Meikles stores division ailing

Published: 30 November 2017

FINANCIAL results for Meikles Limited published last week show the group's stores division to be ailing. The group, however, had a decent outing during the period, buoyed by the supermarkets, agriculture and hotels divisions.

On Friday, leading retail and hotel group Meikles Limited announced results for the six months ended September 30 showing a $3,3 million profit which is a huge improvement from the $1,4 million loss recorded in the comparable period last year.

The supermarkets, agriculture and hotels segments of the group all performed well during the period under review.

The stores segment, which comprises department stores and wholesaling, however recorded a very poor performance during the period.

The stores segment is registered as Gratermans Stores Limited and trades under three stores namely Barbours, The M Store and Meikles Mega Market. Barbours and The M Store are departmental stores while Meikles Mega Market is a wholesaler.

Total revenue for the group's stores segment dropped to $1,13 million during the period under review from $6,68 million reported in the comparable period last year after revenues from wholesaling plummeted to $89 000 from $4,1 million. The segment posted a loss before tax of $1,8 million compared to a loss of $1,6 million in the previous period.

Group executive chairman John Moxon said the segment's poor performance has been caused by working capital constraints which resulted in the closure of seven outlets during the six months ending September 30.

"Seven outlets were closed during the period under review due to working capital constraints", said Moxon.

Ealier this year, Meikles announced that it was holding back plans to expand the Meikles Mega Market brand citing a "depressed economic environment".

The group is, however, optimistic that the stores segment will improve soon. Moxon said the group has made arrangements to fix the working capital issue adding that the group expects the stores segment to return to profit soon.

"Funding arrangements for working capital requirements have very recently been secured. The division will shortly be in a position to trade in a normal fashion and the turnaround lead period to profit is expected to be relatively short," said Moxon.

The group's other segments all enjoyed decent profits during the period under review.

The supermarkets segment, made up of TM supermarkets trading as TM and PnP, posted earnings before tax of $13,2 million, up 38 percent from the $9,6 million reported last year.

The agriculture segment's earnings before tax grew by 106 percent to $2,98 million from $1,44 million last year. The group's hotels segment had earnings before tax of $2,1 million representing an increase of 84 percent from the comparable period last year.

- fingaz

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