Successful compliance with the new indigenisation law has positioned Meikles Limited group of companies for external capitalisation and resuscitation of temporarily shelved projects, executive chairman John Moxon has said.
After successfully fitting the bill crafted by the Ministry of Youth Development, Indigenisation and Empowerment, business outlook is now brighter.
“The company will now be in a position to raise capital on external markets and to pursue projects that have been held in abeyance pending the granting of this status,” Moxon said in a review accompanying the group’s unaudited results for six months ended September 30.
The group — which includes TM Supermarkets (TM), Thomas Meikles Stores, Tanganda Tea Company and Meikles Hospitality — recorded some progress despite operating under difficult conditions characterised by high borrowing costs and inadequate capitalisation.
Revenue for TM increased by 36,4% to $136,6 million while the Earnings Before Interest Deduction Taxation and Aortisation (EBIDTA) for the six months ended September 30 was $3,5 million.
Moxon said regulatory authorities, with the exception of the Competition and Tariff Commission, have approved of South Africa’s Pick’n’Pay’s investment into TM, “paving the way for Pick’n’Pay to increase its shareholding in TM Supermarkets from 25% to 49%.”
Thomas Meikles Stores’ revenue increased by 114,9% to $12,2 million. This growth was attributed to an increase in credit sales which accounted for 76% sales, up from last year’s 52%.
Tanganda’s focus was mainly on plantation development and diversification into other crops while a new commissioned water bottling plant will see an increase in production. The company recorded an EBIDTA loss of $2,3 million.
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“The cost of production driven by power and wages continues to increase, affecting the viability of tea and driving diversification into other crops,” Moxon said.
The group’s local hotels — under Meikles Hospitality — have witnessed an increase in arrivals with a corresponding increase in revenue by 25% to $7,9 million, up from last year’s $6,4 million.
Following the liquidation of Cotton Printers, the company disposed of that establishment to former workers who organised themselves through a new company, Winds Cotton (Pvt) Ltd, with the guidance of the Ministry of Youth Development, Indigenisation and Empowerment.
“In addition to the disposal of the equipment, the company also extended a lease to former workers at generous lease terms.
It is expected the new owners will resuscitate the fortunes of this venture and in the process help in the revival of the city of Bulawayo,” Moxon said.
