Companies

Simbisa embarks on expansion drive

LIVINGSTONE MARUFU

Zimbabwe’s largest food chain, Simbisa Brands Limited, has embarked on an expansive drive across Zimbabwe and the region which will see the firm opening 38 stores in the next six months, board chairman Addington Chinake has said.

The consumer discretionary concern operates Chicken Inn, Pizza Inn, Baker’s Inn, Galito’s Africa, Nando’s, Steers and Vida & Caffe brands across Africa.

Chinake said Simbisa was well-positioned to navigate the challenges ahead due to its geographically diversified store network, strength of its take-away channel and fast-growing delivery and drive-through channels.

“We continue to make progress towards long-term growth and explore new possibilities for operational optimisation as we gear up to ease into a post-Covid-19 world, with a pipeline of 38 new stores for the remaining six months of the financial year,” Chinake said in a statement accompanying the company’s financial results for the six months  to December 31, 2020.

Simbisa had net new store growth of 21 stores from the beginning of the financial year and an increase of 13 stores for the quarter.

The group celebrated its 500th store opening during the last quarter and the historic milestone reinforced Simbisa’s continued commitment to grow its footprint, Chinake said.

As a result, Simbisa closed the period with a store count of 509 stores.

Chinake said the group’s month-on-month recovery in customer counts, operating profit margins remained firm despite low customer counts as a result of the group’s response on the operating expense side of the business and improved operating efficiencies.

He said the impact on lost customer counts has been mitigated through promotional activities, value offerings and continued growth in Simbisa’s footprint, although trading conditions remained restrictive in the period under review, resulting in lost counter trading hours.

An increase in delivery sales contribution which has emerged through a change in customer buying habits during the pandemic and supported by an increased focus on the delivery business, has resulted in increased average spend across all Simbisa’s operating markets, Chinake said.

He said the Zimbabwe operations traded with remarkable resilience in the six-month period under review.

Chinake said Simbisa Zimbabwe navigated the health risks associated with Covid-19 without having to completely shut down any outlets over the period under review, although counter trading hours were still 19% down on prior year due to the curfew upheld throughout the period and with restrictions being tightened from mid-December.

Simbisa Zimbabwe achieved real growth in average spend in H1 FY2021 versus the prior year comparable period, 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.

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

The group continued to expand its footprint in Zimbabwe with the opening of 6 new counters between June 30 2020 and December 31 2020.

As at December 31 2020 there were 227 operational counters in Zimbabwe.

The turnaround strategies implemented in Zambia and Mauritius have been greatly successful and these markets are now entering into a growth phase, with Namibia being the only critical care market where the focus in the short term will be converting this into a franchised market, Chinake said.

Profit for the period spiked 91% to ZWL$844.1m during the period under review from ZWL$442.6m during the same period last year due to foreign currency sales.

Revenue for the group increased by 101% to ZWL$8.003bn from ZWL$3.9bn recorded in the prior comparative period.

Cash generated from operations was ZWL$2bn.

Total capital expenditure for the period was ZWL$644m.

Simbisa chief executive officer, Basil Dionisio said the company was working hard at recovering lost customer counts through promotions and affordable value options for customers where spending power is under pressure and to focus on driving growth in sales generated through delivery channels.

“A key focus area remains on growing and improving the delivery business which is being realised through the continued development and refinement of the Dial-a-Delivery mobile application in order to enhance the user experience and with the target of growing application-related customers and orders,” Dionisio said.

He added: “Continued new store expansion is a key strategy for profitable markets to convert profits into tangible assets,” he said.

Dionisio said Simbisa Brands is developing a Customer Data Platform to collate, analyse and interpret the data and information available through the mobile application, to improve the delivery businesses’ performance and the customers’ experience through its subsidiary Kutuma Kenya Limited.

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