• The group acquired the Eswatini business which was once a franchisee
  • The group further restructured operations in Ghana, Mauritius and Zambia
  • Revenue went up by 7.4%

Harare- Simbisa Brands, a well-known quick-service restaurant group, has expanded its footprint across the region by acquiring the Eswatini business which was previously a franchisee and further franchised its operations in Zambia, Ghana and Mauritius. According to the half-year financials to full year 2024, these markets were underperforming mainly due to global economic fragmentation which is hitting Africa at large courtesy of geopolitical tensions and a slow down in European and Chinese economy. 

To bolster the franchised markets and the latest Eswatini acquisition, Group has appointed Nabil Mankarious as an independent Non-Executive Director. Mankarious brings a wealth of experience and expertise in the food and hospitality industry in Europe, including the UK, Italy, and Greece. His knowledge will help protect the Group from potential shocks. However, Simbisa should be aware that challenges faced in Europe may differ from those in Africa, and therefore, operations and challenges need to be carefully examined in the local context.
One of the biggest advantages of franchising that Simbisa will gain is expanding into respective markets quickly and efficiently. By partnering with local franchisees who have a better understanding of the local culture, market dynamics and consumer preferences. In this way, Simbisa will penetrate the foreign markets more effectively than if they were to establish their own operations, the way they once did. 
In terms of revenue performance, the company experienced a 7.4% growth for the period. The notice reveals that the revenue increased from US$136.62 million to US$146.76 million in the corresponding period.
Simbisa is among the few companies listed on the Victoria Falls Stock Exchange, which is operating profitably. Despite the challenging economic conditions faced by other prominent companies like Econet, Caledonia, or CBZ Holdings, Simbisa has managed to maintain its profitability. This indicates that the chicken business, which is the core of Simbisa's operations, remains highly profitable in Zimbabwe. Simbisa is the largest fast-food outlet in Zimbabwe, featuring popular brands such as Chicken Inn, Pizza Inn, Bakers Inn, Steers, Nandos, and Rocco Mammas.
The Zimbabwean economy is heavily impacted by various challenges, including a foreign currency liquidity crisis, a crisis involving the Zimbabwean dollar, a burdensome taxation system, and a significant management crisis. Overcoming these hardships requires effective management that possesses a forward-thinking approach rather than focusing solely on continuity.
However, Simbisa has successfully navigated through these difficulties and sustained positive earnings. One of the major advantages enjoyed by Simbisa is that most of its products are sold in US dollars, making them more affordable compared to Zimbabwean dollars. Consequently, Simbisa faces fewer exchange losses compared to companies like Econet or CBZ.
In other terms of financial operations, cash generated from operations increased to US$21 million from US$17 million, reflecting proper and up-to-date management. Additionally, liabilities decreased by 19.6% to US$89 million from US$111 million, indicating a low gearing ratio and the company's ability to finance activities using internal cash. This further demonstrates effective management.
As a result, headline earnings per share saw a marginal increase from 1.72 cents to 1.73 cents. However, due to the addition of new businesses, some through franchising, and ongoing economic fragmentation, the declared dividend marginally decreased to 62 cents from 88 cents in the previous period.
Looking ahead, the company expects increased income from franchised branches and acquisitions in Eswatini. However, profits from new outlets may be delayed due to market penetration efforts.
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