SIMBISA Brands, Zimbabwe’s largest fast-food restaurant operator, has set a target of having 680 stores by the fiscal year ending 30 June 2023, as part of an expansion programme.
PRISCA TSHUMA
In a statement accompanying the group’s first half-year financial statements on the Victoria Falls Exchange (VFEX), chairperson Addington Chinake (pictured) said the company plans to open 49 more stores in the remaining six months, adding to the current 631, to close the fiscal year with 680 stores.
Chinake said the company opened 46 new counters between 31 December 2021 and 31 December 2022 to close with 631 counters.
“The group expects to open a further 49 stores to close the financial year with 680 stores. The board will continue to invest any additional free cash generated in strategic assets to achieve the group’s overall target growth trajectory,” said Chinake.
On 18 November 2022, Simbisa delisted its ordinary shares from the Zimbabwe Stock Exchange (ZSE) and listed on the VFEX on 2 December 2022. The group migrated the local currency bourse to gain access the US dollar capital on the VFEX market and increase shareholder value.
Following the listing on the VFEX, which is a US dollar-denominated stock exchange, the group adopted the US dollar as its reporting currency, in terms of IAS 21. The group adopted the US dollar to enhance the usefulness of the financial statements to the group’s stakeholders.
In addition, the group re-assessed its functional currency determination and concluded to change it from the Zimbabwe dollar to the US dollar. The functional currency is the currency of the primary economic environment in which the entity operates.
“The re-assessment was triggered by operational and regulatory changes in the monetary landscape in Zimbabwe,” said the chairperson.
In July 2022, the Reserve Bank of Zimbabwe (RBZ) effectively increased the minimum lending rates for corporates from 80% to 200%, for all local currency borrowings.
Additionally, the RBZ directed that 25% of the unutilised export proceeds would be liquidated at the willing-buyer willing-seller exchange rate after 120 days from the date of receipt.
In the same month, the central bank introduced gold coins in a bid to tame the local currency liquidity in the market.
The RBZ sold more than 90% of the coins were sold in Zimdollars, which mopped up the excess local currency liquidity in the market, resulting in most transactions within the economy being conducted in US dollars.
In his 2023 Monetary Policy Statement on 2 February 2023, the RBZ Governor reported that 70% of the economy’s transactions were being completed in US dollars, whilst 65% of customer deposits for the banking sector are in US dollars, which was evident in Simbisa’s revenue and expenditure within the period under review.
Group revenue increased by 24% to US$146 million from US$117 million. The business achieved a 20% overall growth in operating profit. Growth Revenue increased by 31% in Zimbabwe boosted from an increase in customer counts of 38.4%.
Meanwhile, the board declared an interim dividend of 0.88 US cents per share. Furthermore, the board approved a dividend of US$248 569 to the Simbisa Employee Share Trust.
“The dividend will be payable in United States dollars on or about 20 April 2023 to shareholders registered in the books of the company at the close of business on 14 April 2023. The last day to trade cum-divided is 11 April 2023, and the ex-dividend date is 12 April 2023,” said the group.
