Meikles has warned of a deflationary period in Zimbabwe as it takes legal action against the Reserve Bank of Zimbabwe and Ministry of Finance and Economic Development to recover funds held on deposit.

"The sum claimed as at 31 December 2013 amounted to approximately US$89 million. The receipt of these funds is critical to the well-being of the group and all its stakeholders," Meikles said. 

Against this backcloth, it said Zimbabwe was entering a period of economic deflation, with inflation at just 0.33 percent on December 31, 2013.

"Aggregate demand continues to fall as the liquidity situation has remained constrained. The cost of funding has gone up due to shortage of funds on the local money market," the company said.

The group has progressed its involvement in the mining sector. The first gold project has been identified and implementation is being finalised. A chrome opportunity has been concluded and is awaiting regulatory approvals. 

The group was working very closely with its partner, Centar, and has a vision to become a significant player in the mining sector. Of its retail operations, Meikles said consumer demand has been receding. Trading in its supermarkets, particularly in groceries, has been subdued in the first nine months of our financial year. 

"However, turnover in fruit and vegetables, takeaways, butcheries and liquor has shown useful growth," it said.

"The turnover in TM Supermarkets (TM) was one percent above that of the comparative period in 2012. Sales and operating margins though comparable to historical levels are under pressure due to lack of spending power by consumers  but have benefited from the growth in the service areas."

Meikles said the departmental stores have been badly affected by the challenges in the economy. Turnover for the nine months was 32 percent below that earned in the comparative period and aggravated by the closure of three branches during the course of the year 2013.

Of its agro operations, Meikles said the rains have been good thus far. The plantation development has progressed well with 351 hectares being put under new crops in the last nine months. At 31 December 2013 the hectarage under coffee, avocadoes and macadamia was 229ha, 318ha and 62 ha respectively. 

The target remains for the company to have 300ha, 500ha and 750ha under coffee, avocadoes and macadamia by March 2015.

"We are proud of the work that has been done on the estates and all stakeholders stand to benefit." The actual production of bulk tea to 31 December 2013 was 42 percent ahead of the same period in the previous financial year. The bulk tea production for the year ending 31 March 2014 will surpass the output of 7,500 tons achieved in the previous financial year."

The holiday resort of Victoria Falls has enjoyed good occupancy rates post the hosting of the UNWTO and our hotel, jointly managed with African Sun, has benefited substantially. The Average Daily Rate (ADR) has improved by 17 percent and Revpar (revenue per available room) has gone up by 12 percent for the period ended 31 December 2013 when compared to the same period in 2012.

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