By Alois Vinga
MEIKLES Limited has commended the tight financial conditions for exerting a positive impact on both inflation and exchange rate amid revelations that the company is operating without any credit while maintaining bank balances of over US$19 million.
Since the first half of 2022, authorities in Zimbabwe adopted a tight monetary policy stance characterised by high interest rates to curb speculative borrowing, tighter requirements on KYC and excess liquidity mop up instruments among other measures.
The initiatives have managed to ease unsustainable inflationary pressures from a high of over 800% as at around mid-2022 for yearly inflation to the current 229,8% with monthly inflation having gone down from 37% to the current 1,07%.
In an update for the third quarter trading period, Meikles company secretary, Tabani Mpofu commended the positive outcome of the policy measures.
“The trading environment for the quarter ended December 31 2022 was characterised by tighter financial conditions due to the policy measures implemented by the government to stabilise prices and the exchange rate from July 2022.
“The policy measures had a positive impact on both inflation and the exchange rate,” he said.
Mpofu said during the same period, Meikles group revenue grew by 40% and 58% in inflation adjusted terms for the quarter and the nine months respectively.
In historical cost terms, group revenue grew by 399% and 411% for the quarter and the nine months respectively. All operating subsidiaries generated positive cash flows during the period under review.
The supermarkets segment completed and opened two new stores, Pick n Pay Simon Mazorodze and Pick N Pay Madokero during the quarter under review on the back of branch network expansion and refurbishments are funded from operating cash flows.
“The Group’s financial stability remains strong with cash and bank balances amounting to more than US$19 million at the end of December 2022 and has no bank borrowings.
“Both expansion and replacement capital expenditure plans continue to be implemented as the Group has adequate financial resources at its disposal,” added Mpofu.