Zimbabwean companies are starting to re-organise after a decade of economic collapse that saw inflation reach 5 billion percent in 2008 and made planning difficult.
Meikles owns two premier hotels in the capital Harare and the resort town of Victoria Falls and also runs the biggest supermarket chain by branches, TM Supermarkets, in which South Africa’s Pik’n Pay Stores Ltd (PIKJ.J) has a 25 percent shareholding.
Farai Rwodzi, Meikles chairman, told Reuters after an analyst briefing that the capital expenditure would go towards refurbishing the two hotels and its TM Supermarkets, including installing new refrigeration and point of sale terminals.
“The financing is a combination of offshore financing and shareholder funds,” Rowdzi said.
He said the capital expenditure would allow Meikles, which suffered a $9.57 million loss during the period ending March 2010, to swing back to profit by the end of this year.
Hotel occupancies were up to between 32-41 percent during the first quarter of 2010 from 17-21 percent last year.
Turnover rose more than ten times from $13.85 million in 2009 to $148.8 million but a poor performance by TM Supermarkets affected the company’s overall performance.
Rwodzi said TM Supermarkets was now breaking even and that it would deepen its ties with shareholder Pik’n Pay to remain ahead of growing competition, mainly OK Zimbabwe OK.ZI, which is part owned by an Investec fund and South African grocery chain Spar Group (SPPJ.J), which operates through franchise.
TM Supermarkets has 53 branches across the country.
“We have a very strong brand and we will take advantage of our synergies with Pick’n Pay,” said Rwodzi. Reuters