Simbisa revenue will grow 25% to US$290m in FY23 on aggressive expansion, says broker

Rapid expansion and higher customer counts will drive Simbisa’s revenue up by 25% and deliver a 20% growth in profits this year, analysts at IH Securities say.   

Simbisa, the country’s biggest fast-food company, is currently in one of its most aggressive expansion projects yet. The company announced last year that it was spending US$27 million to widen its footprint in Zimbabwe and other markets such as Kenya.

Despite disruption from COVID-19 and pressure on incomes, the number of customers that Simbisa has served grew from 28 million in 2021 to over 36 million last year. IH Securities sees the company sustaining annual growth in customer count of 8.2% over the next five years.

“We believe our forecasts are more on the conservative side considering the Group is looking forward to roll out about 87 new stores in FY23 alone,” the analysts say in a new report on Simbisa.

“We forecast revenue will increase by 25% in FY23 to circa $290 million. EBITDA is expected to grow 20% to US$49 million over the same period. We believe the cost-containment measures adopted during the COVID-19 pandemic can be sustained moving forward.”

Simbisa’s new projects show its aggression in taking over prime locations. A food court being built at the corner of Cork Road and King George in Harare is across the road from a Chicken Slice drive-through. Simbisa has also recently opened an outlet at Harare’s Westgate Mall, where KFC already has a store.

According to IH, Simbisa’s “substantial investment pipeline, with 180 potential projects identified over the next two financial years, will drive growth and unlock shareholder value.”

Simbisa recently joined the queue to list on the USD-denominated VFEX, hoping this would help it raise more expansion capital.