Simbisa records 68% revenue growth in Q3 FY21


HARARE – Pan African and Zimbabwe Stock Exchange-listed (ZSE) fast foods operator, Simbisa Brands reported a 68% overall growth in revenues (inflation-adjusted) during the third quarter ended 31 March 2021 (Q3 FY21) against the prior comparable period.

Year-to-date (YTD) Group revenue increased by 87% in inflation adjusted terms and 530% on historical cost basis.

Simbisa which operates quick restaurant brands such as Chicken Inn, Pizza Inn, Nandos, Steers and Creamy Inn saw a mixed but commendable performance from its Zimbabwe operations where COVID-19 induced lockdowns had the most significant impact.

Revenue from the Zimbabwe operations during Q3 FY21 increased marginally by 2% in inflation-adjusted terms and by 30% on a YTD basis.

Group operating profit margins dropped from 17% in Q3 FY20 to 12% in Q3 FY21 as a result of the impact of lower revenue recorded in the Zimbabwe operations in January and February, against a relatively fixed cost base.

Reflecting the impact of COVID-19 induced lockdowns that saw restaurants operating at limited capacity, YTD customer counts were down 16.7% versus the prior year. The Zimbabwe operations were trading on 25% fewer counter hours than at full capacity.

However, average spend increased by 56% year-on-year in real terms, driving the growth in revenue.

“The Covid-19 pandemic continues to impact customer counts, particularly in Zimbabwe which went into a stricter 30-day, level-4 national lockdown from the 3rd January, which was subsequently extended by a further two weeks to 15th February 2021,” Group Chief Executive Basil Dionisio said in a statement accompanying the trading update.

“This had a significant impact on counter trading hours; the Zimbabwe operations traded on 45% less counter hours than would have been realised when trading at normal operating hours. Furthermore, seating capacity was reduced to 50%.

“Resultantly, customer counts were down 34.3% in Q3 FY21 compared to the prior year,” he said.

However, the Group is on a recovery path following the relaxation of lockdown restrictions from March 2021, reporting a 12% growth in customer counts during the month versus prior year.

It recorded real growth in average spend in the Zimbabwe market during the quarter where US Dollar average spend increased by 32% and ZW Dollar average spend increased 417%, ahead of inflation, versus prior year.

Meanwhile, YTD customer counts in the regional business encompassing operations in Zambia, Kenya, Ghana, DRC, Malawi, Namibia, Botswana, Mauritius, Swaziland and Lesotho fell 13% against prior year, trading off 22% less trading hours.

“However, a gradual relaxation in trading restrictions saw a recovery in customer counts in Q3 FY21 and the region managed to grow customer counts by 2.5% year-on-year, against a 17% loss in trading hours in the quarter,” Mr Dioniso.

During the period under review on March 24, Zimbabwe opened the inaugural Spur restaurant marking the seventh new counter opening in Zimbabwe in the nine months from 1 July to 31 March 2021.

Mr Dioniso said “this was met with great excitement and trading to date has exceeded expectations.”

Commenting on the outlook, he said, “With the gradual easing of trading restrictions in our operating markets, trading hours are scaling up and with that, customer counts are recovering.

“Considerable effort has been put into managing our cost base which has seen a considerable improvement in Group operating margins. Thus, a recovery in revenue will translate to growth in profitability and improved Shareholder returns and value delivery.”

He added that a strategy to escalate the growth rate of the delivery business in Zimbabwe is being formulated to increase the segment’s contribution in our largest operating market.