Simbisa posts $3m profits, eyes acquisitions

Simbisa Brands Limited posted a profit-after-tax of $3,1 million in the nine months ending June 30 on the back of a growth in customers across the region.

BY TARISAI MANDIZHA

Simbisa was unbundled from Innscor Africa Limited and debuted on the Zimbabwe Stock Exchange in November last year.

In a statement accompanying audited abridged financial results, Simbisa Brands Limited chairman Addington Chinake said the group increased its customer base by over one million after serving 35 million during the period under review.

Operating profit fell by 9,% to $9,44 million from the prior year, weighed down by pre-opening costs and losses incurred in new markets.

“We expect these new stores to contribute positively to profits in full year 2017. Our distinct advantage is that we operate the majority of our own stores and the potential to gain operational efficiencies and reduce costs is immense. Our largest market, Zimbabwe, is already realising benefits of operational efficiencies, growing in profitability despite softening sales,” Chinake said.

He said Zimbabwe contributed 62% of the group’s revenue, while the regional operations namely Kenya, Zambia, Ghana, the Democratic Republic of Congo and Mauritius contributed the remainder of group revenue.

“Our brands have remained strong despite continued adverse trading environment in the markets we operate in. We are growing in store coverage and we believe Simbisa is set to provide compelling shareholder returns over the long run. In the past financial year alone, our net growth in counters was 56 across all our markets taking our store count to 414,” he said.

In Zimbabwe, Simbisa opened a net of seven new counters (opened 18 new counters and closed 11) in the period under review and 17 new counters in Kenya, taking the overall store count to 116 as at June 30 2016. In Zambia, Simbisa closed five counters and opened four new ones, while in Ghana, Simbisa opened seven new counters and closed five.

In the outlook, Chinake said Simbisa would, over the next two years, optimise operational efficiencies across all markets, “cautiously roll out new stores in prime locations and pursue acquisitions in strategic markets in the region”, aided by the existing stores and strong cash generating businesses in existing markets.

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