Simbisa doubles profit, mourns Zim income erosion
Harare, (New Ziana) – Fast foods chain, Simbisa Brands said on Tuesday it recorded a 134 percent jump in after-tax profit to $32.4 million compared to the prior year despite a slump in volumes in its main market in Zimbabwe.
During the period, the chain – 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 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, 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 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
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,”
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