LISTED conglomerate Meikles Africa says it has shelved plans to pursue any additional equity funding for its Tanganda Tea Company as global changes in the tea sector renders it difficult to value the unit.
Report by Nqobile Bhebhe
Tanganda was meant to have been recapitalised by September.
“Despite substantial interest in Tanganda, which interest has grown in recent months, your board has decided not to pursue any additional equity funding in this financial year,” group chairman John Moxon said in a statement accompanying its interim results.
“There appears to be a change in the balance of World supply and demand for tea which will favour the producer. “This advantage will not be limited to the short-term and Tanganda will benefit as a
result. This fact, together with anticipated normal rainfalls for the coming season, will result in a substantial rise in Tanganda’s profitability.”
“These factors make it difficult to value Tanganda at present” said Moxon.”
The group made a profit before taxation in the first six months under review of $1,02 million and the figure compares with a loss for the first six months in the previous period of $7,04 million.
This is an improvement of $8,06 million.
Profit after tax from continuing operations was $767 000, which compares to a loss of $5,58 million in the first six months of the previous year.
Inclusive of the profit from discontinued operations, the profit of $767 000 compares with a loss of $5 million in the first six months of the previous year.
Moxon said further funding would be sought to accelerate refurbishments of TM Supermarkets.
Discussions with the Reserve Bank of Zimbabwe on refunding of close to $40 million are ongoing.