Meikles posts 430% PAT uptick, as firm becomes retailer

RETAILER Meikles Limited (Meikles) posted a 430% increase in profit-after-tax (PAT) to ZWL$469,46 billion for its financial year ended February 29, 2024, owing to a 102% increase in revenue.

The increase in PAT was from ZWL$88,57 billion, recorded at the end of the 11 months ended February 28, 2023.

Meikles posted revenue of ZWL$10,44 trillion in the period under review, compared to the ZWL$5,17 trillion posted at the end of 11 months ended February 28, 2023.

The firm changed its financial year-end last year, from March to February, making the comparative financial results 11 months instead of 12.

In a statement attached to its financial results for the year ended February 29, 2024, Meikles chairperson John Moxon said the financial year under review was characterised by currency volatility.

“Profit after tax increased to ZWL$469,5 billion from ZWL$88,6 billion the previous year,” Moxon said.

“The effective tax rate of 45,5% was much higher than the statutory tax rate of 24,7% for the year due mainly to the disallowed intermediated money transfer tax of ZWL$114 billion.”

From the group revenue, Meikles TM Pick n Pay supermarket segment contributed 99,38%, or ZWL$10,38 trillion to the total, essentially making it a retailer.

“Revenue received in foreign currency during the year was below 20% of the total revenue,” Moxon said.

“This fell far short of the average mix of transactions conducted in foreign currency in the economy, which was 80% in USD [United States dollars], due to the uneven enforcement of the in-store exchange rate policy.”

Moxon said the group’s net operating costs increased by 121%, reflecting the impact of the depreciating exchange rate.

“Most prices, including wages and salaries, were pegged in USD and converted to ZWL$ at exchange rates prevailing at settlement. Finance costs increased by 21% to ZWL$27,5 billion. IFRS 16 interest charges accounted for ZWL$23 billion of the total finance costs,” Moxon said.

“The exchange loss arose primarily from the remeasurement of USD-denominated creditors for the supermarket segment at the exchange rate ruling at year-end. Creditors contributed 94% of the gross exchange loss of ZWL$444,3 billion.

“Exchange gains on the remeasurement of bank balances and receivables denominated in foreign currency were ZWL$120,1 billion, and this, combined with the exchange losses, resulted in a net exchange loss of ZWL$324,2 billion.”

He said at the end of the reporting period, the group had strong liquidity levels, including US$13,8 million in cash.

“The current asset ratio was 2,31 times, up from 1,74 times the previous year,” Moxon added.

Total assets were recorded at ZWL$2,19 trillion during the period under review, compared to the figure reported at the end of the 11 months ended February 28, 2023, which was, ZWL$1,43 trillion.

This was owing to increases in inventories, cash and bank balances and other financial assets.

“The group focuses on adapting to evolving economic conditions, including the new currency, the Zimbabwe Gold. The group will continue with the planned development projects, primarily in the supermarket and properties segments,” Moxon said.-newsdaay