BY TATIRA ZWINORA
SIMBISA Brands’ US dollar pricing model is now servicing its monthly US$1 million demand for raw materials bill which has upped the company’s initial capital expenditure to $15 million on 20 more outlets, NewsDay has learnt.
In February, Simbisa announced it would invest about $10 million setting up 21 new outlets, with the company opening a Nando’s branch last Friday in Harare central business district at a cost of US$675 000.
Helping the company increase its capital investment is the company’s adoption of a US dollar pricing model in December 2018 which covers its monthly raw materials demand and is helping
with the company’s expansion plans.
“What we have looked at is, because of the demand for our brands throughout the country, we have upped that investment from $10 million. We are still working out the finer details, but it may come closer to about $15 million or $17 million for 20 more outlets by the end of this financial year (ending June 30, 2019),” Simbisa Brands managing director Warren
Meares told NewsDay Business.
“Basically, the United States dollar pricing has helped in that it has made available the US dollars required to help us with our expansion and to import all the raw materials required
to run our operations. In our operations we require at least US$1 million a month and I would say for our raw materials it (US dollar pricing) is largely covering that.”
The US pricing model includes offering customers discounts nearly at cost for those buying with the United States dollar.
Other fastfood chains implementing such a model include KFC Zimbabwe and Slice Distributors (Private) Limited.
Simbisa operates Chicken Inn, Pizza Inn, Baker’s Inn, Creamy Inn, Fish Inn, Rocomamas, Steers, Nando’s and Galito’s outlets.
Meares said on top of increasing their total outlets across all the brands they also have plans to introduce some new ones.
“We also have some new brands that we are going to be bringing in from South Africa,” Meares said.
To date, Simbisa Brands has 209 outlets across the country.
In its financials for the half year ended December 31, 2018, the fastfood chain saw a 44% growth in revenue to US$143,24 million from the previous year’s comparative of US$99,2
This was from a 6% increase in the total number of customers served to 30 million, equivalent to at least every citizen buying twice from Simbisa Brands outlets in the period.
In terms of profit after tax, this more than doubled to US$16,37 million for the period under review from a comparative of US$7,99 million in the previous period.
Heading into the second half of the year, the company had an operating profit margin of 19% leaving it in a very profitable position.
Total assets grew 23,33% to US$104,64 million from the previous period’s comparative US$84,84 million.