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Meikles Africa Ld (MIK)

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Friday 14 December, 2007

Meikles Africa Ld

Interim Results

Meikles Africa Ld
14 December 2007



                      UNAUDITED RESULTS FOR THE 6 MONTHS TO 30 SEPTEMBER 2007

                                         SALIENT FEATURES

                             References are to historical information
 
                                        Net turnover
                                        $5,2 trillion

                                       Operating profit
                                        $1,2 trillion

                                       Attributable profit
                                    Increased to $16 trillion

                               Cash generated and funds available
                         Funds generated from operations were $1 trillion
                                Funds on hand amount to $9,7 trillion



                          References are to inflation adjusted information

                                         Net turnover
                                         $8,9 trillion

                                       Operating profit
                                        $1,8 trillion

                                      Attributable profit
                                   Increased to $2,7 trillion

                                Cash generated and funds available
                          Funds generated from operations were $3 trillion
                               Funds on hand amount to $9,7 trillion


OVERVIEW



The six months period to 30 September 2007 reflects a first quarter which was
more controllable from an operating point of view and a second quarter which was
severely affected by price controls and stock outages as consumers took
advantage of price adjustments to products and suppliers were unable to replace
stock on a timely basis.


During the second quarter sales on credit were withdrawn from department stores
to more effectively manage working capital.  However, this did not materially
affect sales performance relative to available stock.

Trading conditions for TM Supermarkets were very difficult in the second quarter
as the selection of locally manufactured products diminished because of supplier
delivery constraints.  Stock that could be sourced turned over quickly.

The Hotels division recorded results driven by increased occupancies in all
three units together with the effect of exchange rate movement.

The inflation adjusted figures do not really reflect an accurate position in
real terms. Exchange rate movement, interest rates and the inflation figures do
not correlate, hence limiting the application of the information.  Historical
cost figures are equally distorted, as they do not reflect the real position.
These factors mean that interpretation of financial information must be with
caution, although trends and relationships are useful guides in analysing
results.

Working capital management, cash flows and cost controls were a key strategic
focus during the period.

HIGHLIGHTS OF DIVISIONAL ACTIVITIES

(Reference to historical cost figures)

CORPORATE

•   Funds available for investment and other foreign funds amount to 
    US$45 million.

•   Investment in Mvelaphanda Group was sold for R52 million and funds are
    available for regional investments.

•   Net exchange gains amounted to $17, 1 trillion.



RETAIL DIVISION

•   Turnover increased to $3, 7 trillion.

•   Operating profit was $667 billion.

•   Gross margins were affected by price controls. Deliberations on
    pricing models continue.

•   Realignment of Clicks Head Office resulted in cost savings.

•   Cash flow effectively managed to balance trading cycles.

•   Shortages of flour and power outages affected bakery operations.

•   Lack of meat supply resulted in a significant reduction in turnover
    and sales mix.  All other popular food products were undersupplied.

•   The new point of sale system in department stores is operational,
    providing improved stock information.

•   Two supermarkets have updated point of sale systems.

•   Projects for three new TM branches are advancing with the development
    at Victoria Falls expected to be the first operational, early in 2008.



HOTEL DIVISION

•   Group occupancy increased by 29% compared to prior year.

•   Revenue per available room and turnover increases particularly driven
    by Cape Grace Hotel and movement in exchange rates.

•   Food and beverage availability has normalised to a certain degree.

•   Plans for refashioning Cape Grace and a substantial expansion of the
    Victoria Falls Hotel are advancing.

•   Repairs and maintenance programmes at Meikles and Victoria Falls
    Hotels are being accelerated.



OUTLOOK

Shareholders have approved the merger with Kingdom Financial Holdings Limited,
Tanganda Tea Company Limited and Cotton Printers (Private) Limited.

The sanction by the Courts of the Tanganda and Kingdom scheme meetings will
provide the final authority for the merger to go ahead.  Meikles Africa looks
forward to participating in the new Kingdom Meikles Africa Group ('KMAL'), which
will provide a very strong asset base for local and regional expansion.

Stock pricing models continue to be reviewed with the authorities.

Funding of stock replacement is a major factor in putting merchandise back on
the shelves.  BACOSSI funds have been allocated to the TM Supermarkets and these
will assist in this process, so long as stock can be sourced.

JOHN MOXON
CHAIRMAN



DIVIDEND

In view of the 'KMAL' merger and the change in the financial year-end of Meikles
Africa, which is still the subject of regulatory approval, the directors have
decided not to propose a dividend until merger matters are finalised.



A.P LANE-MITCHELL
COMPANY SECRETARY



14 December 2007




UNAUDITED CONSOLIDATED INCOME STATEMENT
For the 6 months to 30 September 2007


                                                          INFLATION ADJUSTED                HISTORICAL COST

(all amounts in millions of dollars)                      6 months to   6 months to    6 months to   6 months to
                                                         30 September  30 September   30 September  30 September
                                                                 2007          2006           2007          2006

Revenue                                                   8,852,377       3,817,107      5,212,284        32,002
                                                          
Operating (loss) / profit before monetary
adjustment and exchange gains                               (922,989)     (273,014)        936,453         4,965
Net monetary gain from operating activities                 2,451,244       256,123              -             -
Exchange gains on net current assets                          291,079         7,112        277,636             8
                                                              
Operating profit / (loss)                                   1,819,334       (9,779)      1,214,089         4,973
Investment income                                             413,845       109,836        300,747           760
Finance costs                                                (38,447)      (47,604)       (17,006)         (384)
Net exchange gains / (losses)                               6,409,345     (306,878)     17,104,532         6,820
(Decrease) / increase in value of quoted                  (1,637,327)      (77,912)       (29,799)           600
investment                                                
Net monetary loss from financing activities               (3,036,115)      (37,986)              -             -
Share of profits / (losses) of associate                      119,761       (1,616)        144,281           289
                                                              
Profit / (loss) before taxation                             4,050,396     (371,939)     18,716,844        13,058

Income tax expense                                        (1,004,248)      (48,735)    (2,609,024)        (2,447)
                                                          
Profit / (loss) for the year                                3,046,148     (420,674)     16,107,820         10,611
                                                            
Attributable to:
Equity holders of the parent                                2,688,521     (442,092)     16,017,785          9,866
Minority interest                                             357,627        21,418         90,035            745   
                                                            3,046,148     (420,674)     16,107,820         10,611

Basic earnings per share ($)                                   16,414        385.06         97,795          60.28       
IIMR Headline earnings per share ($)                           16,448        387.77         98,378          60.10

Weighted average number of shares                         163,789,944   163,656,787    163,789,944    163,656,787



UNAUDITED CONSOLIDATED BALANCE SHEET
At 30 September 2007


                                                        INFLATION ADJUSTED                HISTORICAL COST

(all amounts in millions of dollars)                           At  Audited at              At    Audited  at
                                                     30 September    31 March     30 September      31 March
                                                             2007        2007            2007           2007

ASSETS
Property, plant & equipment                             8,353,308   5,383,367       7,264,353        372,055            
Investment in associates                                  578,647     458,886         152,790          8,509
Other financial assets                                 11,564,486   5,734,097      11,559,439        483,350
Goodwill                                                  295,308     295,308               2              2
Current assets                                         11,802,502  12,806,984      11,694,415      1,057,441
                                                                         
Total assets                                           32,594,251  24,678,642      30,670,999      1,921,357
                                                                         


EQUITY AND LIABILITIES
Attributable to equity holders of the parent           22,592,541  16,477,457      21,431,285      1,266,415
Minority interest                                         543,810     186,181          98,972          8,938
Deferred tax                                            1,998,830   1,627,104       1,681,672        107,060
Other non-current liabilities                           2,072,985   1,953,040       2,072,985        164,777
Current liabilities                                     5,386,085   4,434,860       5,386,085        374,167
                                                        
Total equity and liabilities                           32,594,251  24,678,642      30,670,999      1,921,357
                                                       



UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the 6 months to 30 September 2007



                                                         INFLATION ADJUSTED                       HISTORICAL COST

(all amounts in millions of dollars)                  6 months to    6 months to              6 months to    6 months to
                                                     30 September   30 September             30 September   30 September
                                                             2007           2006                     2007           2006
                                                                           
Profit / (loss)  for the period                         2,688,521       (442,092)              16,017,785          9,866
Cape Grace Hotel - translation of                                                                                  
foreign entity                                          3,488,606          90,924               4,148,376          1,256
Scrip dividend                                             39,321               -                  25,365              -
Dividend - prior year final                             (101,364)        (57,545)                (26,656)          (327)

Attributable to equity holders of parent                6,115,084       (408,713)              20,164,870         10,795
Minorities                                                357,629           4,203                  90,034            647
                                                          
Shareholders' equity at the beginning of                                                                           
the year                                               16,663,638       3,029,100               1,275,353          6,961
Shareholders' equity at the end of the 6                                                                          
months period                                          23,136,351       2,624,590              21,530,257         18,403


UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
For the 6 months to 30 September 2007


                                                                INFLATION ADJUSTED             HISTORICAL COST

(all amounts in millions of dollars)                       6 months to  6 months to   6 months to   6 months to
                                                          30 September 30 September  30 September  30 September
                                                                  2007         2006          2007          2006

Cash flows from operating activities
Profit / (loss)  before taxation                             4,050,396    (371,939)    18,716,844       13,058
Adjustments for:
  Non-operating cash flow                                  (7,228,394)      244,646  (17,700,237)      (7,239)
  Non-cash items                                             5,580,092      428,353      (19,830)        (776)
Operating cash flow before working capital changes           2,402,094      301,060       996,777        5,043
Working capital changes                                        590,289       30,955        30,093      (1,490)
Cash generated from operations                               2,992,383      332,015     1,026,870        3,553
Income taxes paid                                            (226,693)    (105,714)      (39,088)        (243)
Net cash generated from operating activities                 2,765,690     226,301        987,782        3,310
                                                             
Net cash generated from / (used in) investing                                                            
activities                                                     247,062    (60,131)        105,494        (594)

                                                               
Net cash used in financing activities                        (424,299)   (182,656)       (46,181)        (335)

Net increase / (decrease) in cash and cash equivalents       2,588,453    (16,486)      1,047,095        2,381
                                                             

Cash and cash equivalents at the beginning of the year       9,712,176   1,175,707        819,412        4,313

Net effect of exchange rate changes on cash and cash                                                     
equivalents                                                    228,873   (299,766)      7,597,169        6,828

Translation of foreign entity                              (2,857,412)    103,936         208,414      (1,602)

Cash and cash equivalents at the end of the 6 months                                                    
period                                                       9,672,090     963,391      9,672,090       11,920




UNAUDITED SEGMENT INFORMATION
                                                      INFLATION ADJUSTED                 HISTORICAL COST

(all amounts in millions of                  6 months to        6 months to         6 months to  6 months to
dollars)                               30 September 2007  30 September 2006   30 September 2007 30 September 
                                                                                                        2006
Revenue
Retail                                         6,845,353            208,115          3,716,519        30,289   
Hotels                                         2,007,024          3,608,992          1,495,765         1,713
                                               8,852,377          3,817,107          5,212,284        32,002
                                                                             
Operating profit / (loss) after
monetary adjustment and exchange gains
Retail                                         1,538,602             14,952            671,131         4,625
Hotels                                           492,370           (20,448)            546,135           425
Corporate                                      (211,638)            (4,283)            (3,177)          (77)
                                               1,819,334            (9,779)          1,214,089         4,973

Segment assets
Retail                                         2,288,496          1,673,162          1,506,163        16,142
Hotels                                        10,307,014          1,273,501          9,829,568         6,222
Corporate                                     19,998,741          1,229,534         19,335,268        12,071
                                              32,594,251          4,176,197         30,670,999        34,435




SUPPLEMENTARY INFORMATION                           INFLATION ADJUSTED                     HISTORICAL COST

(all amounts in millions of dollars)             6 months       6 months to          6 months to   6 months to
                                          to 30 September      30 September         30 September  30 September
                                                     2007              2006                 2007         2006

Capital expenditure                               299,415            68,779              211,711          575
Capital commitments authorised but not yet
 contracted for                                 1,094,631           168,270            1,094,631        2,082
Depreciation                                      162,394            64,091               95,529          113
Market value of investments
       - Associate - Kingdom Financial                              
         Holdings Limited                       8,684,176           765,701            8,684,176        9,474
       - Investment - Mvelaphanda Group                 -           101,754                    -        1,259
Interest bearing borrowings                     1,306,199           249,980            1,306,199        3,093




Accounting policies



Accounting policies are consistent with those used in the previous year.



Note to inflation adjusted financial statements



The consumer price indices used to restate the financial statements at 30
September 2007 are as follows:

30 September 2006                                              2,378,624.9
31 March 2007                                                 16,221,182.2
30 September 2007                                            192,243,450.0



For further information contact:



Zimbabwe          Bryan Thorn +263-4-252068/78


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