Simbisa seeks shareholders’ nod as it eyes VFEX
BUSINESS REPORTER
Simbisa Brands Limited shareholders meet on November 18 to approve the delisting of the company from the Zimbabwe Stock Exchange as the consumer discretionary concern eyes incentives on the Victoria Falls Exchange (VFEX).
In a circular to shareholders, Simbisa board chairman Addington Chinake said they should support the delisting and the subsequent listing on the VFEX as the group will be able to attract foreign currency capital from investors to match the business’ foreign currency needs provided that Simbisa’s revenue streams are predominantly in USD for the Zimbabwean operations which are material to the group.
“Furthermore, a US$- indexed exchange would support the organisation’s most appropriate functional currency and its sizeable ownership in foreign assets,” Chinake said.
He said the listing on the VFEX would enable existing shareholders to realise the United States dollar value of their holdings as compared to the ZSE where local currency returns were subject to hyperinflation.
Chinake said the listing on the foreign currency only bourse would allow the consumer discretionary concern to take advantage of offshore settlement options which allow investors to efficiently repatriate their dividends.
This would also eliminate the foreign currency risk of holding Simbisa shares as a foreign investor. The VFEX has lower trading costs of 2.12% compared to 4.63% on the ZSE, which will improve the shares’ liquidity.
Chinake said the VFEX also has tax incentives that enable the investor to retain more of their returns versus the ZSE.
“Overall, better investment terms would promote liquidity in the trading of Simbisa shares, making them more attractive to investors,” he said, adding the listing would elevate Simbisa’s local and international profile thereby boosting its public and commercial standing.
Simbisa will be the fifth counter on the VFEX. Other counters listed on the VFEX are Seed Co International, Padenga Holdings, Bindura Nickel Corporation and Caledonia Mining Corporation.
In its financial results for the 12 months to June 30, 2022, Simbisa reported a 76% increase in revenue to ZWL$ 72.91bn from ZWL$41.45bn.
Profit grew 71% in the reviewed period to ZWL$9.58bn from ZWL$5.6bn.
Delivery sales grew by 45% against the same period last year, contributing significantly to Simbisa’s overall financial performance.
Cash generated from operations was ZWL$21.7bn, up 342% from last year and ZWL$18.7bn was spent on investing activities, of which ZWL $6.3bn was spent on capital expenditure in Zimbabwe and Kenya.
