Harare - Cautionary Statement: Bridgefort; ZBFH

·         Cautionary Statement: Bridgefort; ZBFH

·         AGM Results: Ariston

·         Circular to Shareholders: Edgars

·         Financial Results: Truworths; Simbisa

Bridgefort Capital Limited issued a Cautionary Statement on the 1st of March 2024, announcing that the company is in the later stages of concluding the acquisition of Diaspora Kapita (Proprietary) Limited and its related subsidiary companies, a predominantly South African business. The underlying businesses to be acquired are involved in financial services and fintech, and the ongoing transaction involves the disposal of the BridgeFort Capital Limited interest in the current underlying asset, being MedTech, the transfer of the listing to the Victoria Falls Stock Exchange and then the immediate acquisition of 100% of Diaspora Kapita (Proprietary) Limited.

ZB Financial Holdings issued a 12th Cautionary Statement announcing that one of the company’s shareholders is still in negotiations for a potential acquisition of a control block of securities. The process is at an advanced stage and regulatory approval is yet to be obtained for the transaction. If the transaction goes forward, it may have a material effect on the Company’s securities price and therefore, the investing public and shareholders are advised to exercise caution when dealing in the Company’s securities.

AGM Results: Ariston

At the 77th Annual General Meeting held on Thursday 22 February 2024, Ariston passed all the resolutions, including the re-election of two directors, Mr. C. P. Conradie and Mr. J. W. Riekert who were retiring by rotation in accordance with the provisions of the Company’s Articles of Association.

Circular to Shareholders: Edgars

Edgars Stores Limited said it will hold an Extraordinary General Meeting (EGM) of the members of the Company virtually at 1000 hours on Friday, 22 March 2024. The EGM follows a resolution in support of the termination of Edgars’ Zimbabwe Stock Exchange Listing, with the intent to list the Company’s shares on the Victoria Falls Stock Exchange by way of Introduction. Edgars highlighted a number of benefits of migrating from the ZSE to the VFEX, and these include enhanced accessibility to US$ capital and expansion of investor base; reduced trading costs; greater liquidity of shares; additional tax incentives; less restrictions on the repatriation of dividends for foreign shareholders; efficient financial reporting; and mitigated valuation volatility and improved performance benchmark.

Financial Results: Truworths; Simbisa

In a financials report for the full financial year ended 09 July 2023, Truworths reported a 33.8% decline in units sold, compared to a 9.5% growth recorded in the previous year. The decline was attributed to the suspension of ZWL credit from 01 July 2022 as the business largely dwells on credit facilities for members. Subsequently, the Company introduced a US$ credit facility in February of 2023. The rise in informal retailers resulted in cheap and fake imports, further exacerbating pressures on Edgars’ sales volumes. Due to the suspension of the credit facility, credit sales fell from a foothold of 34% of aggregate revenue in 2022 to 18% in the year under review, while cash sales increased from 66% to 82% of the total revenue. In a hyperinflationary economy, an increase in cash sales ought to be commendable as it shields the company from time-value loss. However, in the case of Edgars which depends on credit sales amid low disposable incomes, this development weighs on solvency.

In the half-year ended 31 December 2023, Simbisa Brands Limited opened 37 new stores, bringing the total network to 568 owned and operated restaurants across Zimbabwe, Kenya, and Eswatini (655 stores including franchised markets). Resultantly, the Group registered a 7% surge in revenue to US$147 million, with Zimbabwe recording a 10% growth and the rest of the region recording 2%. Overall margins firmed up, with the operating profit rising by 22% to US$21.4 million in the period under review. However, Simbisa suffered a 19% increase in operating expenses owing to increased dollarization of the economy. Furthermore, Simbisa’s presence in Zimbabwe and Kenya where the local currencies are rapidly losing value comes as a headwind to operations. The increased operating costs in Zimbabwe is attributable to currency volatility, while Kenya revenue fell by 5% in US$ terms due to currency devaluation. On the other hand, Simbisa completed the acquisition of the Eswatini business which was previously a franchised market in a bid to maximise returns while lowering exposure to exchange losses emanating from premium payments.

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