…as it put in place strategies to hedge against currency vulnerabilities in the region

By Staff Writer

HARARE – Simbisa Brands says continued new store expansion is a key strategy for profitable markets to convert profits into tangible assets. The group which operates in Zimbabwe, Kenya, Zambia, Mauritius, Ghana, Namibia and other franchised markets has a store count of 509 stores.

Simbisa Zimbabwe runs brands such as Pizza Inn and Chicken Inn. The group continued to expand its footprint in Zimbabwe with the opening of 6 new counters during the six months ended 31 December 2020. As at 31 December 2020 there were 227 operational counters in Zimbabwe.

“Simbisa will continue to focus on growth through expanding our quick service restaurant and casual dining footprint and growing market share in existing markets,” said Basil Dionisio, chief executive officer of Simbisa Brands.

“In pursuit of this objective, there are 38 counter openings in the pipeline for 2H FY2021. The expansion of the Rocomama’s brand in Zimbabwe, Zambia and Ghana as well as the launch of the Spur brand in Zimbabwe and the Ocean Basket brand in Kenya are included in the 2H FY2021 pipeline.”

He said the group remains vigilant to brand development and business opportunities in both existing and new African markets.

Revenue for the group doubled to ZWL$8 billion (+44% in Zimbabwe and +500% in the Region). Growth in Zimbabwe is mainly driven by a 56% increase in average spend. In the Region, whilst revenue fell by 14% in USD terms, driven by a 19% decline in customer counts offset by a 6% increase in average spend, translation into Zimbabwean dollars reflects a 500% growth.

“The group has put in place strategies to hedge against currency vulnerabilities in the region which includes locally procuring capital expenditure, stock and expenses where possible and structuring borrowings in local-currency in all operating markets to minimise our exposure to US-Dollar obligations and therefore hedge against forex movements,” Dionisio said.

Operating profit increased by 75% to ZWL$1.34 billion. Profit attributable to shareholders and headline earnings nearly doubled to ZWL$844.1 million.

Cash generated from operating activities rose threefold to ZWL1.99 million.

The Board has resolved to declare an interim dividend of ZWL 53 cents per share.

Despite reduced trading hours, 1H FY2021 customer counts in Zimbabwe fell a more moderate 7% year on year, with a significant improvement between 1Q FY2021, where customer counts were down 18% versus prior year, and Q2 FY2021 in which Simbisa managed to grow customers compared to the prior year. As a result of gradual easing of restrictions and new store openings, customer counts grew 166% between 4Q FY2020 and 2Q FY2021.

“The progress made is testament to the success of the ongoing promotions and value meals being offered as well as steady growth in footprint, deliveries, and the introduction of curbside collections which was well-received by customers,” Addington Chinake, independent non-executive chairman of Simbisa.

“Although consumer spending power remains under pressure in the market, as a result of depressed economic conditions and the social implications of the Covid-19 pandemic, Simbisa Zimbabwe achieved real growth in average spend in 1H FY2021 versus the prior year comparable period.”

Average spend increased by 56% in inflation-adjusted Zimbabwe Dollar terms.

On regional operations, customer counts fell 19% from prior year, while average spend increased 644% in ZWL inflation-adjusted terms and 6% in USD terms, despite currency devaluation against the USD across our regional operating markets.

Advertisement

LEAVE A REPLY

Please enter your comment!
Please enter your name here