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Meikles Africa Ld (MIK)

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Wednesday 23 November, 2005

Meikles Africa Ld

Interim Results

Meikles Africa Ld
23 November 2005


             UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2005


Financial Highlights-Inflation Adjusted   Financial Highlights-Historical Cost
                                                 
•    Net turnover of $4,213.2 billion,    •    Net turnover of $2,522.1 billion,
     (2004 - $3,499.6 billion)                 (2004 -  $657.1 billion)

•    Operating profit after net           •    Operating profit of $354 billion,
     monetary gain of $531.5 billion,          (2004 - $27.5 billion)
     (2004 - loss of $113.9 billion)           

•    Exchange gain of $279.6 billion,     •    Exchange gain of $835.6 billion, 
     (2004 - exchange loss $73.4 billion)      (2004 - $58.6 billion)

•    Attributable profit of $577          •    Attributable profit of
     billion, (2004 - loss of                  $1,073.3billion, (2004 - 
     $280.9 billion)                           $75.3 billion)

•    Headline earnings per share of       •    Headline profit per share 
     $3,766.58 (2004 - loss of                 of $6,566.5 (2004 - $458.5)
     $1,650.40)                                

•    Interim dividend of $375             •    Interim dividend of $375 
      (2004 - $230)                            (2004 - $50)


Average year on year inflation for the period - 229%
Year on year inflation at 30 th September 2005 - 360%
Movement in foreign exchange rates since 31st March 2005 - 328%
Increase in consumer price index since 31st March 2005 - 205%


COMMENTARY

The six months period under review has seen major fluctuations in the economic
environment. Year on year inflation declined at the start and escalated sharply
towards the end of the period, reaching 360% with an overall average of 229%.
Exchange rate movement has not consistently kept pace with inflation and efforts
to maintain real interest rates have created difficult conditions in which to
sustain viable levels of working capital and investment in the commercial and
industrial sector.  Shortage of foreign currency continues to challenge
businesses.

Focus in our Group has been on maintaining margins, ensuring appropriate stock
replacement and levels of investment in stock, controlling shrinkage in the
retail divisions and managing working capital to avoid high interest costs on
borrowings.  Local borrowings were kept to a minimum resulting in net investment
income of $32.2 billion.

Turnover for the half year to 30 September 2005 was $2,522 billion, an increase
of 284% on the same period in the prior year and against average inflation of
229%.  In the retail sector, competitive pricing resulted in strong demand for
merchandise and ensured a gain in market share.  The hotel division benefited
from the movement in exchange rates. Occupancies were up in the Cape Grace Hotel
and Victoria Falls Hotel but slightly down in Meikles Hotel.

Operating profit for the Group was $354 billion compared to $27.5 billion in the
same period last year, a reflection of improved margins and cost control.

Exchange gains of $835.6 billion and the increase in value of quoted investment
of $115.7 billion are largely the result of the movement in the auction exchange
rate from Z$6 082 to Z$26 000 against the US$.  The introduction in October 2005
of an exchange rate mechanism more aligned to market forces will result in
significant gains in the second half of the year.

OPERATIONS

TM Supermarkets
     
•    Net turnover increased by 303% from $518 billion to $2 086 billion.
•    Operating profit grew from $20.1 billion to $252.8 billion.
•    Shrinkage was controlled.
•    Gross margins were managed to ensure cash availability to replace stock at
     acceptable trading levels.
•    Investment income increased from $13.0 billion to $69.2 billion.
•    Profit after taxation increased from $24.5 billion to $222.5 billion.
•    A number of opportunities to open new branches are being pursued.

Retail Division
     
•    Net turnover increased by 207% from $94.8 billion to $291.5 billion.
•    Shrinkage was controlled and gross margins were managed to ensure cash 
     availability to replace stock.
•    Operating profit grew from $8.0 billion to $82.2 billion.
•    Stock turns remained constant at four times.
•    Finance cost reduced from $18.3 billion to $5.1 billion.

Hotels
     
•    Turnover increased by 226% from $44.1 billion to $144 billion.
•    Operating profit increased from $815 million to $23.1 billion.
•    Operating profit before group charges for the Zimbabwe Hotels increased 
     from $5.3 billion to $15.5 billion.
•    Operating profit before group charges for the Cape Grace Hotel was 
     $15.3 billion compared to a profit of $0,2  billion.

Investments

Meikles Africa's investment in the Mvelaphanda Group has made a useful
contribution to profit.  Further initiatives have been identified and are being
pursued.

Outlook

The economic environment will continue to present challenges. The two retail
operations within Zimbabwe are well placed to adjust to market changes.  The
Zimbabwe Hotels are expected to continue to be net generators of cash and, in
addition, the Victoria Falls Hotel is showing encouraging signs in occupancy
growth.  The Cape Grace Hotel should benefit from positive trends in the second
half of the year, and the movement in exchange rate will significantly enhance
its contribution to group profits. Kingdom Financial Holdings should produce
improved results in the second half of the year.

As the new exchange rate mechanism on the interbank market settles down and
exchange rates move in line with inflation, the Group's foreign assets in terms
of valuation and contribution to profit, will be significant.

INTERIM DIVIDEND ANNOUNCEMENT

On 22nd November 2005 the Board approved an interim dividend Number 72 of $375
per share on 163,656,787 shares payable to members registered in the books of
the Company at the close of business on 9th December 2005.  The transfer books
and Register of Members will be closed from 12th December 2005 to 16th December
2005.  Dividend cheques will be mailed to shareholders on or about 19th December
2005.  The dividends payable to non-resident shareholders will be paid in
accordance with Exchange Control Regulations.  Shareholders' withholding tax
will be deducted where applicable.

By order of the Board
A.P. LANE-MITCHELL
Secretary
22 November 2005.


CONSOLIDATED INCOME STATEMENT
For the six months ended 30 September 2005

                                                                             HISTORICAL COST
                                                                     Unaudited                Unaudited
(all amounts in millions of dollars)                               6 months to              6 months to
                                                                  30 Sept 2005             30 Sept 2004
________________________________________________________________________________________________________

Turnover                                                             2,522,085                  657,081


Cost of sales                                                      (1,726,011)                (492,000)
________________________________________________________________________________________________________

Gross profit                                                           796,074                  165,081


Operating expenses                                                   (458,609)                (141,528)
Other income                                                            16,536                    3,962
________________________________________________________________________________________________________
Operating profit                                                       354,001                   27,515

Investment income                                                       60,751                   14,635
Finance costs                                                         (28,501)                 (33,245)
Net exchange gain                                                      835,626                   58,591
Increase in value of quoted investment                                 115,694                    9,842
Net share of result of associates                                       11,857                   14,733
Loss on sale of investments                                              (504)                        -
________________________________________________________________________________________________________
Profit before taxation                                               1,348,924                   92,071


Taxation                                                             (219,969)                 (10,582)
________________________________________________________________________________________________________

Profit after taxation                                                1,128,955                   81,489

Minority interest                                                     (55,634)                  (6,140)
________________________________________________________________________________________________________

Net profit attributable to shareholders                              1,073,321                   75,349

________________________________________________________________________________________________________

Basic earnings per share ($)                                          6,558.37                   460.41

IIMR Headline earnings per share ($)                                  6,566.51                   458.50


CONSOLIDATED BALANCE SHEET
At 30 September 2005

                                                                            HISTORICAL COST
                                                                      Unaudited                  Audited
(all amounts in millions of dollars)                                         At                       At
                                                                   30 Sept 2005            31 March 2005
________________________________________________________________________________________________________

ASSETS

Non-current assets                                                    1,150,707                  301,048
Current assets                                                        2,094,067                  651,191
________________________________________________________________________________________________________
Total assets                                                          3,244,774                  952,239
________________________________________________________________________________________________________


EQUITY AND LIABILITIES
Capital and reserves                                                  1,645,632                  419,842
Minority interest                                                        22,572                    8,663
Non-current liabilities                                                 511,697                  143,112
Current liabilities                                                   1,064,873                  380,622
________________________________________________________________________________________________________
Total equity and liabilities                                          3,244,774                  952,239
________________________________________________________________________________________________________


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 September 2005

HISTORICAL COST - Unaudited
______________________________________________________________________________________________________________________
                                        Share    Share           Non-      Retained  Attributable Minority      Total
                                      Capital  Premium  Distributable  Earnings and     To Parent Interest     Equity
                                                             Reserves  Shareholders  Shareholders
                                                                       For Dividend
______________________________________________________________________________________________________________________

Balance at 1 April 2005                    16    5,356         16,690       397,780       419,842    8,663    428,505
Profit for the period                       -        -              -     1,073,321     1,073,321   55,634  1,128,955
Translation of foreign entity - Cape        -        -        178,630             -       178,630        -    178,630
Grace Hotel
Share of reserves of associate              -        -        (1,615)             -       (1,615)        -    (1,615)
Dividend for 2005 - final                   -        -              -      (24,546)      (24,546)        -   (24,546)
Interim dividend 2006                       -        -              -             -             - (41,725)   (41,725)
______________________________________________________________________________________________________________________
                                     
Balance at 30 September 2005               16    5,356        193,705     1,446,555     1,645,632   22,572  1,668,204
______________________________________________________________________________________________________________________

Balance at 1 April 2004                    16    5,356         16,853       230,887       253,112    3,330    256,442
Profit for the period                       -        -              -        75,349        75,349    6,140     81,489
Translation of foreign entity - Cape        -        -          1,670             -         1,670        -      1,670
Grace Hotel
Dividend for 2004 - final                   -        -              -       (6,542)       (6,542)        -    (6,542)
______________________________________________________________________________________________________________________
                                           
Balance at 30 September 2004               16    5,356         18,523       299,694       323,589    9,470    333,059
______________________________________________________________________________________________________________________


CONSOLIDATED CASH FLOW STATEMENT

For the six months ended 30 September 2005
                                                                            HISTORICAL COST
                                                                   Unaudited               Unaudited
(all amounts in millions of dollars)                             6 months to             6 months to
                                                                30 Sept 2005            30 Sept 2004
_____________________________________________________________________________________________________

Cash flows from operating activities

Profit before taxation                                             1,348,924                  92,071
Adjustment for:
  Non-operating cash flow                                          (879,732)                (40,396)
  Non-cash items                                                   (106,970)                (20,232)
_____________________________________________________________________________________________________
Operating cash flow before working capital changes                   362,222                  31,443
(Used in) / generated from working capital changes                 (341,550)                  17,136
_____________________________________________________________________________________________________
Operating cash flow                                                   20,672                  48,579
Income tax paid                                                     (21,003)                   (836)
_____________________________________________________________________________________________________
Net cash (used in) / generated from operating                          (331)                  47,743
activities
_____________________________________________________________________________________________________

Net cash used in investing activities                               (93,154)                 (8,906)
_____________________________________________________________________________________________________

Net cash generated from / (used in) financing                         37,114                (35,770)
activities
_____________________________________________________________________________________________________

Net effect of exchange rate changes on cash and cash
equivalents                                                          835,626                  58,591
Translation of foreign entity                                      (105,373)                 (2,940)
_____________________________________________________________________________________________________

Net increase in cash and cash equivalents                            673,882                  58,718

Cash and cash equivalents at 31 March 2005                           376,150                 242,104
_____________________________________________________________________________________________________

Cash and cash equivalents at 30 September 2005                     1,050,032                 300,822
_____________________________________________________________________________________________________



SEGMENT INFORMATION
                                                                            HISTORICAL COST
                                                                   Unaudited               Unaudited
(all amounts in millions of dollars)                             6 months to             6 months to
                                                                30 Sept 2005            30 Sept 2004
_____________________________________________________________________________________________________

Turnover
Hotels                                                               144,032                  44,117
Supermarkets                                                       2,086,578                 518,079
Retail                                                               291,475                  94,885
_____________________________________________________________________________________________________
                                                                   2,522,085                 657,081
_____________________________________________________________________________________________________

Operating (loss)/ profit after net monetary gain
Hotels                                                                23,135                     815
Supermarkets                                                         252,775                  20,119
Retail                                                                82,173                   8,023
Corporate and other                                                  (4,082)                 (1,442)
_____________________________________________________________________________________________________
                                                                     354,001                  27,515
_____________________________________________________________________________________________________

Total assets
Hotels                                                               713,611                 145,980
Supermarkets                                                       1,007,040                 161,309
Retail                                                               359,811                 123,806
Corporate and other                                                1,164,312                 270,755
_____________________________________________________________________________________________________
                                                                   3,244,774                 701,850
_____________________________________________________________________________________________________


SUPPLEMENTARY INFORMATION
_____________________________________________________________________________________________________

Capital expenditure                                                   38,498                    6,594
Depreciation                                                           7,392                    4,263

Capital commitments
Authorised but not yet contracted for                                 75,801                   12,742


CONSOLIDATED INCOME STATEMENT
For the six months ended 30 September 2005

                                                                               INFLATION ADJUSTED
                                                                      Unaudited                Unaudited
(all amounts in millions of dollars)                                6 months to              6 months to
                                                                   30 Sept 2005             30 Sept 2004
                                                                                                Restated
_________________________________________________________________________________________________________


Turnover                                                              4,213,191                3,499,597


Cost of sales                                                       (3,496,302)              (3,016,744)
_________________________________________________________________________________________________________

Gross profit                                                            716,889                  482,853


Operating expenses                                                    (791,146)                (798,639)
Other income                                                             46,876                   20,849
_________________________________________________________________________________________________________
Operating loss                                                         (27,381)                (294,937)


Net monetary gain                                                       558,918                  180,949
_________________________________________________________________________________________________________
Operating profit / (loss) after net monetary gain                       531,537                (113,988)



Investment income                                                        94,957                   78,344
Finance costs                                                          (49,844)                (183,157)
Net exchange gain / (loss)                                              279,616                 (73,378)
Increase / (decrease) in value of quoted investment                      58,120                  (4,907)
Impairment of other investments                                        (26,877)                 (40,586)
Net share of result of associates                                      (14,757)                   45,304
Loss on sale of investments                                            (22,900)                        -
_________________________________________________________________________________________________________
Profit / (loss) before taxation                                         849,852                (292,368)


Taxation                                                              (205,331)                   24,832
_________________________________________________________________________________________________________
Profit / (loss) after taxation                                          644,521                (267,536)

Minority interest                                                      (67,474)                 (13,345)
_________________________________________________________________________________________________________
Net profit / (loss) attributable to shareholders                        577,047                (280,881)
_________________________________________________________________________________________________________


Basic earnings / (loss) per share ($)                                  3,525.95               (1,716.24)

IIMR Headline earnings / (loss) per share ($)                          3,766.58               (1,650.40)

Net monetary gain

Gross monetary loss                                                  (1,032,557)                (89,832)
Add: historic exchange gains restated                                 1,311,859                 344,159
Transfer to net exchange gains                                          279,616                 (73,378)
_________________________________________________________________________________________________________
Net monetary gain                                                       558,918                 180,949
_________________________________________________________________________________________________________


CONSOLIDATED BALANCE SHEET
At 30 September 2005

                                                                             INFLATION ADJUSTED
                                                                     Unaudited                  Audited
(all amounts in millions of dollars)                                        At                       At
                                                                  30 Sept 2005            31 March 2005
                                                                                               Restated
________________________________________________________________________________________________________


ASSETS

Non-current assets                                                   2,656,538                2,184,106
Current assets                                                       2,310,673                2,046,614
________________________________________________________________________________________________________
Total assets                                                         4,967,211                4,230,720
________________________________________________________________________________________________________


EQUITY AND LIABILITIES
Capital and reserves                                                 2,970,583                2,287,110
Minority interest                                                       97,289                   71,540
Non-current liabilities                                                834,466                  713,685
Current liabilities                                                  1,064,873                1,158,385
________________________________________________________________________________________________________
Total equity and liabilities                                         4,967,211                4,230,720
________________________________________________________________________________________________________


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 September 2005

INFLATION ADJUSTED -Unaudited
_______________________________________________________________________________________________________________________
                                         Share     Share           Non-      Retained  Attributable Minority     Total
(all amounts in millions of dollars)   Capital   Premium  Distributable  Earnings and     To Parent Interest    Equity
                                                               Reserves  Shareholders  Shareholders
                                                                         For Dividend
_______________________________________________________________________________________________________________________

Balance at 1 April 2005                 25,163 1,789,973         88,059       383,915     2,287,110   71,540 2,358,650
Profit for the period                        -         -              -       577,047       577,047   67,474   644,521
Translation of foreign entity - Cape         -         -        186,553             -       186,553        -   186,553
Grace Hotel
Share of reserves of associate               -         -          2,088             -         2,088        -     2,088
Share of prior year adjustment of            -         -              -       (7,504)       (7,504)        -   (7,504)
associate's retained income
Dividend for 2005 - final                    -         -              -      (74,711)      (74,711)        -  (74,711)
Interim Dividend 2006                        -         -              -             -             - (41,725)  (41,725)
_______________________________________________________________________________________________________________________

Balance at 30 September 2005            25,163 1,789,973        276,700       878,747     2,970,583   97,289 3,067,872
_______________________________________________________________________________________________________________________

Balance at 1 April 2004 - restated      25,163 1,789,973        354,336       727,509     2,896,981   96,076 2,993,057
(Loss) / profit for the period -             -         -              -     (280,881)     (280,881)   13,345 (267,536)
restated
Translation of foreign entity - Cape         -         -         37,797             -        37,797        -    37,797
Grace Hotel
Dividend for 2004 - final                    -         -              -      (44,559)      (44,559)        -  (44,559)
_______________________________________________________________________________________________________________________


Balance at 30 September 2004 -          25,163 1,789,973        392,133       402,069     2,609,338  109,421 2,718,759  
restated                                       
_______________________________________________________________________________________________________________________


CONSOLIDATED CASH FLOW STATEMENT

For the six months ended 30 September 2005
                                                                            INFLATION ADJUSTED
                                                                   Unaudited               Unaudited
(all amounts in millions of dollars)                             6 months to             6 months to
                                                                30 Sept 2005            30 Sept 2004
                                                                                            Restated
_____________________________________________________________________________________________________

Cash flows from operating activities

Profit / (loss) before taxation                                      849,852               (292,368)
Adjustment for:
  Non-operating cash flow                                          (309,972)                 132,887
  Non-cash items                                                      23,004                  96,398
_____________________________________________________________________________________________________
Operating cash flow before working capital changes                   562,884                (63,083)
(Used in) / generated from working capital changes                 (548,575)                 271,875
_____________________________________________________________________________________________________
Operating cash flow                                                   14,309                 208,792
Income tax paid                                                    (170,423)                (36,710)
_____________________________________________________________________________________________________
Net cash (used in) / generated from operating                      (156,114)                 172,082
activities
_____________________________________________________________________________________________________

Net cash used in investing activities                              (242,339)                (71,598)
_____________________________________________________________________________________________________

Net cash generated from / (used in) financing                        166,254               (356,377)
activities

Net effect of exchange rate changes on cash and cash
equivalents                                                          279,616                (73,378)
Translation of foreign entity                                      (142,159)                  64,311
_____________________________________________________________________________________________________

Net decrease in cash and cash equivalents                           (94,742)               (264,960)

Cash and cash equivalents at 31 March 2005                         1,144,774               1,648,280
_____________________________________________________________________________________________________

Cash and cash equivalents at 30 September 2005                     1,050,032               1,383,320
_____________________________________________________________________________________________________


SEGMENT INFORMATION

                                                                                INFLATION ADJUSTED
                                                                   Unaudited              Unaudited
(all amounts in millions of dollars)                             6 months to            6 months to
                                                                30 Sept 2005           30 Sept 2004
____________________________________________________________________________________________________

Turnover
Hotels                                                               221,565                237,621
Supermarkets                                                       3,478,566              2,755,468
Retail                                                               513,060                506,508
____________________________________________________________________________________________________
                                                                   4,213,191              3,499,597
____________________________________________________________________________________________________

Operating (loss) / profit after net monetary gain
Hotels                                                              (25,204)               (91,715)
Supermarkets                                                         206,880                 60,465
Retail                                                               205,020                198,198
Corporate and other                                                  144,841              (280,936)
____________________________________________________________________________________________________
                                                                     531,537              (113,988)
____________________________________________________________________________________________________

Total assets
Hotels                                                             1,370,630              1,357,285
Supermarkets                                                       1,333,657              1,045,154
Retail                                                               812,446                962,170
Corporate and other                                                1,450,478              1,350,387
____________________________________________________________________________________________________
                                                                   4,967,211              4,714,996
____________________________________________________________________________________________________




SUPPLEMENTARY INFORMATION
____________________________________________________________________________________________________

Capital expenditure                                                   78,994                 33,227
Depreciation                                                          14,867                 40,131

Capital commitments
Authorised but not yet contracted for                                 75,801                 40,692


Accounting policies

The International Accounting Standards Board has released a number of new
accounting standards and made amendments to existing standards. The impact of
these changes has been assessed and applied but the financial effect for the
period is not material.

The inflation adjusted financial statements reflect a change in accounting for
the effect of the restatement of the foreign entities' income statements in
terms of IAS 29, and the restatement of the historical movements in the foreign
currency translation reserve (FCTR), in line with preferred treatment after
further interpretation of IAS 29.

The effect of the income statement restatement is now taken against FCTR and not
monetary adjustment as in the past. Previously the FCTR was restated from the
month in which it was generated. These changes have the effect of reallocating
amounts between the FCTR and retained income. The effect of these changes is to
reduce the prior period inflation adjusted profit by $16.4 billion and to
increase the opening retained income by $629,5 billion, the corresponding
balance sheet adjustment being to FCTR.

Note to inflation adjusted financial statements

The consumer price indices used to restate the financial statements at 30
September 2005 are as follows:

30 September 2004                                  46,048.2
31 March 2005                                      69,577.2
30 September 2005                                  211,751.3


For further information contact either:

Zimbabwe                   Bryan Thorn +263-4-252068/78
                           Roy Franklin +263-4-252068/78

Directors:                 JRT Moxon (Chairman), MA Masunda, DE Stephens, 
                           CB Thorn, MS Wilson, DW Mills

All current financial, operational and structural information on Meikles Africa
Limited can be obtained by visiting Meikles Africa Limited's website at http://
www.meiklesafrica.co.zw.


                      This information is provided by RNS
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