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Meikles

Buisness Editor
MEIKLES Limited Group yesterday said it has concluded a long standing dispute over an estimated $90 million owed to it by the Reserve Bank of Zimbabwe (RBZ).

The debt was accrued in 1998 from transactions related to the group’s dual listing on the Zimbabwe Stock Exchange (ZSE) and the London Stock Exchange.

The dispute came to a head early last year when the diversified group was temporarily suspended from trading on the ZSE on allegations of overstating the RBZ debt with the intention of manipulating its share price on the bourse.

At the time Meikles claimed it was owed $90,8 million including interest from proceeds of foreign investment deposited with the bank under duress, a figure which the government refuted.

The matter spilled into Parliament ahead of the adoption of the RBZ Debt Assumption Bill, where reports indicated that the Meikles debt stood at $25 million in 1998 but shot up to $47 million at the end of 2013 after the inclusion of interest.

The two parties recently struck a compromise on the basis of payment after lengthy negotiations over the issue, said the group in a notice to shareholders.

“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 the company and the government are to be commended on the conclusion of the agreement,” said Meikles.

It described the conclusion in negotiations as a positive step, which should excite the local business community and international investors.

“The group will now be able to grow to its potential and develop its strategies, without specific uncertainties caused in the period when negotiations were still ongoing. All entities of the group had growth plans, which will be to the benefit of all stakeholders,” said Meikles.

The group paid tribute to the government for fostering progress in the matter, which is expected to have a transformative effect on the group’s operations in the next 12 to 18 months.

Meanwhile, Meikles’ turnover has increased 12 percent to $347 million in the nine-month period to December 31, 2015 compared to $310 million recorded in the previous period.

The giant firm also reported a slight growth in overall margins, together with operating income margins of 21,8 percent from 21,2 percent in the prior period.

Expenses expressed as a percentage of turnover dropped to 19 percent from 21 percent while earnings before interest, tax, depreciation and amortisation (EBITDA) increased by $9,5 million relative to the previous period. EBITDA is a measure of a company’s operating performance. It is a way to evaluate a company’s performance without having to factor in financing decisions, accounting decisions or tax environments. EBITDA is calculated by adding back the non-cash expenses of depreciation and amortization to a firm’s operating income.

However, the group observed distortion by its sales mix as a whole, as margins vary over group activities.

Meikles runs hospitality, retail and clothing outlets across the country with leading brands such as Pick n Pay, TM and Meikles Stores.