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Enacy Mapakame

One of the country’s leading retailers, TM Supermarkets, a subsidiary of the Meikles Limited group, says the level of stocking in its stores is satisfactory despite supply challenges experienced in the country due to foreign currency limitations.

During festive season, demand spike as consumption increases in line with festivities during the Christmas and New Year holidays.

In some instances, this results in shortages in certain goods. However, Meikles group executive chairman John Moxon, indicated the retail giant, trading as TM Pick n Pay, was adequately stocked to meet demand.

“Despite tough trading conditions, specifically supply challenges, the level of stocking in the stores is satisfactory,” said Mr Moxon in a statement accompanying the group’s financial results for the half year to September 30, 2019.

Although units sold during the half year declined by 22 percent compared to same period in the prior year due to shrinking disposable incomes, Meikles group remains upbeat of better performance for the segment on the back of expansion initiatives.

During the half year, five branches were refurbished while the group expects to open two new stores in the first quarter of year 2020 as it expands its footprint.

TM Pick n Pay has remained the group’s revenue driver accounting for over 90 percent of the group’s total revenue.

Its revenue came in at $940 million from the prior year comparable period’s $305 million, and the group attributed the revenue increase to inflation.

Earnings before interest, tax, depreciation and amortisation (EBITDA) for the period amounted to $125,9 million, representing a 477 percent growth from $21,8 million achieved the previous year.

Profit after tax came in at $50,8 million compared to $16,8 million achieved in the same period last year and the after tax profit was after deducting $54,6 million exchange losses primarily arising from a foreign currency denominated balance owed to Pick n Pay South Africa for merchandise supplied during the multi-currency period.

“At the end of November 2019, the balance had been reduced to ZAR 29 million from ZAR 100,4 million at the beginning of April 2019.

Our target is to expunge foreign currency denominated liabilities before March 2020 and eliminate recurrence of exchange losses going forward,” said Mr Moxon.

Overall group performance, profit after tax for the six months under review jumped 966 percent to $160 million compared to $15 million achieved in the same period in the prior year.

Other comprehensive income amounted to $336,4 million on the back of an uplift of foreign assets from the exchange rate at the end of March 2019.

Earnings before interest, tax, depreciation and amortisation (EBITDA) for the period under review came in at $223,5 million, which was 600 percent above same period last year.

Basic earnings per share grew 1 450 percent to 51,7 cents from 3,33 cents in the prior year comparable period.

“The group fared well in a turbulent economic environment characterised by drought, high inflation affecting disposable incomes and foreign currency shortages resulting in intermittent supply of electricity and fuel,” said Mr Moxon.