BUSINESS REPORTER
Simbisa Brands Limited says it achieved strong financial results in the six months to December 2022 largely due to robust pricing strategy which allowed it to keep pace with the rate of inflation and exchange rate.
“A robust and proactive strategy allowed Simbisa to remain resilient, despite these challenges,” Simbisa CEO, Basil Dionisio, said.
He added: “The trading environment in Zimbabwe in the second half of 2022 was characterised by continued inflationary pressures, exchange rate disparities and significant power outages due to very low national power generation capacity. Despite these challenges, Simbisa’s Zimbabwe operations achieved a stellar set of results with double-digit top-line growth and more than doubled profitability compared to the prior year.”
Dionisio said challenges also prevailed in Simbisa’s regional operating markets emanating from high global inflation, supply chain disruptions and exchange rate volatility.
“Simbisa implemented a pricing strategy during the period under review that resulted in menu price increments, executed in a minimal and phased approach to minimise the impact on the price-sensitive consumer. This enabled the group to keep pace with inflation and exchange rate devaluation to grow real average spend in all markets, with the exception of Ghana,” he said.
Dionisio said despite economic headwinds with significant currency devaluations and record-high inflation levels in our operating markets, the group has managed to grow the business to record levels.
The group remains focused on diversifying revenue streams by growing its market share in the casual dining sector and increasing the revenue contribution from deliveries with the former being steadily being implemented through the opening of eight casual dining restaurants in half year 2023, with a further 10 set to be opened during the full year, he said.
Revenue increased 23% to US$146.16m from US$119,072m while profit after tax increased 32% to US$17,404m during the period under review from US$13,199m during the comparable period.
Simbisa has a substantial investment pipeline, with 48 net new counters set to open in the second half of this year and a further 103 sites identified for 2024, will drive growth and unlock shareholder value.
“The primary growth markets in the short to medium term will be Kenya and Zimbabwe. However, the group remains vigilant of new growth opportunities in existing and potential new markets and continues exploring business development options,” Dionisio said.
