Meikles Limited Executive Chairman: Mr J.R.T. Moxon
Shareholders are advised that recent developments in negotiations with Government over sums due to the Group necessitate an update for the benefit of Shareholders and Stakeholders. The Company also considers that it is appropriate to include a trading update for the further benefit of Shareholders and Stakeholders. This update is based on the trading period of nine months to the end of December 2015 and the outcome of recently concluded negotiations with the Government of Zimbabwe.
Shareholders are advised that a basis on which funds are to be recovered has been agreed. The Government has undertaken to repay the outstanding funds in terms of the Reserve Bank of Zimbabwe Debt Assumption Act of July 2015. Negotiators in both Government and the Company are to be commended on the conclusion of the agreement. The local business community should be encouraged by such a progressive interaction between Government and a participant in the private sector. The International community and investors may be well advised to take note of this positive development.
The Group will now be able to grow to its potential and develop its strategies, without the specific uncertainties caused in the period when negotiations were still ongoing. All entities of the Group have growth plans, which will be to the benefit of all Stakeholders. All Stakeholders will learn of these plans as they are exposed in the public domain.
In thanking Government, which we do most sincerely, it must be noted that the reward to all will be to witness the Group's progress in the next twelve to eighteen months, a major benefit to all Stakeholders and to the community at large.
Group turnover for the nine month period to 31 December 2015 of $347 million compares favourably with that of the previous period of $310 million, an increase of 12%.
Overall margins, together with operating income margins at 21.8%, were marginally better than those of the previous period of 21.2%. The sales mix in the Group as a whole does distort this comparison, as margins do vary over Group activities.
Expenses expressed as a percentage of turnover decreased from 21% to 19%.
EBITDA increased by $9.5 million relative to the previous period.
The financial implications of the agreement with Government will be included in our audited results for the full year to 31 March 2016.
BY ORDER OF THE BOARD
8 March 2016