Harare – Zimbabwe Stock Exchange – listed quick service restaurant group, Simbisa Brands Limited has reported a 91% overall growth in revenues to ZWL$390.8 million compared to ZWL$204.7 million in the previous year.
Contributing to this performance was the positive contribution from its regional operations where customer counts grew by 6% year on year and average spend in USD remained firm despite currency devaluation experienced in Ghana and Zambia where the respective local currencies dropped 13% and 29% against the US dollar.
“Revenue generated by our regional operations increased 12% year-on-year in USD-terms and 118% from prior year in Zimbabwe Dollar terms to $135.9 m ($62.4 m in FY2018),” Group Chief Executive Basil Dionisio said in a statement.
“Regional operating margins improved from 7.3% in FY2018 to 8.1% in FY2019.”
Simbisa, largely known for its flagship Chicken Inn and Bakers Inn brands, reported subdued sales volumes and reduced customer spending in its Zimbabwe operations, an effect of the deteriorating economic conditions in the country.
“High and escalating inflation and foreign currency exchange rates are putting downward pressure on Gross Profit and Operating Margins,” Mr Dionisio said.
“Customer counts dropped 5% year-on-year as a result of the aforementioned pressure on consumers which has dampened consumer spend across the entire Zimbabwe consumer sector,” he added.
Revenue generated from Zimbabwe operations increased by 79% to ZWL$255.1 million compared to ZWL$142.3 million in 2018 due to inflationary-driven price adjustments.
Same store revenue increased 72% versus the prior year.
Meanwhile, the Group said prospects in Kenya operations having overseen expansion projects in that market and closing the period under review with 141 counters in operation.
Mr Dionisio said Kenya is a key growth market in the Group’s regional operations due to a growing middle-class population, high and improving consumer income levels and stability in the trading environment.
“The Group will achieve organic growth through expansion of our existing brand footprint and remains vigilant to growth opportunities arising through new business acquisitions and partnerships,” he said.
On the outlook, the Group expects the volatility in the Zimbabwe business operating environment to persist, but remains optimistic that the business is well prepared to shelve the challenges and deliver value to its stakeholders.
“Our people have the drive, experience and expertise needed to execute our strategy and successfully navigate the business through a challenging operating environment,” Mr Dionisio said.
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Raynold Mhotseka is a Journalism and Media Studies student at the University of Zimbabwe. He serves as a news writer at financial research firm, Equity Axis where he is currently on attachment. He can be contacted through the following email links, email@example.com and firstname.lastname@example.org.