | | |
| or distribution | | | | | | | |
+-----------------+---------+---------------+--------------+------------+--------------+-------------+-------------+
| Balance at the | 1 | 106 315 270 | (21 993 037) | 51 338 124 | 135 660 358 | 1 075 585 | 136 735 943 |
| end of the | | | | | | | |
| period | | | | | | | |
+-----------------+---------+---------------+--------------+------------+--------------+-------------+-------------+
+----------------------------------------+----------------+-------------+----------+
| UNAUDITED CONSOLIDATED STATEMENT OF | | |
| CASH FLOWS | | |
+----------------------------------------+----------------+------------------------+
| FOR THE HALF YEAR ENDED 30 JUNE 2010 | | |
+----------------------------------------+----------------+------------------------+
| | | |
| | 30 June 2010 | 30 June 2009 |
| | US$ | US$ |
| | | |
+----------------------------------------+----------------+------------------------+
| Continuing and discontinued operations | | |
+----------------------------------------+----------------+------------------------+
| Cash flow from operating activities | | |
+----------------------------------------+----------------+------------------------+
| Profit (loss) before tax from | (138 174) | 701 821 |
| continuing and discontinued operations | | |
+----------------------------------------+----------------+------------------------+
| Adjustments for: | | |
+----------------------------------------+----------------+------------------------+
| - Depreciation expense and impairment | 1 282 305 | 5 337 940 |
+----------------------------------------+----------------+------------------------+
| - Net interest | 652 923 | (494 146) |
+----------------------------------------+----------------+------------------------+
| - Net exchange gains and translation | 4 375 | 189 151 |
| adjustments | | |
+----------------------------------------+----------------+------------------------+
| - Fair value adjustments | (251 862) | 1 600 311 |
+----------------------------------------+----------------+------------------------+
| - Share of profits of associates | (201 913) | (359 351) |
+----------------------------------------+----------------+------------------------+
| - Loss on disposal of property, plant | 863 | (9 292) |
| and equipment | | |
+----------------------------------------+----------------+------------------------+
| Operating cash flow before working | 1 624 865 | 6 966 434 |
| capital changes | | |
+----------------------------------------+----------------+------------------------+
| Increase in inventories | (9 281 083) | (10 900 578) |
+----------------------------------------+----------------+------------------------+
| Increase in trade and other | (25 226 782) | (25 128 799) |
| receivables | | |
+----------------------------------------+----------------+------------------------+
| Increase in trade and other payables | 27 569 519 | 26 922 750 |
| and financial liabilities | | |
+----------------------------------------+----------------+------------------------+
| Cash used in operations | (5 313 481) | (2 140 193) |
+----------------------------------------+----------------+------------------------+
| Income taxes paid | (8 754) | (61 462) |
+----------------------------------------+----------------+------------------------+
| Net cash used in operating activities | (5 332 235) | (2 201 655) |
+----------------------------------------+----------------+------------------------+
| | | |
| Cash flows from investing activities | | |
+----------------------------------------+----------------+------------------------+
| Payment for property, plant and | (2 036 276) | - |
| equipment - expansion | | |
+----------------------------------------+----------------+------------------------+
| Payment for property, plant and | (606 782) | (1 476 935) |
| equipment - replacement | | |
+----------------------------------------+----------------+------------------------+
| Proceeds from disposal of property, | 15 601 | 17 826 |
| plant and equipment | | |
+----------------------------------------+----------------+------------------------+
| Net movement in service assets | 16 457 | (700) | |
+----------------------------------------+----------------+-------------+----------+
| Proceeds from sale of investments | - | 950 000 | |
+----------------------------------------+----------------+-------------+----------+
| Expenditure on biological assets | (164 946) | (88 499) | |
+----------------------------------------+----------------+-------------+----------+
| Purchase of intangible assets | (17 795) | (4 563) | |
+----------------------------------------+----------------+-------------+----------+
| Interest received | 375 414 | 306 411 | |
+----------------------------------------+----------------+-------------+----------+
| Net cash used in investing activities | (2 418 327) | (296 460) | |
+----------------------------------------+----------------+-------------+----------+
| | | | |
+----------------------------------------+----------------+-------------+----------+
| Cash flows from financing activities | | | |
+----------------------------------------+----------------+-------------+----------+
| Proceeds from interest bearing | 20 140 554 | 6 085 313 | |
| borrowings | | | |
+----------------------------------------+----------------+-------------+----------+
| Repayments of interest bearing | (83 055) | (833 883) | |
| borrowings | | | |
+----------------------------------------+----------------+-------------+----------+
| Interest paid | (1 857 885) | (169 418) | |
+----------------------------------------+----------------+-------------+----------+
| Net cash generated from financing | 18 199 614 | 5 082 012 | |
| activities | | | |
+----------------------------------------+----------------+-------------+----------+
| | | | |
| Net increase in cash and bank balances | 10 459 052 | 2 583 897 | |
+----------------------------------------+----------------+-------------+----------+
| Cash and bank balances at the | 25 508 890 | 51 633 324 | |
| beginning of the period | | | |
+----------------------------------------+----------------+-------------+----------+
| Net effect of exchange rate changes on | 3 344 | (369 771) | |
| cash and bank balances | | | |
+----------------------------------------+----------------+-------------+----------+
| Translation of foreign entities | (1 346 939) | (2 974 914) | |
+----------------------------------------+----------------+-------------+----------+
| Cash and bank balances at the end of | 34 624 347 | 50 872 536 | |
| the period | | | |
+----------------------------------------+----------------+-------------+----------+
1. Accounting policies
Accounting policies and methods of computation used are consistent in all
material respects with those used in prior year, except for the exclusion from
the operating segment results of non-controllable management fees by head
office.
2. Profit for the period from disposal group
Demerger of Kingdom Financial Holdings Limited (KFHL) from the Group
Discussions are underway to resolve this issue. KFHL was disclosed as an asset
held for distribution to owners at 31 December 2009. This disclosure has been
maintained.
Liquidation of Cotton Printers (Private) Limited
Cotton Printers (Private) Limited encountered significant viability problems in
2009 and is currently in liquidation. As a result Cotton Printers (Private)
Limited did not trade during the period to 30 June 2010 as it is now a
discontinued operation.
Cape Grace Hotel operations in South Africa
These operations were disclosed as a disposal group at 31 December 2009
following receipt of a notice from Mentor Africa Limited in November 2008 to
exercise an option agreement for the purchase of the Group's interest in the
Cape Grace Hotel in line with an option agreement that had been entered into in
March 2008. However, certain conditions precedent contained in the option
agreement had not been fulfilled by 30 June 2010. The conditions precedent
include any necessary Reserve Bank of Zimbabwe and Zimbabwe Stock Exchange
approvals. These operations have been maintained as a non current asset
classified as held for sale.
+--------------------------------------------+-------------+--------------+
| | | |
| | 30 | 30 June |
| | June | 2009 |
| | 2010 | US$ |
| | US$ | |
+--------------------------------------------+-------------+--------------+
| Revenue | 11 007 843 | 7 702 6930 |
+--------------------------------------------+-------------+--------------+
| Net interest | (49 953) | 60 476 |
+--------------------------------------------+-------------+--------------+
| Other gains | 368 885 | 5 739 137 |
+--------------------------------------------+-------------+--------------+
| | 11 326 775 | 13 441 830 |
+--------------------------------------------+-------------+--------------+
| Expenses | (8 309 239) | (12 265 953) |
+--------------------------------------------+-------------+--------------+
| Profit before tax | 3 017 536 | 1 115 401 |
+--------------------------------------------+-------------+--------------+
| Attributable income tax expense | (776 738) | (102 988) |
+--------------------------------------------+-------------+--------------+
| Profit for the year from disposal group | 2 240 798 | 1 012 413 |
+--------------------------------------------+-------------+--------------+
| Other comprehensive income | | |
+--------------------------------------------+-------------+--------------+
| Exchange difference on translating foreign | (454 778) | 1 655 234 |
| entities | | |
+--------------------------------------------+-------------+--------------+
| Losses on property revaluations | - | (2 248 645) |
+--------------------------------------------+-------------+--------------+
| Available for sale | - | 1 168 827 |
+--------------------------------------------+-------------+--------------+
| Other comprehensive income for the period | (454 778) | 575 416 |
| net of tax | | |
+--------------------------------------------+-------------+--------------+
| Total comprehensive income | 1 786 020 | 1 587 829 |
+--------------------------------------------+-------------+--------------+
| | | |
| Cash flows from discontinued operations | | |
+--------------------------------------------+-------------+--------------+
| Net cash flows from operating activities | 8 133 439 | (303 522) |
+--------------------------------------------+-------------+--------------+
| Net cash flows from investing activities | (784 734) | 275 518 |
+--------------------------------------------+-------------+--------------+
| Net cash flows from financing activities | (38 969) | (765 402) |
+--------------------------------------------+-------------+--------------+
| Net cash flows for the period | 7 309 736 | (793 406) |
+--------------------------------------------+-------------+--------------+
3. Assets classified as held for sale or distribution to owners
+-------------------------------------------+-------------+-------------+
| Comprising: | | Audited |
| | 30 June | 31 |
| | | December |
| | 2010 | 2009 |
| | US$ | US$ |
+-------------------------------------------+-------------+-------------+
| Assets classified as held for sale: | | |
+-------------------------------------------+-------------+-------------+
| Cape Grace Hotel group of companies | 34 337 528 | 36 847 922 |
+-------------------------------------------+-------------+-------------+
| Cotton Printers (Private) Limited | 4 497 374 | 4 497 374 |
+-------------------------------------------+-------------+-------------+
| Assets classified as held for | | |
| distribution to owners: | | |
+-------------------------------------------+-------------+-------------+
| Kingdom Financial Holdings Limited | 132 722 820 | 104 093 663 |
+-------------------------------------------+-------------+-------------+
| Total assets classified as held for sale | 171 557 722 | 145 438 959 |
| or distribution | | |
+-------------------------------------------+-------------+-------------+
| Liabilities relating to assets classified | | |
| as held for sale: | | |
+-------------------------------------------+-------------+-------------+
| Cape Grace Hotel group of companies | 15 206 603 | 16 363 112 |
+-------------------------------------------+-------------+-------------+
| Cotton Printers (Private) Limited | 1 641 364 | 1 641 364 |
+-------------------------------------------+-------------+-------------+
| Liabilities relating to assets classified | | |
| as held for distribution to owners: | | |
+-------------------------------------------+-------------+-------------+
| Kingdom Financial Holdings Limited | 98 953 484 | 70 623 993 |
+-------------------------------------------+-------------+-------------+
| Total liabilities relating to assets | 115 801 451 | 88 628 469 |
| classified as held for sale or | | |
| distribution to owners | | |
+-------------------------------------------+-------------+-------------+
| Net assets classified as held for sale or | 55 756 271 | 56 810 490 |
| for distribution | | |
+-------------------------------------------+-------------+-------------+
| Equity relating to assets classified as | | |
| held for sale: | | |
+-------------------------------------------+-------------+-------------+
| Cape Grace Hotel group of companies | 13 067 647 | 14 231 541 |
+-------------------------------------------+-------------+-------------+
| Cotton Printers (Private) Limited | 2 766 220 | 2 766 220 |
+-------------------------------------------+-------------+-------------+
| Equity relating to assets classified as | | |
| held for distribution to owners: | | |
+-------------------------------------------+-------------+-------------+
| Kingdom Financial Holdings Limited | 35 504 257 | 34 660 364 |
+-------------------------------------------+-------------+-------------+
| Total equity relating to assets | 51 338 124 | 51 658 125 |
| classified as held for sale or | | |
| distribution to owners | | |
+-------------------------------------------+-------------+-------------+
Kingdom Financial Holdings Limited assets include the $22,5 million held at the
Reserve Bank of Zimbabwe.
4. Segment information
+-------------------------------------+--------------+------------+
| | 30 June 2010 | 30 June |
| | | 2009 |
+-------------------------------------+--------------+------------+
| | US$ | US$ |
+-------------------------------------+--------------+------------+
| | | Restated |
+-------------------------------------+--------------+------------+
| Revenue | | |
| Continuing operations: | | |
+-------------------------------------+--------------+------------+
| Supermarkets | 94 377 601 | 30 082 595 |
+-------------------------------------+--------------+------------+
| Agriculture | 9 541 230 | 5 526 698 |
+-------------------------------------+--------------+------------+
| Hotels | 5 298 427 | 3 340 183 |
+-------------------------------------+--------------+------------+
| Stores | 5 048 080 | 1 118 096 |
+-------------------------------------+--------------+------------+
| | 114 265 338 | 40 067 572 |
+-------------------------------------+--------------+------------+
| Disposal group and discontinued | | |
| operation: | | |
+-------------------------------------+--------------+------------+
| Banking | 2 983 854 | 833 963 |
+-------------------------------------+--------------+------------+
| Hotels | 8 023 989 | 6 658 529 |
+-------------------------------------+--------------+------------+
| Textiles | - | 210 201 |
+-------------------------------------+--------------+------------+
| | 11 007 843 | 7 702 693 |
+-------------------------------------+--------------+------------+
| (Loss) profit before tax | | |
| Continued operations: | | |
+-------------------------------------+--------------+------------+
| Supermarkets | (840 666) | (85 861) |
+-------------------------------------+--------------+------------+
| Agriculture | (449 938) | 1 174 265 |
+-------------------------------------+--------------+------------+
| Hotels | (442 491) | (507 610) |
+-------------------------------------+--------------+------------+
| Stores | (2 138 720) | (802 414) |
+-------------------------------------+--------------+------------+
| Corporate | 992 453 | (191 952) |
+-------------------------------------+--------------+------------+
| | (2 879 362) | (413 572) |
+-------------------------------------+--------------+------------+
| Disposal group and discontinued | | |
| operation: | | |
+-------------------------------------+--------------+------------+
| Banking | 1 997 393 | 451 372 |
+-------------------------------------+--------------+------------+
| Hotels | 1 020 143 | 973 215 |
+-------------------------------------+--------------+------------+
| Textiles | - | (309 187) |
+-------------------------------------+--------------+------------+
| | 3 017 536 | 1 012 413 |
+-------------------------------------+--------------+------------+
4. Segment information (continued)
+-------------------------------------+--------------+--------------+
| | | Audited |
| | 30 June | 31 |
| | 2010 | December |
| | US$ | 2009 |
| | | US$ |
+-------------------------------------+--------------+--------------+
| Segment assets | | |
+-------------------------------------+--------------+--------------+
| Continuing operations: | | |
+-------------------------------------+--------------+--------------+
| Supermarkets | 32 648 999 | 23 034 173 |
+-------------------------------------+--------------+--------------+
| Agriculture | 31 480 193 | 31 037 362 |
+-------------------------------------+--------------+--------------+
| Hotels | 28 427 329 | 29 283 147 |
+-------------------------------------+--------------+--------------+
| Stores | 29 773 536 | 25 307 264 |
+-------------------------------------+--------------+--------------+
| Corporate | 23 321 353 | 17 328 357 |
+-------------------------------------+--------------+--------------+
| | 145 651 410 | 125 990 303 |
+-------------------------------------+--------------+--------------+
| Assets classified as held for sale | | |
| or distribution: | | |
+-------------------------------------+--------------+--------------+
| Banking - assets classified as held | 132 722 820 | 104 093 663 |
| for distribution to owners | | |
+-------------------------------------+--------------+--------------+
| Hotels - assets classified as held | 34 337 528 | 36 847 922 |
| for sale (Cape Grace Hotel) | | |
+-------------------------------------+--------------+--------------+
| Textiles - assets classified as | 4 497 374 | 4 497 374 |
| held for sale | | |
+-------------------------------------+--------------+--------------+
| | 171 557 722 | 145 438 959 |
+-------------------------------------+--------------+--------------+
| | 317 209 132 | 271 429 262 |
+-------------------------------------+--------------+--------------+
| Liabilities | | |
+-------------------------------------+--------------+--------------+
| Continuing operations: | | |
+-------------------------------------+--------------+--------------+
| Supermarkets | 28 346 660 | 17 731 046 |
+-------------------------------------+--------------+--------------+
| Agriculture | 12 291 585 | 10 265 874 |
+-------------------------------------+--------------+--------------+
| Hotels | 15 293 743 | 22 304 925 |
+-------------------------------------+--------------+--------------+
| Stores | 12 060 069 | 5 424 688 |
+-------------------------------------+--------------+--------------+
| Corporate | (3 320 319) | (10 651 947) |
+-------------------------------------+--------------+--------------+
| | 64 671 738 | 45 074 586 |
+-------------------------------------+--------------+--------------+
| Classified as held for sale or | | |
| distribution: | | |
+-------------------------------------+--------------+--------------+
| Banking - liabilities classified as | 98 953 484 | 70 623 993 |
| held for distribution to owners | | |
+-------------------------------------+--------------+--------------+
| Hotels - liabilities classified as | 15 206 603 | 16 363 112 |
| held for sale (Cape Grace Hotel) | | |
+-------------------------------------+--------------+--------------+
| Textiles - liabilities classified | 1 641 364 | 1 641 364 |
| as held for sale | | |
+-------------------------------------+--------------+--------------+
| | 115 801 451 | 88 628 469 |
+-------------------------------------+--------------+--------------+
| | 180 473 189 | 133 703 055 |
+-------------------------------------+--------------+--------------+
Intercompany balances and transactions have been eliminated from the Corporate
figures.
5. Supplementary information
+--------------------------------------------+------------+------------+
| | | Audited |
+--------------------------------------------+------------+------------+
| | 30 | 31December |
| | June | 2009 US$ |
| | 2010 | |
| | US$ | |
+--------------------------------------------+------------+------------+
| Capital expenditure for the year | 2 645 658 | 5 386 464 |
+--------------------------------------------+------------+------------+
| Depreciation and impairment | 1 282 305 | 3 577 775 |
+--------------------------------------------+------------+------------+
| Borrowings excluding those relating to | | |
| assets classified as held for sale | 27 866 475 | 11 706 264 |
| or distribution to owners | | |
+--------------------------------------------+------------+------------+
| Capital commitments authorised but not yet | 22 397 238 | 25 042 896 |
| contracted for | | |
+--------------------------------------------+------------+------------+
6. Exchange rates
+-------------------------------------+----------+------------+----------+
| | 30 | 31December | 30 June |
| | June | 2009 US$ | 2009 |
| | 2010 | | US$ |
| | US$ | | |
+-------------------------------------+----------+------------+----------+
| Balance sheet rate | | | |
+-------------------------------------+----------+------------+----------+
| South African Rand | 7.5900 | 7.3967 | 7.8302 |
+-------------------------------------+----------+------------+----------+
| British Pound | 1.5049 | 1.6076 | 1.6523 |
+-------------------------------------+----------+------------+----------+
| Malawi Kwacha | 150.8005 | 140.00 | 140.996 |
+-------------------------------------+----------+------------+----------+
For further information contact Brendan Beaumont or Onias Makamba on
+263-4-252068/78 or email omakamba@meikleslimited.co.zw
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PGUQURUPUGAQ
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