ZIMBABWE – Simbisa Brands, one of Africa’s leading Quick Service Restaurant group, nearly doubled its full year revenue for the period ended June 2021 to ZWL$18.8 billion (US$51.9m) from ZWL$9 billion (US$29.86m) reported in the prior comparative period.
The 108% rise in top-line performance was driven by increased sales through delivery channels, growth of customer counts alongside higher average spend rate.
This is despite the fast-food chain operator trading at 70% capacity on counter trading hours due to the Covid-19 related mandatory restriction.
Furthermore, aggressive cost-saving measures initiated in response to the tough and uncertain operating environment, resulted in cost efficiencies which allowed the group to grow the operating profit margin from 8.0% in FY2020 to 12.8% in FY2021.
“Simbisa remained resilient and managed to grow customer counts by 6% through increased delivery sales contribution, promotional activities, value offerings and continued investment into new store roll-outs,” said Simbisa Chief Executive Officer, B Dionisio.
Profit for the cash-rich entity, which operates Chicken Inn, Pizza Inn, Baker’s Inn, Galito’s Africa, Nando’s, Steers, and Vida & Caffe brands across Africa, grew 97% to ZWL$2.2 billion (US$6.07m) in the reviewed period from ZWL$1.1 billion (US$3.03m) in the same period last year.
Operations at its home market in Zimbabwe, managed to trade with remarkable resilience in the financial year under review.
Customer counts grew 8% year-on-year whilst inflation-adjusted average spend increased 34% versus prior year resulting in a 60% increase in local currency revenue.
The group continued to expand its footprint in Zimbabwe with the opening of 13 new counters between 30 June 2020 and 30 June 2021. As at 30 June 2021 there were 232 operational counters in Zimbabwe.
Reginal performance boosted by double digit revenue growth in most markets
Meanwhile at its regional business comprising of Kenya, Zambia, Namibia, Mauritius, DRC and Ghana, local currency revenue increased by 318% and 5% in USD terms from a 2% increase in customer counts and a 3% growth in Average spend.
Expansion of the Simbisa brand footprint continued through the opening of 22 new counters in the region, of which 16 were opened in Kenya.
The largest East African economy continued to leverage on its delivery business, Kutuma Kenya Limited to drive sales.
The business registering a 29% increase in deliveries, contributed to Simbisa Brands Kenya revenue jump from an average of 16% in FY2020 to 20% in FY2021.
Meanwhile in Zambia, business achieved a 41% increase in local currency revenue, however, exchange rate pressures dampened top-line growth in US Dollar terms and the business registered a 3% decrease in revenue in real terms.
In Mauritius, local currency revenue remained flat with customer counts falling by 5% but off set by average spend increase of 5% year-on-year, on the back of increased delivery contribution.
The restructuring exercise currently underway in the market, in which the Pizza Inn brand is being converted from a table service to a counter service QSR model, continues to bear fruit as the brand recorded a 22% increase in revenue during the period under review.
Ghana’s local currency revenue increased by 32%, buoyed by a 23% year-on-year increase in Average Spend.
In Namibia, Simbisa’s revenues were negatively impacted by the loss of trading hours and lockdown restrictions imposed in FY2021.
As such, revenue was down 12% versus prior year with customer counts falling 20% year on year.
Business in the country has been converted into a franchised market effective 1 July 2021, adopting the model undertaken in the DRC, whose revenue grew by 7%.
Looking ahead, Simbisa is targeting to build 92 new stores in the next financial year at a cost of close to US$20m as the group moves to consolidate its footprint in Africa.
“The Group’s focus remains on growing our footprint with 92 new stores in the pipeline in FY22 at an estimated investment cost of USD 19,261,637. Of these stores, 8 will be Drive-thru sites in line with increased focus on diversifying the Group’s customer service channels,” said Simbisa Group chairman ABC Chinake.
The group will also continue to improve operating efficiencies as witnessed in improved operating profit margin despite the impact of Covid-19 on customer counts.
To this end, Simbisa is moving onto an upgraded ERP system which has already been implemented at its main marker, Zimbabwe.