HARARE – The Zimbabwean and regional franchise operator of the Nando’s, Steers and Mugg & Bean counters has exited the Democratic Republic of Congo (DRC), citing operational risks although profits attributable to shareholders have shot up by 107 percent to $14.2 million (nearly R202m) in spite of difficulties occasioned by elections in Zimbabwe and Kenya.
Simbisa Brands also revealed that it had postponed its planned listing on London's AIM market and also delayed the acquisition of Foodfund.
This is despite an approval by the board of the company in March to proceed with the acquisition of Foodfund and list in London.
“Shareholders are advised that the parties to the sale and purchase agreement for Foodfund have agreed that the acquisition as currently structured be amended due to the postponement of the proposed secondary listing,” Adiel Chinake, the non-executive chairman of Simbisa, said yesterday.
This capped a somewhat difficult corporate year for the company after it also moved out of the DRC, which has been hobbled by economic upheavals emanating from the country's elevated political risk profile.
The country is scheduled to hold elections in December to choose a replacement for Joseph Kabila.
Chinake said that due to continued macro-economic challenges and the rising financial and operational risk of operating in the DRC, the company had disposed of its interest in that country.
In Kenya and Zimbabwe, elections also “destabilised the socio-political environment in the two markets”.
“Trading conditions in Zimbabwe were marred by persistent liquidity pressures although financial inclusion and formalisation of the retail sector driven by the availability and acceptance of plastic and mobile money have eased some of the transactional pressures on the Zimbabwean consumer and driven growth in the consumer facing sector,” he added.
Revenues from its operations in Zimbabwe and the region increased by 33 percent to $204.7m, while it now planned to consolidate its expansion into casual diner outlets in Zimbabwe, Zambia and other markets.
This was boosted by “increased customer counts” as well as “increased average spend”.
The company said customer counts increased to more than 56 million in the year under review compared with 53 million in the previous year, after customers per counter increased by 10 percent to 122 448.
Operating profits shot up by 60 percent to $28.1m, while basic earnings per share were stronger by 107 percent at 2.55 cents.
Simbisa spent as much as $11.1m, mainly on expansion in Zimbabwe and Kenya.
Despite the setbacks, which saw it move out of the DRC and delay acquisition of Foodfund, Simbisa Brands has lined up other expansion projects, such as strengthening its casual restaurant category with the acquisition of Mugg & Bean and Ocean Basket in Zimbabwe and Zambia.