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MEIKLES LD - Unaudited results for the six months ended 30 Sept 2012

Friday, November 23, 2012 2:00 AM


MEIKLES LIMITED

UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012

 
CHAIRMAN'S STATEMENT
 
GROUP REVIEW
 

Shareholders are advised that the Group made a profit before taxation in the first six months under review of $1.02 million. This profit compares with a loss for the first six months in the previous period of $7.04 million, an improvement of $8.06 million.

The profit after taxation 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 6 months of the previous year.

The momentum of improvement in the current financial year will accelerate into the second half and October 2012 has already demonstrated a positive trend.

 
Shareholders were advised at the Annual General Meeting held on 15 August 2012
that there was an error in TM Supermarkets (Pvt) Limited financials dating back
to the period ended 31 March 2011. Shareholders were correctly advised that
this error would have no impact on the results for the year ended 31 March 2012
and the current financial year. TM Supermarkets and the Group results for the
period ended 31 March 2011 have been restated to take account of the prior
period error.
 
Shareholders were advised, in the 31 March 2012 Chairman's statement, that the
results for the year ended 31 March 2012 were determined on a very conservative
basis with full provision for known and anticipated costs that may have an
impact on the Group financials. The Group continues to determine its results on
a very conservative basis and in the current financial year no further
provision has been necessary, but neither have any potential savings from the
previous period been added back to profit.
 

Your board has continued to pursue the policy for Group funding as was set out in the previous Chairman's statement with one exception. In the previous Chairman's statement Tanganda was expected to be recapitalised by September 2012. 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.

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. In addition, any
new partner in Tanganda will bring a long term involvement into the Company and
we believe that it is appropriate to form such a relationship when the
prevailing uncertainties have settled. In the meantime capital development will
be funded from term funding from external lenders in compliance with group
policy.
 
The refurbishment program in TM Supermarkets will accelerate markedly in the
new financial year fuelled by the resounding success of the launch of Kamfinsa
and the anticipated success of the Westgate, Chinhoyi and Hwange developments
which are underway in the current financial year.  Forward planning suggests
that TM Supermarkets will require further funding to achieve these objectives.
This requirement is being addressed by your board in accordance with the Group
funding policy.
 
Negotiations are in progress for major developments in our hotels division.
Shareholders are aware of the proposed development in Lusaka which has been
delayed for various reasons but we believe that this development may commence
in 2013. In addition we are focused on opportunities in Victoria Falls, Harare
and within the region. In this context we are in discussion with a large
international hotel group, who will partner us in these new developments.
Shareholders will be advised of further progress at the opportune time.
 
Shareholders have been advised that we have been making continuous efforts to
access our funds on deposit with the Reserve Bank of Zimbabwe which now amount
to approximately $40 million.   We are aware that the Reserve Bank intends to
accommodate us and we await confirmation of what form the refund of this sum
will take and the timing thereof.  Access to these funds will complete our
Group funding objectives as previously disclosed to shareholders.
 
Meikles Resources
 

Shareholders will recall that reference was made in the Chairman's Review in the Annual report for the year ended 31 March 2012 regarding a new but undisclosed business opportunity that would require substantial funding if successful.

Shareholders are now advised of developments relating to the progress of a new subsidiary in the Group called Meikles Resources (Private) Limited.

This indigenous company, which is presently wholly owned by Meikles Limited, has an objective to focus on the development of mining and resource opportunities in Zimbabwe.

 
Meikles Resources will seek to combine local and international skills and
financial resources within the framework of its indigenous status. Meikles
Resources will comply with accepted international mining standards and ethics.
This entity will capitalise on the long standing reputation and history of the
Group in Zimbabwe and will apply the Group's customary high standards to the
implementation and operation of this division for the benefit of all
stakeholders.
 
Meikles Resources has commenced exploratory mining operations on one
opportunity and will start full mining operations as soon as the full extent of
the resource has been established. Shareholders will be provided with details
as these operations progress. In addition, discussions will take place on
further resource opportunities.
 
Shareholders are advised that profits from Meikles Resources are expected to
exceed those anticipated for the entire Group as presently constituted over the
coming years and will therefore be of material significance.
 
Management 
 

The Group has three new subsidiary managing directors and a fourth in an acting capacity, all of whom have been appointed in the last eighteen months. Your board is confident that the new incumbents will contribute unique and fresh skills into a developing and exciting Group.

 
The substantial expansion in agricultural, hotels and mining within Zimbabwe
and the Region, makes it imperative that the Group positions itself to
effectively navigate planned growth and to harness the full potential of the
abundant opportunities that lie ahead.  In this context the Group intends to
secure a suitable resource adequately equipped to assist in this pursuit. 
 
The Group intends to bolster the structure of its retail and other consumer
activities with the appointment of an experienced retail and consumer business
executive. This will add considerable support to the two retail managing
directors and will complement the input received from our partners in these
entities. This appointment will serve to exploit the energies and synergies
contained within the retail footprint where we have a substantial presence in
Zimbabwe and which offers opportunity for aggressive growth using internal
efficiencies more effectively.
 

TM Supermarkets are pleased to announce the appointment of David Mills to the position of Managing Director with effect from Wednesday, 21 November 2012. Dave Mills is well known in the industry and we welcome him back to TM Supermarkets and the Group.

 
OPERATIONS
 
TangandaTea Company
 
The Tanganda Estates consist of five tea estates producing on 2 600 hectares,
four large tea factories, an office complex in Mutare which manufactures packed
tea for local and regional consumption and several schools and clinics.
 
An extensive diversification program is under way and will be completed in 2014
and involves the establishment of 700 hectares of macadamias, 500 hectares of
avocados and 300 hectares of new coffee plantations. Tanganda developed
104 hectares and 64 hectares of avocados and macadamia respectively during the
first half of the year.  This brings the total hectarage under new plantations
to 139 hectares of avocados, 209 hectares of macadamia and 123 hectares of
coffee.  This expansion program is the largest of its type ever implemented in
a relatively short period in Zimbabwe. 
 
In the current financial year, the winter rainfall has been 56% on average less
than that recorded in the previous year and adverse relative to normal
expectations. In addition to low rainfall we have had to contend with frost
damage. The new summer season has begun positively and we shall produce a good
crop for the year as a whole, if the rains continue.
 

Our quality initiatives are paying off in terms of improved quality teas and prices.

We continue to make every effort to reduce overheads which had risen to unsustainable levels in the years post dollarisation. We are pleased to have secured reliable electricity supplies from ZESA and this has reduced the operating costs negatively impacted by generator power.

We have substantial forward commitments on the estates for further mechanization including tractors, a bulldozer, trucks and irrigation equipment.

We plan a second water bottling plant to enable us to meet a very significant growth in demand for Tingamira water bottled at our natural spring in Chipinge.

We intend to update our Mutare factory with new tea packaging machinery and a new fleet of delivery trucks to enhance our distribution of packed tea.

 
The Hotel Group
 

The exciting and extensive renovations at Meikles Hotel will be completed early next year. We will see the launch of refashioned décor, state of the art bathrooms, new lifts, air conditioning, and a prestigious Club facility together with advanced guest IT services to attract the business travellers.

Our room occupancies, based on available rooms for the first half of the year were better than those for the first six months of the previous year. In October 2012, occupancies based on available rooms were 64% which compares favourably to what we believe the general market is achieving.

Our average room rates and REVPAR are believed to be better than the market.

We continue to be pleased by the superior standard of our food and beverage offerings.

Renovation of the Victoria Falls Hotel has commenced and is to be completed
during the course of 2013. In the meantime room occupancy in the first half of
the year shows an improvement over the previous year and October 2012 posted
occupancy of 70% and the positive trend continues. The average room rate shows
a useful improvement as does REVPAR. Our room occupancies are believed to be
well above average in the market as is our average room rate and REVPAR. The
food and beverage offerings are substantially improved this year.
 
Properties
 

Your board is aware that it has substantial financial interest in dominant properties throughout the Country. A focus is to be directed on how best to utilize these properties for both own and commercial use, but with an objective of enhancing shareholder value.

 
Mentor Africa
 

In the current period, the Group took up a 35% shareholding in Mentor. The Mentor results will be accounted for in the second half of the current financial year and thereafter will be accounted for in every reporting period.

 
In the context of Mentor, the Group is substantially involved in the affairs of
the Cape Grace Hotel which is part of the Group together with other Mentor
assets. Shareholders will be pleased to know that full cooperation between our
hotels and Cape Grace continues and that the Cape Grace is performing well.
There is substantial expectation in the performance and value attributed to
other Mentor assets and therefore to the Group.
 
The Mentor/Cape Grace transaction yielded a financial profit of $1.1 million
which has been recognised in the statement of comprehensive income. This profit
is net of intangible assets, in the form of goodwill and depreciation, with a
combined value of $9.9 million.
 
TM Supermarkets
 

TM Supermarkets will focus on improving its merchandise mix to provide an improved offering to the public at competitive pricing but at the same time focusing on an improvement in gross profit percentage which although better than the previous year is still below our expectation. The larger and refurbished branches with their larger range of merchandise are achieving useful gross profits. There will be a further focus on improvement in product identification and sourcing.

 
Management has identified areas of potential cost reduction, which will make a
significant difference to the bottom line going forward. Cost control is an
ongoing focus and this will accelerate in future months as will a focus on
the
reduction in shrinkage.
 
We have disclosed our objective to refurbish our supermarkets. This objective
will be implemented on a National basis over as short a period as is practical.
We also anticipate that there will be new supermarkets opened over a planned
period.
 
TM Department Stores
 
Your board believes that there will be greater spending power in urban areas as
the disposable income of Zimbabwean consumers improves. This is a fast growing
trend in many parts of Africa according to various reports where the
opportunity is described as a potential, untouched, gold mine. This will likely
occur at a slower pace, in Zimbabwe, than the rest of Africa, in the short
term.   Once the potential is harnessed our retail dominance will enhance
shareholder value.
 

In the mean time we are focusing our efforts on rationalizing our footprint with reduced risk in the short term in the form of lower stocks and trade debtors with an improved turnaround in both.

In addition, overheads are being effectively managed downwards. We are anticipating an improved performance for the year as a whole, relative to the previous year with reduced risk to shareholders.

It is possible that the stores will seek a retail partner when the environment is conducive.

 
Directorate
 

In September 2012, the Board was advised of the sad passing of Mr Michael Wilson, a former Director of the Company. The Board would like to extend its sincere condolences to his family.

 
JRT Moxon
Chairman
21 November 2012
 

UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012

                                                                              
                                                                              
                                                           6 months   6 months
                                                                 to         to
                                                                 30         30
                                                          September  September
                                                               2012       2011
                                                            US$ 000    US$ 000
                                                                              
CONTINUING OPERATIONS                                                         
                                                                              
Revenue                                                     189,491    165,591
                                                                              
Cost of sales*                                            (149,490)  (130,843)
                                                                              
Gross profit                                                 40,001     34,748
                                                                              
                                                                              
                                                                              
Other income                                                  2,292      2,004
                                                                              
Employee costs                                             (20,204)   (20,363)
                                                                              
Occupancy costs                                             (8,975)    (7,625)
                                                                              
Other operating costs*                                     (13,103)   (11,717)
                                                                              
Operating loss                                                   11    (2,953)
                                                                              
Investment revenue                                            1,130      1,220
                                                                              
Finance costs*                                              (3,241)    (3,562)
                                                                              
Net exchange losses                                           (183)    (1,745)
                                                                              
Profit on disposal of subsidiaries                            1,173        
 -
                                                                              
Fair value adjustments                                        2,126          -
                                                                              
Profit / (loss) before tax                                    1,016    (7,040)
                                                                              
Income tax                                                    (249)      1,463
                                                                              
Profit /(loss) for the period from continuing operations        767    (5,577)
                                                                              
                                                                              
                                                                              
Profit for the period from discontinued operations                -       

580

                                                                              
PROFIT / (LOSS) FOR THE PERIOD                                  767    (4,997)
                                                                              
                                                                              
                                                                              
Other comprehensive loss                                                      
                                                                              
Exchange differences on translating foreign operations            -    

(2,612)

                                                                              
Other comprehensive loss for the period, net of tax               -    (2,612)
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
TOTAL COMPREHENSIVE PROFIT / (LOSS) FOR THE PERIOD              767    (7,609)
                                                                              
                                                                              
                                                                              
(Loss) / profit attributable to:                                           
  
                                                                              
Owners of the parent                                          (666)    (5,349)
                                                                              
Non-controlling interests                                     1,433        352
                                                                              
                                                                767    (4,997)
                                                                              
Total comprehensive (loss) / profit attributable to:                       
  
                                                                              
Owners of the parent                                          (666)    (7,961)
                                                                              
Non-controlling interests                                     1,433        352
                                                                              
                                                                767    (7,609)
                                                                              
                                                                              
                                                                              
Loss per share (cents)                                                        
                                                                              
Basic and diluted loss from continuing and discontinued                    
  
operations (cents per share)                                                  
                                                             (0.26)     (2.18)
                                                                              
Basic and diluted loss from continuing operations (cents     (0.26)     (2.42)
per share)                                                                    
                                                                              
Basic and diluted headline loss from continuing and                           
discontinued operations (cents per share)                                  
  
                                                             (0.71)     (2.19)
                                                                              
 

* Prior year comparatives have been reclassified to conform to the presentation at 31 March 2012 and 30 September 2012. Refer to note 5 for details.

UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2012
 
                                                           Unaudited    Audited
                                                        30 September   31 March
                                                                2012       2012
                                                             US$ 000    US$ 000
                                                                               
ASSETS                                                                Restated*
                                                                               
Non-current assets                                                             
                                                                               
Property, plant and equipment                                 92,134     86,122
                                                                               
Investment property                                              256         43
                                                                               
Biological assets                                             14,692     11,770
                                                                               
Other financial assets                                        12,855     18,370
                                                                               
Investment in associate                                       27,657          -
                                                                               
Intangible assets - trademarks                                   124       

124

                                                                               
Balances with Reserve Bank of Zimbabwe                        39,562     38,627
                                                                               
Deferred tax                                                   2,176      1,888
                                                                               
Exploration and evaluation costs                               1,640       
  -
                                                                               
Total non-current assets                                     191,096    156,944
                                                                               
                                                                               
                                                                               
Current assets                                                                 
                                                                               
Inventories                                                   41,479     36,546
                                                                               
Trade and other receivables                                   15,638     17,642
                                                                               
Other financial assets                                         1,264      1,085
                                                                               
Cash and bank balances                                         8,388      8,427
                                                                               
                                                              66,769     63,700
                                                                               
Assets held for sale                                               -     37,871
                                                                               
Total current assets                                          66,769    101,571
                                                                               
                                                                               
                                                                               
Total assets                                                 257,865    258,515
                                                                               
                                                                               
                                                                               
EQUITY AND LIABILITIES                                                         
                                                                               
Capital and reserves                                                           
                                                                               
Share capital                                                  2,538      2,538
                                                                               
Share premium                                                  1,316      1,316
                                                                               
Non-distributable reserves                                    12,559      6,233
                                                                               
Retained earnings                                            117,233    104,581
                                                                               
Capital and reserves relating to assets classified as              -     19,644
held for sale                                                                  
                                                                               
Equity attributable to equity holders of the parent          133,646    134,312
                                                                               
Non-controlling interests                                      8,928      7,495
                                                                               
Total equity                                                 142,574    141,807
                                                                               
                                                                               
                                                                               
Non-current liabilities                                                        
                                                                               
Borrowings                                                     8,698      4,786
                                                                               
Deferred tax                                                  12,501     12,124
                                                                               
Total non-current liabilities                                 21,199     16,910
                                                                               
                                                                               
                                                                               
Current liabilities                                                            
                                                                               
Trade and other payables                                      45,666     38,371
                                                                               
Short term borrowings                                         48,426     47,199
                                                                               
                                                              94,092     85,570
                                                                               
Liabilities relating to assets classified as held for              -     14,228
sale                                                                           
                                                                               
Total current liabilities                                     94,092     99,798
                                                                               
                                                                               
                                                                               
Total liabilities                                            115,291    116,708
                                                                               
                                                                               
                                                                               
Total equity and liabilities                                 257,865    258,515
                                                                               
 
 

* Refer to note 4 for details of the restatement.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012

 
                              Share   Share Non-distributable          Disposal
                            capital premium          reserves Retained    group
                                                              earnings  capital
                                                                            and
                                                                       reserves
                                                                               
                            US$ 000 US$ 000           US$ 000  US$ 000  US$ 000
                                                                               
30 September 2012                                                              
                                                                               
Balance at the beginning of   2,538   1,316                    104,581         
the period                                              6,233            19,644
                                                                               
Loss for the period               -       -                 -    (666)        -
                                                                               
Transfer on sale of                                                            
disposal group                    -       -             6,326   13,318 (19,644)
                                                                               
Balance at the end of the                                                      
period                        2,538   1,316            12,559  117,233        -
                                                                               
                                                                               
                                                                               
30 September 2011                                                              
                                                                               
Balance at the beginning of                                                    
the period as previously                                                       
stated                        2,454       -             2,627  111,207   18,083
                                                                               
Prior period adjustment*          -       -                 -  (1,719)        -
                                                                               
Balance at the beginning of                                                    
the period restated           2,454       -             2,627  109,488   18,083
                                                                               
Loss for the period               -       -                 -  (5,929)      580
                                                                               
Other comprehensive income                                                     
for the period                    -       -           (1,236)        -  (1,376)
                                                                               
Transfer on disinvestment                                                      
of non-controlling                                                             
interest in a subsidiary          -       -                 -    (168)        -
                                                                               
Balance at the end of the                                                      
period                        2,454       -             1,391  103,391   17,287
                                                                               
 
 
                                                                    Non        
                                           Attributable  to controlling        
                                           owners of parent   interests   Total
                                                    US$ 000     US$ 000 US$ 000
                                                                               
30 September 2012                                                              
                                                                               
Balance at the beginning of the period              134,312       7,445 141,807
                                                                               
Loss for the period                                   (666)       1,433     767
                                                                               
Transfer on sale of disposal group                        -           -    

-

                                                                               
Balance at the end of the period                    133,646       8,928 142,574
                                                                               
                                                                               
                                                                               
30 September 2011                                                              
                                                                               
Balance at the beginning of the period                                     
   
as previously stated                                134,371         764 135,135
                                                                               
Prior period adjustment*                            (1,719)       (573) (2,292)
                                                                               
Balance at the beginning of the period                                     
   
restated                                            132,652         191 132,843
                                                                               
Loss for the period                                 (5,349)         352 (4,997)
                                                                               
Other comprehensive income for the                                             
period                                              (2,612)           - (2,612)
                                                                               
Transfer on disinvestment of                                                   
non-controlling    interest in a                                               
subsidiary                                            (168)         168       -
                                                                               
Balance at the end of the period                    124,523         711 125,234
                                                                               
 

* Refer to note 4 for details of the restatement.

UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012

 
                                                         30 September  30 September
                                                                 2012          2011
                                                              US$ 000       US$ 000
                                                                                   
CONTINUING AND DISCONTINUED OPERATIONS                                     
Cash flows from operating activities                                               
                                                                                   
Profit / (loss) before tax from continuing and                  1,016      
(6,460)
discontinued operations                                                            
                                                                                   
Adjustments for                                                                    
                                                                                   
- Depreciation expense                                          2,267         1,905
                                                                                   
- Net interest                                                  2,111         2,998
                                                                                   
- Net exchange losses                                             183         1,550
                                                                                   
Profit on disposal of subsidiaries                            (1,173)      
      -
                                                                                   
- Fair value adjustments                                      (2,126)           (1)
                                                                                   
-Loss / (profit) on disposal of property, plant and                40      
   (23)
equipment                                                                          
                                                                                   
Operating cash flow before working capital changes              2,318      
   (31)
                                                                                   
Increase in inventories                                       (5,070)         (626)
                                                                                   
Increase in trade and other receivables                         (405)      

(1,583)

Increase in trade and other payables                           12,408      

6,383

Cash generated from operations                                  9,251      
  4,143
                                                                                   
Income taxes paid                                               (127)          (73)
                                                                                   
Net cash generated from operating activities                    9,124      
  4,070
                                                                                   
                                                                                   
                                                                                   
Cash flows from investing activities                                               
                                                                                   
Payment for property, plant and equipment                     (8,500)      

(3,426)

Proceeds from disposal of property, plant and equipment            69      

1,356

Exploration and evaluation costs                              (1,640)      

-

Net movement in service assets                                  (102)      

(55)

Payment for other investments                                    (90)      

(259)

Plantation development expenditure                              (794)      
  (227)
                                                                                   
Investment income                                                 180           151
                                                                                   
Net cash used in investing activities                        (10,877)      
(2,460)
                                                                                   
                                                                                   
                                                                                   
Cash flows from financing activities                                               
                                                                                   
Proceeds from interest bearing borrowings                       5,138      
  4,537
                                                                                   
Finance costs                                                 (3,241)       (4,252)
                                                                                   
Net cash generated from financing activities                    1,897      
    285
                                                                                   
                                                                                   
                                                                                   
Net increase in cash and bank balances                            144      

1,895

Cash and bank balances at the beginning of the period           8,427      

4,785

Net effect of exchange rate changes on cash and bank            (183)      
    237
balances                                                                           
                                                                                   
Translation of foreign entity                                       -      

(529)

Cash and bank balances at the end of the period                 8,388      
  6,388
                                                                                   
 

NOTES TO THE FINANCIAL STATEMENTS

 
1. Accounting policies
 
The Group's interim condensed consolidated financial statements have been
prepared in accordance with IAS 34 - Interim Financial Reporting.  The Group
adopted IFRS 6 - Exploration and Evaluation of Mineral Resources to account for
exploration and evaluation costs. All other accounting policies and methods of
computation applied in the preparation of these condensed financial statements
are consistent, in all material respects, with those applied in the preparation
of the Group's annual financial statements for the year ended 31 March 2012
with no significant impact arising from new and revised International Financial
Reporting Standards (IFRS).
 
2. Discontinued operations
 

The sale of the Cape Grace Hotel to Mentor was concluded on 1 April 2012 as reported in the annual report for the year ended 31 March 2012. The Cape Grace Hotel results are disclosed as "discontinued operations" in the prior period.

 
2.1  Profit for the period from discontinued operations
                                                              Unaudited   Unaudited
                                                                     30          30
                                                              September   September
                                                                   2012        2011
                                                                US$ 000     US$ 000
                                                                                   
Revenue                                                               -       6,753
                                                                                   
Other gains                                                           -         220
                                                                                   
Total income                                                          -       6,973
                                                                                   
Expenses                                                              -     (6,393)
                                                                                   
Profit before tax                                                     -         580
                                                                                   
Income tax                                                            -           -
                                                                                   
Profit for the period from discontinued operations                                 
(attributable to owners of the parent)                                     
       
                                                                      -         580
                                                                                   
                                                                                   
                                                                                   
Other comprehensive loss                                                           
                                                                                   
Exchange differences on translating foreign entities                  -    

(1,376)

Other comprehensive loss for the period, net of tax                   -    
(1,376)
                                                                                   
                                                                                   
                                                                                   
Total comprehensive loss for the period                               -    
  (796)
                                                                                   
 
Cash flows from discontinued operations                                            
                                                                                   
Net cash flows from operating activities                                -  

145

Net cash flows from investing activities                                -  

(138)

Net cash flows from financing activities                                -  
     78
                                                                                   
Net cash flows                                                          -        85
                                                                                   
 
Assets held for sale
                                                          Unaudited     Audited
                                                       30 September    31 March
                                                               2012        2012
                                                            US$ 000     US$ 000
                                                                               
Assets held for sale                                                           
                                                                               
Cape Grace Hotel group of companies                               -      40,280
                                                                               
Total assets held for sale                                        -      40,280
                                                                               
                                                                               
                                                                               
Liabilities relating to assets held for sale                                   
                                                                               
Cape Grace Hotel group of companies                               -      

20,636

                                                                               
Total liabilities held for sale                                   -      20,636
                                                                               
                                                                               
                                                                               
Net assets held for sale                                          -      19,644
                                                                               
                                                                               
                                                                               
Equity relating to assets held for sale                                        
                                                                               
Cape Grace Hotel group of companies                               -      

19,644

                                                                               
Total equity relating to assets classified as held                -      19,644
for sale                                                                       
                                                                               
 
3. Segment information
                                                                                   Unaudited Unaudited
                                                                                          30        30
                                                                                   September September
                                                                                        2012      2011
                                                                                     US$ 000   US$ 000
                                                                                                      
Revenue                                                                                               
                                                                                                      
Continuing operations                                                                                 
                                                                                                      
Supermarkets                                                                         163,769   136,595
                                                                                                      
Hotels                                                                                 7,710     7,922
                                                                                                      
Agriculture                                                                           10,597     9,126
                                                                                                      
Stores                                                                                 8,558    12,190
                                                                                                      
Intra-group sales                                                                    (1,143)     (242)
                                                                                                      
                                                                                     189,491   165,591
                                                                                                      
Discontinued operations                                                                               
                                                                                                      
Cape Grace Hotel group of companies                                        
               -     6,753
                                                                                                      
                                                                                           -     6,753
                                                                                                      
EBITDA                                                                                                
                                                                                                      
Continuing operations                                                                                 
                                                                                                      
Supermarkets                                                                           5,211     3,460
                                                                                                      
Hotels                                                                                   448        30
                                                                                                      
Agriculture                                                                          (1,810)   (2,488)
                                                                                                      
Stores                                                                                 (568)     (456)
                                                                                                      
Corporate*                                                                           (1,454)   (1,776)
                                                                                                      
                                                                                       1,827   (1,230)
                                                                                                      
Discontinued operations                                                                               
                                                                                                      
Cape Grace Hotel group of companies                                        
               -       351
                                                                                                      
                                                                                           -       351
                                                                                                      

Included in the continuing operations prior period EBITDA figures above are the

following exceptional expenses:                                            
Compensation for loss of office                                            
               -   (1,363)
                                                                                                      
Legal and professional fees                                                                -     (570)
                                                                                                      
Impairment of property, plant and equipment                                
               -      (47)
                                                                                                      
                                                                                           -   (1,980)
                                                                                                      
Excluding these items, the prior period EBITDA figures would have been as  
                          
follows:                                                                                              
                                                                                                      
Continuing operations                                                                                 
                                                                                                      
Supermarkets                                                                           5,211     3,679
                                                                                                      
Hotels                                                                                   448       665
                                                                                                      
Agriculture                                                                          (1,810)   (2,042)
                                                                                                      
Stores                                                                                 (568)     (176)
                                                                                                      
Corporate                                                                            (1,454)   (1,376)
                                                                                                      
                                                                                       1,827       750
                                                                                                      
                                                                                                      
                                                                                                      
                                                                                   Unaudited   Audited
                                                                                30 September  31 March     
                                                                                        2012      2012      
                                                                                     US$ 000   US$ 000
                                                                                                      
Segment assets                                                                                        
                                                                                                      
Continuing operations                                                                                 
                                                                                                      
Supermarkets                                                                          55,760    47,436
                                                                                                      
Hotels                                                                                44,217    29,878
                                                                                                      
Agriculture                                                                           43,111    43,004
                                                                                                      
Stores                                                                                57,835    57,872
                                                                                                      
Corporate*                                                                            56,942    42,454
                                                                                                      
                                                                                     257,865   220,644
                                                                                                      
                                                                                                      
                                                                                                      
Assets classified as held for sale                                                                    
                                                                                                      
Cape Grace Hotel group of companies                                        
               -    37,871
                                                                                                      
                                                                                           -    37,871
                                                                                                      
                                                                                     257,865   258,515
                                                                                                      
Segment liabilities                                                                                   
                                                                                                      
Continuing operations                                                                                 
                                                                                                      
Supermarkets                                                                          37,540    31,725
                                                                                                      
Hotels                                                                                12,385     8,720
                                                                                                      
Agriculture                                                                           24,861    19,538
                                                                                                      
Stores                                                                                47,493    45,317
                                                                                                      
Corporate*                                                                           (6,988)   (2,820)
                                                                                                      
                                                                                     115,291   102,480
                                                                                                      
Liabilities classified as held for sale                                                               
                                                                                                      
Cape Grace Hotel group of companies                                        
               -    14,228
                                                                                                      
                                                                                           -    14,228
                                                                                                      
                                                                                     115,291   116,708
                                                                                                      
*Intercompany transactions and balances have been eliminated from the corporate
amounts. Corporate also includes other non-trading subsidiaries that are not
allocated to a reportable segment.
 
4. Restatement
 
During the period, the Group identified an error in the trading inventory
valuation at TM Supermarkets (Private) Limited, carried forward from the 31
March 2011 financial year. The error had the effect of overstating inventory,
retained earnings, non-controlling interests and deferred tax  liability for
the financial periods ended 31 March 2011 and 31 March 2012.
The effect of this restatement on the Group financial statements is summarised
below.
 
                                            As previously        As 
                                                   stated  restated Restatement          
                                                 31 March  31 March    31 March
                                                     2011      2011        2011
                                                  US$ 000   US$ 000     US$ 000
                                                                               
                                                                               
                                                                               
Effect on statement of financial position                                  
   
                                                                               
Inventory                                          40,713    37,626       3,087
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
Retained earnings                                 111,207   109,488       1,719
                                                                               
Non-controlling interests                             764       191         573
                                                                               
Deferred tax liability                             15,996    15,201         795
                                                                               
                                                                          3,087
                                                                               
                                                                               
                                                                               
Effect on statement of comprehensive                                       
   
income                                                                         
                                                                               
Cost of sales                                   (256,124) (259,211)     (3,087)
                                                                               
Income tax credit                                     793     1,588         795
                                                                               
Decrease in profit for the period from                                  (2,292)
continuing operations                                                          
                                                                               
                                                                               
                                                                               
                                            As previously        As 
                                                   stated  restated Restatement            
                                                 31 March  31 March    31 March
                                                     2012      2012        2012
                                                                               
                                                  US$ 000   US$ 000     US$ 000
                                                                               
Effect on statement of financial position                                  
   
                                                                               
Inventory                                          39,633    36,546       3,087
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
Retained earnings                                 105,750   104,581       1,169
                                                                               
Non-controlling interests                           8,618     7,495       1,123
                                                                               
Deferred tax liability                             12,919    12,124         795
                                                                               
                                                                          3,087
                                                                               
 

The restatement has no impact on the loss for the six months ended 30 September 2011 and for the year ended 31 March 2012.

 
5. Prior period comparatives
 
Selling and distribution expenses of US$1,367,393 previously included in cost
of sales for the period ended 30 September 2011 are now disclosed as part of
other operating costs. Depreciation of US$419,987 previously included in other
operating costs for the period ended 30 September 2011 has been reclassified to
cost of sales.
 
Finance costs of US$691,000 in respect of borrowings used to finance the Stores
debt book has been offset against the interest received on the debt book. The
net interest income is disclosed in other income.
 
6. Other information
 
                                                     30 September  30 September
                                                             2012          2011
                                                          US$ 000       US$ 000
                                                                               
Continuing operations                                                          
                                                                               
Depreciation - property, plant and equipment                2,267         

1,905

                                                                               
Capital commitments authorised by the Directors but        14,221        22,369
not contracted                                                                 
                                                                               
 
 
For further information contact Onias Makamba on omakamba@meikleslimited.co.zw
or +263-4-252068/70.

(Source: PR Newswire )
(Source: Quotemedia)

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