Simbisa profit up 109 percent, defies macroeconomic challenges

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    Harare – Pan African and Zimbabwe Stock Exchange listed (ZSE) fast foods operator Simbisa Brands released impressive half year earnings on Thursday, as disciplined cost of sales management and controlled price adjustments filtered through.

    Simbisa is a fast food outlet company in Africa with its roots in Zimbabwe. The company was a subsidiary of the Innscor Africa Limited group until 2015 when it was unbundled and listed separately on the ZSE.

    In Zimbabwe, Simbisa operates quick restaurant brands such as Chicken Inn, Pizza Inn, Nandos, Steers and Creamy Inn. It also has operations in Zambia, Kenya, Ghana, DRC, Malawi, Namibia, Botswana, Mauritius, Swaziland and Lesotho.

    Profit for the period jumped 109 percent to US$16.5 million from US$8 million achieved in the same period in 2017.

    Revenue came in at US$143.3 million compared to US$99.3 million achieved in the prior year, representing a growth of 44 percent.

    Operating profit was up 82 percent to US$27.4 million against US$15.1 million achieved in the comparative period in 2017.

    “Despite challenges in this market, our experienced management team’s efforts combined with a robust business model have allowed the Group to defend our market share and continue to grow the business,” Simbisa CEO Basil Dionisio said in a statement accompanying the financials.

     “We continue to generate value for our stakeholders through delivery of consistent, quality restaurant experiences to our valued customers,” he added.

    The increased profit saw basic earnings per share rose by 100 percent to 2.92 US cents from 1.46 US cents in the comparative period last year.

    Total assets grew to US$104.6 million from US$84.9 million while total liabilities also increased from US$46.7 million to US$53.2 million.

    In the outlook, the company expect the challenges in the trading environment to persist, particularly in Zimbabwe where further price increases, labour unrest and continued uncertainty continue to disrupt the normal course of business.

    “However, as in the period under review we remain confident that our experienced management team will continue to take pro-active measures to ensure we grow the business and deliver,” said Dioniso.

    Revenue attributed to Zimbabwe operations increased by 55 percent year on year across existing stores with a further contribution from 8 new counters opened during the period to bring total revenue during the six month period to US$108.65 million, up 60 percent on prior year.

    “The Group has managed to maintain GP margins and though disciplined cost management have increased Operating Profit Margins to 22.6% in H1 FY2019 (17.7% in H1 FY2018) resulting in a 105% year-on-year increase in Operating Profit to US$24.53 million,” said Dioniso.

    In the outlook, the company seeks to grow quick service restaurants in existing and new African markets, to develop and acquire brands in the quick service and casual dining segments.

    -Equity Axis News

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