Business Reporter
LISTED concern Meikles Limited expects a solid performance in the coming years when a number of initiatives begin to pay off. Among the initiatives currently underway is the expansion at the group’s tea producer, Tanganda, which will have 800 hectares of macadamias, 500 hectares of avocado pears and 400 hectares of coffee in addition to tea by the end of this season.
Expansion of TM Supermarkets and the Meikles Mega Brands is on course; the group will add eight new stores by January next year while forays into the tea packing business in South Africa are gaining traction.
Buoyed by a 20 percent and 15 percent jump in trading income and sales respectively in the five months to August, Meikles Limited executive chairman Mr John Moxon believes the company is growing its market share in the respective sectors it is invested in.
Star performer in the five months was TM Supermarkets where sales went up 17 percent while interest expenses went down.
“That means our market share is growing,” said Mr Moxon.
“Traffic into TM is increasing; the promotions have been very successful. We are very pleased with TM,” he said.
Trading expenses went up by nine percent mostly at TM Supermarkets while at the other group companies trading expenses went down.
The retail division — stores and Meikles Mega market saw growth in sales.
“On a like for like basis, sales went up by 13 percent but they have been adding numbers of stores. So overall our sales went up by 53 percent because we are expanding very fast,” said Mr Moxon.
“We are going to open eight new shops by January 31 next year and will open a new clothing shop called M Stores,” he said.
The hotels recorded growth in occupancy but Victoria Falls Hotel saw sales declining by 16 percent as result of the new 15 percent VAT levied on foreign visitors, according to Mr Moxon.
Occupancy at Meikles Hotel went up four percent while turnover is up five percent in the five months to August.
Tanganda is well on course for its expansion, Mr Moxon said.
“It will have 800 hectares of macadamias, 500 hectares of avocado pears and 400 hectares of coffee in addition to tea. We are well on course for that. We will be finished by the end of this season,” said Mr Moxon.
Tea production costs have retreated because of mechanisation while packaging costs are expected to decline following the commissioning of new state-of-the art machinery in Mutare.
“Because of mechanisation, the costs of production have reduced but selling prices for tea on the international market have remained very static because there is a surplus of tea in Kenya. When that’s gone through the system we think the prices will start improving,” said Mr Moxon.
In Mutare, state-of-the-art machinery has been installed and is working now for the packaging of tea.
“We will be producing tea less expensively for the consumer. So the consumer will find that when they buy tea next month it will be less expensive and there will be a better range because we will pass on the benefits of lower packing costs to the public,” said Mr Moxon.