LIVINGSTONE MARUFU
Leading food chain, Simbisa Brands Limited has opened 14 counters in the quarter to September 30 2021 with 73 more counters expected to be opened during the 2022 financial year.
Simbisa chief executive officer Basil Dionisio said significant capital investment is being made in upgrading the Zimbabwe Operations’ Central Kitchen and Central Stores to increase storage capacity and further automate the production process.
He said the group continues to explore potential investment opportunities that would be value accretive to Simbisa’s shareholders, with a particular focus in Kenya.
“Zimbabwe opened three new counters and invested in one mobile truck in (the reviewed period ) to close the period with 238 counters in operation.
“In the quarter under review, Kenya opened eight new counters, Ghana opened two new counters and Mauritius opened one new counter whilst one counter was closed in Zambia and one in Mauritius,” Dionisio said.
He said effective July 1 2021, Simbisa converted Namibia into a franchised market, thus closing the period with 248 company-operated counters in the region as at September 30 2021.
Simbisa franchised market, DRC, opened new counters in (the reviewed quarter) , closing the period with a total of 303 counters (franchised and company-operated) in the region.
During the quarter under review revenue increased 74% on prior year in inflation adjusted terms.
The Zimbabwe operations’ revenue grew 57% in inflation adjusted year-on-year driven by a 29% increase in customer counts versus the prior year period as Covid-19 related trading restrictions eased off.
Dionisio said despite some respite in the restrictions in the period under review, counter trading hours in Zimbabwe were still 52% below capacity due to sustained nationwide curfews that were in place during the quarter under review and seating capacity was restricted to 50%.
The impact was most significant on Simbisa Zimbabwe’s casual dining brands.
Although consumer spending power remains under pressure in the market, Simbisa Zimbabwe achieved real growth in average spend in reviewed period compared to the prior year comparable period. With the US$ average spend increased 11% versus prior year.
Simbisa customer counts in the regional business increased 37% in the reviewed period versus prior year, on the back of a recovery in trading activity as Covid-19 restrictions eased in the period under review.
Whilst Kenya’s trading hours were still 20% below full capacity, other markets including Mauritius, Ghana and Zambia resumed operations at full capacity, although seating restrictions were in place in Zambia resulting in all trading taking place on a takeaway basis in the quarter.
The revenue from the regional operations increased 107% on a year-on-year basis, with US$ average Spend remaining flat (+1%) on the prior year period due to increased customer counts.
Major currencies in Simbisa’s regional operating markets remained relatively stable in the reviewed period operating period with the Zambian Kwacha appreciating 19% against the US Dollar, on the back of post-election positive sentiment.
Simbisa operating profit margins improved to 15% as a result of increased turnovers against a carefully managed cost-base.
Zimbabwe’s operating profit margins increased from 10% to 15% in the reviewed period. Regional Businesses’ operating profit margins grew to 14% from 9% in prior comparable period.
Simbisa said increased delivery contribution, which has also translated to firmer average spend, has further supported the increase in turnover versus prior year.
The robust perpetual cost management and currency stability have supported operating margins and translated top-line growth into improved profitability and Shareholder returns.
Simbisa’s strategy to leverage technology to improve efficiencies and overall customer experience, the group launched in Zimbabwe its inaugural loyalty platform, “Innbucks”, which is available as a mobile application or on USSD.
In the outlook, Simbisa is in the process of integrating the platform to Dial-a-Delivery and the intent is to roll out the platform across all of Simbisa’s regional markets in due course.
