Simbisa Brands, the country’s biggest fast foods company, added 27 new outlets in the past year and plans a further 45 as part of a US$23 million expansion.
The company, which owns brands such as Chicken Inn, served 28% more customers in the year to June than it did in the previous year, despite rising inflation putting pressure on incomes.
“During the period under review, the group focused its growth strategy on the two largest markets, Zimbabwe and Kenya, adding 27 stores and 39 stores respectively,” Simbisa says in its latest annual financials.
“The group has a significant pipeline of new stores and expects to open 87 new stores in FY23, mainly in Zimbabwe (45) and Kenya (30) at a cost of about US$23 million. The group is generating sufficiently strong free cashflows to drive this growth.”
Revenue increased by 48% in Zimbabwe, driven by the 28% growth in customer count. Of the Z$21.7 billion generated from operations, which was up 342% from last year, Z$6.3 billion was spent on capital expenditure in Zimbabwe and Kenya.
The company is raising its own money and does not access forex on the RBZ auction. But Simbisa wants to see some policy changes, including a cut on interest rates, raised to 200% in June, and the tax on electronic money.
Says Simbisa: “The Group commends efforts by the Reserve Bank to stabilise the country’s local currency in the period after the Group’s reporting date. However, the Group urges the Reserve Bank of Zimbabwe to review minimum productive sector lending rates which are currently set at 200% as this may stifle growth in the medium term.”
There is “a dire and urgent need to address the current and unnecessarily punitive Taxation laws in particular Intermediated Money Transfer Tax”, the company says.
In presenting its accounts, Simbisa did not use RBZ’s auction exchange rate, agreeing with many critics who see that rate as overvalued. Instead, Simbisa used an exchange rate “based on the market transaction rates”.
Simbisa is rewarding shareholders with a final dividend of US0.58 cents per share.