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Nelson Gahadza

Senior Business Reporter

Victoria Falls Stock Exchange (VFEX) listed Simbisa Brands says it will invest US$22 million to open 92 new stores in the 2024 financial year, with a primary focus on Zimbabwe and Kenya.

The company is the largest fast-food restaurant operator in Zimbabwe and owns, operates, and franchises a number of well-known Quick Service Restaurant brands.

Simbisa Brands has an extensive footprint in Africa, with outlets in Zimbabwe and 10 African countries, including Kenya, Ghana, Mauritius, Botswana, the DRC, Malawi, Swaziland, Lesotho, and Zambia.

Group chairman Addington Chinake, in the company’s financials for the year ended June 30, 2023, said the group sees significant growth opportunities in its largest markets for its flagship brands.

“A substantial investment pipeline, with 92 net new counters set to open in FY 2024, will drive growth and unlock shareholder value.

“In the short to medium term, the primary growth markets will be Kenya and Zimbabwe. However, Simbisa remains vigilant of new growth opportunities in existing and potential new markets and continues exploring business development options,” he said.

Mr Chinake said Simbisa continued to focus on organic growth, rolling out 69 new counters between June 30, 2022, and June 30, 2023.

He said following the successes of the re-modeling exercise undertaken in Mauritius, Simbisa embarked on an exercise to reorganise the regional business excluding Kenya to streamline the brand portfolio in each market and operate only the most successful core brands to give complete focus and attention to these brands, optimize the customer experience, and maximize shareholder returns.

“This resulted in the closure of 28 counters in the non-core brand category, closing the period with 646 counters (578 company-operated and 68 franchised) as of June 30, 2023,” he said.

Group chief executive Mr. Basil Dionisio said Simbisa implemented a pricing strategy during the year under review that resulted in menu price increments, executed in a minimal and phased approach to minimise the impact on the price-sensitive customer.

He said this enabled the group to keep pace with inflation and exchange rate devaluation to grow real average spending in all markets, with the exception of Ghana.

“The re-modeling efforts to achieve a brand-focused approach to operations have already shown success.

“Organic growth in the core brands in the year under review resulted in a 17,6 percent year-on-year increase in group customer counts,” he said.

He added that this, together with growth in real average spend, resulted in a 22,7 percent increase in group revenue in FY2023 compared to the prior year.

In Zimbabwe, Mr Dionisio said the operating environment benefited from relative stability in the local currency during the period under review, with considered money supply control resulting in rates holding steady ahead of the August 2023 elections.

He said that following the normal to above-normal rainfall experienced in Zimbabwe during the 2022–23 summer cropping season, a high agricultural outturn is expected to buoy consumer spending.

“This will be further supported by the increasing contribution to gold production by small-scale miners, resulting in overall growth in the sector,” he said.

Customer counts in Zimbabwe increased by 24,2 percent in the FY 2023 period compared to the prior year period, buoyed by promotional activity, value offerings, and continued organic expansion, with a net of 18 new counters opened over the period under review.

Mr Dioniso said the drive to increase delivery capacity through the scaling of operations has been successful, with the total number of deliveries increasing 53 percent in FY 2023 compared to the prior year, despite generally depressed consumer income levels in the market.

“The increased contribution from deliveries has supported real average spend growth, which increased 7,9 percent year-on-year, resulting in top-line growth of 34,1 percent against the prior year,” he said.

Mr Dionisio said the InnBucks restructure has been a great success, and the platform continues to be widely used, which shows that people have accepted and trusted it.

“Our growing footprint across the country provides an acceptable and easily accessible alternative form of banking in a country with a largely unbanked population.” Simbisa Brands has had a strong year, recording good overall revenue and Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA growth of 23 percent and 9 percent, respectively.