Meikles seeks approval to delist from London Stock Exchange

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  • Meikles seeks approval to delist from London Stock Exchange.
  • The proposal will be among key issues to be discussed during the firm’s annual general meeting (AGM) next month, according to a notice to shareholders released on November 14, 2022.

Zimbabwe Stock Exchange (ZSE)-listed diversified group Meikles Limited said it is seeking shareholder approval to delist from the London Stock Exchange (LSE).

The proposal will be among key issues to be discussed during the firm’s annual general meeting (AGM) next month, according to a notice to shareholders released on November 14, 2022.  Meikles will hold its 85th AGM virtually on December 5.

“That the company cancels the listing of its 4 556 899 ordinary shares on the official list of the financial conduct authority and the trading on the main market of the London Stock Exchange,” the company said in the notice under special business.

“That the directors of the company are hereby authorised to do all such things required to delist the company’s shares from LSE.”

Meikles is an investment holding company incorporated in 1937 with a primary listing on the ZSE and a secondary listing on the London Stock Exchange. Meikles Limited shares resumed trading on the London Stock Exchange following the lifting of the suspension slapped on the company’s shares by the LSE in 2009.

This means that Meikles had dual listing. Dual listing means that the shares of a company are mainly listed on two or more different exchanges.

The secondary listing means that a company trades its shares on a stock exchange other than the place where the first listing is made. As in this case, Meikles has secondary listing on LSE.

The benefit of dual listing is that it can make the company’s shares be contacted by more market investors, obtain more raised capital, and improve the stock liquidity of the company.

With Meikles gearing for the delisting, it simply means they won’t enjoy such benefits. Shareholders will decide at the scheduled AGM.

Other key issues to be discussed at the AGM as highlighted are to receive, consider and adopt the Group Financial Statements for the year ended 31 March 2022 together with reports of the Directors and Auditors thereon. The directors of Meikles Limited changed the company’s financial year-end from 31 March to 28 February.

Another general business is to also consider the re-appointment of Rugare Chidembo, Catherine Charmaine Chitiyo, Stewart Andrew Cranswick, and Simon James Hammond who retire by rotation and being eligible offers himself for re-election.

To appoint Messrs. Ernst and Young as the Auditors of the Company and Group for the year ending 28 February 2023.

The Group said they have adopted the requirements of the Companies and Other Business Entities Act [Chapter 24:31]:

“Section 191 (11) and the ZSE Listing Requirements (Statutory Instrument 134/2019): Section 69 (6) from the date of enactment. Messrs. Deloitte and Touche have been auditors of the Company for more than 10 years. Deloitte and Touche stepped down as the Auditors of the Company, in view of the requirements of Section 69(6) of the ZSE Listing Requirements. The Board of Directors recommends the appointment of Messrs. Ernst and Young as the new Auditors of the Company for the ensuing financial year,” read the statement.

Meanwhile, according to the abridged audited financial results for the year ended 31 March 2022, revenue for continuing operations, grew by 34 per cent to ZWL 66 billion from ZWL 49.1 billion in 2021. The growth in revenue was primarily driven by the increase in sales units at the supermarket segment. In historical cost terms, revenue grew by 131 per cent to ZWL 50.7 billion from ZWL 21.9 billion in the previous year.

Consolidated statement of profit or loss and other comprehensive income for the year ended 31 march 2022. [Photo/ Meikles]
Gross profit margin increased by two percentage points to 25 per cent from 23 per cent in the previous year. Inflationary pressure on operating costs offset the increase in the gross profit margin and as a result the operating profit margin was maintained at 3 per cent.

Operating profit for continuing operations was ZWL 2.2 billion, up 48 per cent from ZWL 1.5 billion in the prior year. (Historical cost, a growth from ZWL 2.4 billion to ZWL 4.3 billion).

Profit after tax for continuing operations (excluding profit on distribution of subsidiary) grew by 461 per cent to ZWL 3.4 billion from ZWL 599 million the previous year. (Historical cost, a growth in profit from ZWL 2.3 billion to ZWL 4.6 billion). Other comprehensive income increased to ZWL 3.0 billion from ZWL 843 million in the previous year, of which ZWL 1.9 billion is attributable to the uplift of the fair value of 35 per cent investment in Mentor.

Total comprehensive income increased to ZWL 5.8 billion (Previous year: ZWL 1.8 billion) (In historical cost ZWL 11.8 billion from ZWL 4.4 billion), of which ZWL 4.6 billion (79 per cent) is attributable to owners of Meikles and the remaining balance of ZWL 1.2 billion (21 per cent) to minority shareholders.

Segmental contribution to the Group’s financial performance was highlighted in the abridged financial results.

Revenue grew by 36 per cent to ZWL 66.0 billion in the group’s supermarkets, trading as TM Pick n Pay

The sales growth was due to an increase of 26 per cent and 11 per cent in units and customer transactions respectively according to Meikles.

Segmental contribution to the Group’s financial performance as in Meikles’s abridged financial results. [Photo/ Meikles]
Operating profit increased by 54 per cent to ZWL 2.8 billion from ZWL 1.9 billion in the previous year. In historical cost, a growth of 88 per cent to ZWL 4.7 billion from ZWL 2.5 billion. The growth in operating profit was due to strategic investment in stocks, margin control and cost saving initiatives.

The segment’s liquidity remained strong. It generated sufficient cash flows from operating activities to fund ZWL 1.8 billion branch refurbishments and ZWL 900 million dividend payout to the shareholders. Stores refurbished during the year were Newlands, Makoni and Zengeza.

Revenue increased to US$ 2.9 million from US$ 342,000 last year in the hospitality segment. Room occupancy for the year grew to 16.77 per cent from 2.45 per cent last year due to the easing of both local and international COVID-19 stringent travel restrictions during the second half of the financial year. Profit after tax improved to ZWL 196 million from a loss of ZWL 212 million in the previous year. The Group’s investment in hospitality has now been reduced to a single operation.

The Board also declared a final dividend of ZWL 100 cents and US$0.1725cents per share, taking the total dividend for the financial year to ZWL 280 cents and US$0.1725 cents per share, inclusive of two interim dividends of ZWL 80 cents and ZWL 100 cents.

Read: Meikles Limited: The making of a Zimbabwean corporate aristocrat

Albert is a Chemical Technologist and Author. He is passionate about mining, stock market investing, Fintech and Edutech.

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