Kenya operations boost Simbisa
LIVINGSTONE MARUFU
Zimbabwe’s largest fast food chain, Simbisa Brands Limited, has grown its footprint in Kenya and expects the east African operations to drive its growth in the region.
Simbisa, which operates ChickenInn, Pizza Inn, Creamy Inn, Baker’s Inn, Galito’s Africa, Nando’s, Steers, and Vida & Caffe brands across Africa, continues to grow its footprints in Kenya, opening 11 new counters in the east African nation in the 12 months to June 30, 2020, to close at 52 counters.
The company expects to open 16 more counters in 2021.
Food deliveries in Kenya was a major channel used to reach customers and even more so with the Covid-19 restraints on customers’ movement.
Consequently, on July 1, 2020, Simbisa entered into a partnership with Dial-a -Delivery in Kenya. In other markets, Simbisa streamlined its business due to difficult operating environments.
“Kenya remains the key growth market in the region and in the period under review 11 counters were opened and a partnership was formed to drive growth in the delivery business segment,” Simbisa chief executive Basil Dionisio said.
“The focus in our other regional markets has been to streamline the business, defend our market position and ensure existing operations generate positive returns on investments.”
In Zimbabwe, Simbisa experienced sustained erosion of consumer spending power, which continued to negatively impact the group in terms of the reduced footfall and lower real average spend and this was exacerbated by hard lockdown, according to Dionisio.
Market uncertainty and inflationary pressures worsened the situation as many local suppliers and service providers pegged their prices in United States dollars using a forward hedge rate above what was obtained in the market.
Zimbabwe’s customer counts dropped 33.7% year on year during the period under review.
In its financial results for the year to June 30, 2020, Simbisa’s customer counts in the regional business fell 12.1% during the period under review from prior year, of which all occurred in the fourth quarter due to Covid-19 pressures, while average spend increased 4.9%.
Revenue generated by regional operations fell 7.3% year on year in USD terms and 7.1 in inflation adjusted Zimbabwean dollar terms to ZWL$5.67bn in FY2020 from ZWL$6.11bn during the prior year.
The company’s profit for the period went up 111% to ZWL$584m during FY2020 from ZWL$276.9m.
The group recorded a foreign currency gain of ZWL$488.6m and this was driven by a significant improvement in the group’s net foreign currency position during the period under review and the depreciation of the local currency against the United States dollar.
Going forward, the company remains optimistic that proactive measures taken to counter the business impact will allow the company to weather inflation and other exogenous shocks and grow business.
