Simbisa gets stronger as it grows its regional footprint

AS a pan-African entity, Simbisa retains its roots in Zimbabwe where it derives about 50% of its turnover. Simbisa is an offshoot of Zimbabwe Stock Exchange (ZSE)-listed Innscor, whose name is derived from Simbisa’s (then a subsidiary) Quick Service Restaurants (QSR) business.

In 1998, Innscor listed on the ZSE utilising the QSR business to spread its footprint into Africa as a diverse pan-African operation. Fastforward to 2022 Simbisa now operates in nine countries which include Zambia, Kenya and Mauritius.

At one point the company operated in 11 African countries and even explored a cross continental partnership and listing on the London Stock Exchange (LSE).

In Kenya, a fast-growing market, Simbisa asserted its position as the market leader expanding its stores footprint by 38 stores in 2022 to 206.

In 2021 the company reported that in Kenya it operated 40 Chicken Inns, three of which were drive throughs, 47 Pizza Inns, 34 Creamy Inns, 16 Galitos, five Bakers Inns and 26 others. Revenues in the respective market grew by 33% in real terms on the back of a 32,8% increase in customer count and a 5% increase in real spend per customer. Part of the growth story in the Kenyan operation lies on the splurging delivery business Kutuma Kenya, which has been working on improving efficiencies so at improve competitiveness.

e sub-unit now contributes over 25% to total unit revenue. In furthering the delivery business’ fortunes within the Kenyan market a strategic decision was made to transition Pizza Inn Kenya to deliver exclusively on the Dial-aDelivery platform in Kenya, effective September 1, 2022. is will go a long way in bolstering Simbisa Kenya’s earnings performance.

Simbisa’s strategy is that of expanding Zimbabwe and Kenyan markets more rapidly with 75 stores targeted for opening between the two countries, in the current financial year. e company is also focused increasing revenue streams within the market through delivery channels and growing the market share through new store openings.

Simbisa said it will pay particular attention to penetrating the market in areas currently under-serviced by its particularly in small towns and high-density areas. Several Chicken Inn Drive- rus are in the pipeline.

In Zimbabwe, the group is exploring introducing the Drive-through concept for other brands such as Nando’s and Steers.

It has not been all rosy for Simbisa over the years, the company has had to restructure some of its stores by closing some in areas where viability was no longer present. is has especially been so in Zambia and DRC which were had been exposed to much economic volatility over the year.

With Zambia challenges with currency stability resulted in sustained losses over a protracted period resulting in the structuring. Simbisa also failed to see through the acquisition of a United Arab Emirates (UAE) fast food operator Foodfund, which is a family owned business. the deal was to be consummated utilising a placement of shares on the LSE, where the group sought a secondary listing. the deal failed to materialise as the company cited a lack of shareholder buy-in.

What made Simbisa an outlier in the period under review is its strong financial showing, have shaken off the adverse impacts of Covid-19, which sure dragged some business into oblivion. e company reported an overall 76% surge in inflation adjusted earnings and a 71% attributable profit growth over the period. e strong showing is largely as a result of growth in customer count, increased spend per count and the expansion in footprint evidenced by the surge in the number of stores.

Simbisa has announced an intention to migrate to the VFEX from the ZSE and this too will help drive future growth, given the need to attract foreign currency capital for expansion in the future as well as the various incentives tabled by the Treasury.