ZIMBABWE – Zimbabwe’s Quick service restaurant (QSR) group, Simbisa Brands Limited’s revenue for the year ended 30 June increased 33% from US$151.1 million to US$204.7 million on expansion, consolidation and acquisitions in the regional markets.
The group recorded growth in earnings attributed to increased operating efficiencies and higher revenue streams.
Operating profit rose 60% to US$28.1 million while profit before tax jumped 113% to US$20.1 million compared to US$9.5 achieved last year.
A trading update issued by the company stated that cash generated from operations after changes in working capital increased to US$28.3 million while cash utilised in investing activities of US$11.1 million was incurred mainly for expansion activities in Kenya and Zimbabwe.
Simbisa is looking to maintaining the growth trajectory in the region in the year.
It plans to further grow its core QSR business in both existing and new markets in Africa while expanding casual dining services in Zimbabwe where high income demographic is expected.
“I am optimistic that a stabilisation in the socio-political environment and the impending economic reform in the wake of elections in Kenya and Zimbabwe will pave way for continued growth and new opportunities in these two markets where we are most developed,” said the group chairman Addington Chinake.
Regional consolidation
The group said it managed to reach a record high in customer count in its 30 years trading history.
It acquired additional interests in Zambia, Ghana and Mauritius and secured 49.9% interest in voting shares in its Ghanaian operating entity, increasing its ownership to 100%.
Simbisa paid US$80,000 in receivable to non-controlling shareholders, valuing the Ghanaian operating unit at US$1.76million.
In July, the restaurant chain acquired an additional 36.5% in its Mauritius operating entity, increasing its ownership to 87.5% valuing it at US$1.28 million.
Locally, the group has expanded its casual dining segment after adding RocoMamas and Ocean Basket as well as Mugg and Bean in Zambia.
Its interest in the Zambian entity reduced from 100% to 51% after it issued shares to its local partner in exchange for their 50 percent share of assets and liabilities in a joint operation.
DRC exit
Chinake said that due to continued macro-economic challenges and the rising financial and operational risk of operating in the DRC, the company had disposed of its interest in that country.
Operations in the country has been curtailed by hard economic environment emanating from political upheavals, and also the uncertainty from elections to be held in December.
Simbisa has postponed the secondary listing on the London Stock Exchange (‘AIM’) to a future date.
This is despite an approval by the board of the company in March to proceed with the acquisition of Foodfund and list in London.
