Simbisa doubles profit, mourns Zim income erosion
FAST foods chain, Simbisa Brands, said yesterday it recorded a 134 percent jump in after-tax profit to $32.4 million in the full year ended 30 June 2019 compared to the prior year despite a slump in volumes in its main market in Zimbabwe.
During the period, the group, which runs popular chains such as Chicken Inn, Pizza Inn and Bakers Inn, recorded a 91 percent increase in revenue to $391 million.
With operations in seven countries, Simbisa Brands chairman Mr Addington Chinake said erosion of purchasing power in Zimbabwe had seen consumers cutting back on fast foods.
“Deteriorating economic conditions in Zimbabwe have resulted in the erosion of consumer earnings, which have negatively impacted our sales volumes and seen a general trend of customer downtrading,” he said.
Pressures were also faced in Kenya and Zambia, Mr Chinake said, but was optimistic the situation would stabilise in the medium term.
The chain opened new stores in the Democratic Republic of Congo, Zimbabwe and Kenya during the period and is looking to further expand its footprint in the region.
“All of our regional operations registered growth in operating profit and firming operating margins during the period under review with the exception of Mauritius where increased competition and stock cost control issues have brought margins under pressure,” chief executive Mr Basil Dionisio said.
Ghana and Namibia make up the rest of the countries in which the Zimbabwe Stock Exchange-listed Simbisa Brands also has operations.
“Kenya has been identified as a key growth market in our regional business due to a growing middle-class population, high and improving consumer income levels and stability in the trading environment,” Mr Dionisio said.
Currency volatility remained the group’s biggest risk in the regional markets, he said.
The company declared a 0.91 cents dividend for the period.
Profit attributable to shareholders was up 127 percent to $32.14 million while basic earnings per share were up 126 percent to 5.77 cents. — New Ziana