Simbisa says liquidity constraints in Zim restrict 1Q17 top-line performance
HARARE, Simbisa Brands says liquidity constraints in its largest market – Zimbabwe – and weak commodity prices regionally restricted the group’s topline performance to a marginal growth in the first quarter (Q12017) ended 30 September 2016.
In a trading update at the Group’s annual general meeting, Chief Executive Officer Basil Dionisio said that in spite of the challenges in the top-line, foreign exchange rates in regional markets had stabilised and the group would continue to look for growth to improve on profitability.
During the quarter, number of counters grew 10% on prior quarter and the net number of customers increased 4% quarter on quarter.
“However, we note that the average spend for the same period was down 12% mainly due to the deteriorating macro-economic conditions in our largest market, Zimbabwe,” he said.
Dionisio said despite the challenges, headline earnings for the same period is marginally up. He added that trading on October maintained the same trend of the quarter under review.
The group according to Dionisio will continue to grow counters in markets which it is currently operating mainly in Zimbabwe and Kenya.
Simbisa Brands Group arose from the unbundling of the Innscor Africa Limited Quick Service Restaurant business in October 2015. Simbisa currently operates 415 QSR restaurants in 11 countries across Africa with future ambitions of further expansion across the region.
The operations are in Zimbabwe, Zambia, Kenya, DRC, Ghana, Malawi, Namibia, Botswana, Mauritius, Swaziland and Lesotho, with the local market being the largest.
Simbisa Brands Limited group revenue for the 9 months period ended 30 June 2016 declined 5% to $108.3 mln compared to $114 mln same period in 2015 due to reduced contribution from regional operations as a result of loss of value in their currencies against the US Dollar.
Meanwhile, at the AGM directors and audit remuneration were approved at $83 685 and $178 279.