Sim­bisa aims for sec­ondary AIM list­ing

The Star Early Edition - - COMPANIES - Tawanda Karombo

ZIM­BABWE and sub-Sa­ha­ran Africa fo­cused fast foods oper­a­tor, Sim­bisa Brands – which holds fran­chises for Nando’s, Chicken Inn, Steers and Pizza Inn – is seek­ing a sec­ondary list­ing on Lon­don’s AIM mar­ket.

Sim­bisa Brands was un­bun­dled and sep­a­rately listed on the Zim­babwe Stock Ex­change in 2015 by Innscor Africa, one of the highly cap­i­talised coun­ters on the Harare bourse. It has quick-serve restau­rant op­er­a­tions in coun­tries such as Mau­ri­tius, Ghana, Kenya, Zam­bia, Namibia and DRC among oth­ers.

How­ever, its ma­jor mar­ket has re­mained in Zim­babwe and the board of Sim­bisa has now ap­proved the move to a Lon­don list­ing al­though this now awaits reg­u­la­tory ap­provals.

“Share­hold­ers are ad­vised that the Sim­bisa Brands board of di­rec­tors has ap­proved, sub­ject to Re­serve Bank of Zim­babwe, other reg­u­la­tory ap­provals and share­holder’s ap­proval, the ap­pli­ca­tion for a sec­ondary list­ing of Sim­bisa’ or­di­nary share cap­i­tal on the Lon­don Stock Ex­change Al­ter­na­tive In­vest­ments Mar­kets (AIM) in or­der to ac­cess ad­di­tional fund­ing for the Com­pany’s ex­pan­sion,” Sim­bisa Brands said in a cau­tion­ary no­tice yes­ter­day.

Mar­ket watch­ers said they ex­pected the reg­u­la­tory ap­provals to be se­cured. The com­pany has ear­marked ex­pan­sion both in­side and out­side Zim­babwe to boost its prospects.

Ad­ding­ton Chi­nake, the chair­per­son of Sim­bisa Brands, has said that “the com­bined rev­enue for the re­gional op­er­a­tions in­creased by 10 per­cent to $30.2 mil­lion” (R390m) in the full year to De­cem­ber 2016.

An­a­lysts at Ex­otix have fore­cast rev­enue and earn­ings be­fore in­ter­est, taxes, de­pre­ci­a­tion and amor­ti­sa­tion (Ebitda) earn­ings of $157m and $19.2m re­spec­tively, for the full year to June 2017. This is ex­pected to yield a year on year growth of 7 per­cent and 34 per­cent on rev­enue and Ebitda, re­spec­tively.

And cou­pled with a sec­ondary list­ing in Lon­don, Sim­bisa Brands is ex­pected to be in a strong po­si­tion to fund ex­pan­sion.

How­ever, Ex­otix said in a note on the com­pany re­cently that “ex­pan­sion tar­gets are not set in stone, as they will de­pend on op­por­tu­ni­ties in each in­di­vid­ual mar­ket” while “Zim­babwe has a very un­cer­tain out­look”.

But Sim­bisa said in its cau­tion­ary note that it was pur­su­ing an ac­qui­si­tion. The tar­get was an in­ter­na­tional com­pany in the same fast foods in­dus­try.

“Share­hold­ers are also ad­vised that Sim­bisa is cur­rently in ne­go­ti­a­tions for the ac­qui­si­tion of an in­ter­na­tional com­ple­men­tary busi­ness,” the com­pany said.

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