Sim­bisa prof­its dive

Chronicle (Zimbabwe) - - Business Chronicle -

SIM­BISA Brands on Tues­day re­ported a 23 per­cent drop in af­ter tax profit at $3 mil­lion for the nine months to June 30 2016 com­pared to $3,9 mil­lion in the prior pe­riod last year af­ter re­gional op­er­a­tions per­formed be­low ex­pec­ta­tions.

Sim­bisa is a sep­a­rately listed Quick Ser­vice Restau­rant unit of Innscor Africa Lim­ited with op­er­a­tions that span across six African coun­tries. It re­cently en­tered the Mau­ri­tian mar­ket but group per­for­mance is largely an­chored on Zim­babwe’s op­er­a­tions.

Its fi­nan­cial year started from Oc­to­ber 1 af­ter un­bundling from Innscor, but has adopted a June 30 year end.

Sim­bisa Brands chief ex­ec­u­tive, Basil Dion­i­sio told an­a­lysts yes­ter­day af­ter­noon that the group’s brands have re­mained strong de­spite ad­verse trad­ing en­vi­ron­ments in the mar­kets it op­er­ates in.

“We are grow­ing in store cov­er­age and we be­lieve Sim­bisa is set to pro­vide com­pelling share­holder re­turns over the long run. In the past fi­nan­cial year alone, our net growth in coun­ters was 56 across all our mar­kets tak­ing store count to 414,” he said.

Group rev­enue for the pe­riod de­clined five per­cent to $108,3 mil­lion com­pared to $114 mil­lion same pe­riod in 2015 largely as a re­sult of loss of value in re­gional cur­ren­cies against the US Dol­lar which is the com­pany’s ac­count­ing cur­rency.

Zim­babwe’s op­er­a­tions con­trib­uted 62 per­cent to to­tal rev­enue at $67 mil­lion while re­gional op­er­a­tions came in at $41 mil­lion. Lo­cally the group has 188 coun­ters and 196 coun­ters in the re­gion.

Dion­i­sio said dur­ing the pe­riod, the group in­tro­duced new in­no­va­tive prod­ucts across the ma­jor brands and is con­sis­tently re-en­gi­neer­ing the menus so that they ap­peal to the or­di­nary cit­i­zen in or­der to counter the ex­pected drop in av­er­age spend.

Dur­ing the nine months, Sim­bisa opened seven new coun­ters in Zim­babwe but said new store roll-outs will be lim­ited to lo­ca­tions with po­ten­tial of achiev­ing av­er­age prof­itabil­ity mar­gins.

In the re­gion, op­er­a­tions in Kenya, Zam­bia, Ghana, DRC and Mau­ri­tius con­trib­uted 38 per­cent of group rev­enue but un­favourable for­eign cur­rency move­ments against the USD con­tinue to af­fect earn­ings.

Re­gion­ally, Sim­bisa opened 17 new coun­ters in Kenya which is the sec­ond largest mar­ket af­ter Zim­babwe. The com­pany also opened seven new coun­ters but closed five in Ghana to bring to­tal in that coun­try to 20 while 13 were opened in Mau­ri­tius. In DRC, Sim­bisa has 10 coun­ters af­ter open­ing two in the pe­riod un­der re­view. — The Source

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