Simbisa Brands Limited (‘Simbisa’ or the ‘Group’) issues the trading update for the Third Quarter ended 31 March 2025.
TRADING ENVIRONMENT
During the Quarter under review, the trading environment was characterised by relative currency stability in both Zimbabwe and Kenya.
In Zimbabwe, the exchange rate remained stable from January to March 2025. This stability was supported by the Reserve Bank of Zimbabwe’s tight monetary policy stance. However, the resultant liquidity constraints posed challenges to both operations and strategic planning. In Kenya, the Shilling maintained a stable position against the US Dollar, buoyed by favourable foreign exchange inflows and prudent monetary management.
Despite this exchange rate stability, inflationary pressures, tax policy changes and fiscal tightening in Zimbabwe continued to erode consumer purchasing power, resulting in a highly price-sensitive market. Simbisa responded with aggressive promotional campaigns and value-meal offerings, designed to deliver enhanced customer value, stimulate organic volume growth and defend market share. Temporary trading disruptions were also experienced due to sporadic socio-political unrest.
Promotional efforts, combined with the introduction of a 1% fast-food tax effective 1 January 2025 in Zimbabwe, placed pressure on gross profit margins. This necessitated focused efforts to preserve overall profitability. Despite operating cost pressures, the Group successfully improved operating profit margins and delivered year-on-year (YoY) profitability growth in both the quarter under review and in the nine-month year-to-date (YTD) period.
Despite a challenging operating environment, Simbisa delivered top-line growth and improved profitability during the quarter under review. The Group remains agile, with a customer-centric and resilient strategy aimed at sustaining long-term growth.
GROUP PERFORMANCE UPDATE FOR THE QUARTER
The Group achieved a 4% YoY revenue growth in Q3 FY 2025, driven by a 7% rise in real average spend, partially offset by a 3% decline in customer counts. For the nine-month YTD period, revenue increased 6% versus prior year, underpinned by a 3% increase in both customer counts and real average spend.
Between 31 March 2024 and 31 March 2025, Simbisa opened a net total of 10 new company-operated counters and added 10 franchised counters. As of 31 March 2025, the Group operated 722 outlets, comprising 601 company-owned and 121 franchised counters. The strategic focus has shifted towards modernising the existing store base through an extensive refurbishment programme, which has moderated the pace of new outlet expansion in the short term.
ZIMBABWE
Revenue grew 1% YoY in Q3 FY 2025, driven by a 1% increase in average spend, whilst customer footfall remained flat on prior year, at 11.2 million customers for the Quarter.
Customer counts increased 6% in the nine-month YTD period, supported by organic store growth and promotional activities.
The network expanded by a net total of 8 new counters between 31 March 2024 and 31 March 2025. During Q3, 2 new counters were opened, and 8 underperforming counters were closed, resulting in a total of 333 trading outlets at quarter-end. During the nine-month period, 7 counters were refurbished as part of the strategic infrastructure upgrade programme.
Simbisa Zimbabwe faced inflationary cost pressures, including rising energy costs, increased fuel and maintenance expenses from increased generator usage and higher Intermediate Money Transfer Tax (increased from 1% to 2% in April 2024). Strict cost management measures are being implemented, with a focus on energy efficiency, maintenance control and optimising staffing structures to preserve profitability.
KENYA
Revenue increased by 13% YoY in Q3 FY 2025, driven by a 25% increase in real average spend, although customer counts declined by 10%. For the YTD period, revenue rose 15%, supported by a 25% increase in average spend.
High inflation, increased taxation and job losses significantly constrained disposable incomes in the Kenyan market, negatively impacting foot traffic. In response to rising price sensitivity, Simbisa introduced more affordable value meal options.
The store network expanded by a net of 2 new counters during the 12-month period to 31 March 2025, reaching a total of 251 counters by quarter-end. There were 5 counters refurbished during the same period.
Gross profit margins improved due to procurement efficiencies and local currency stability. Operating costs were contained in line with lower customer volumes while maintaining product quality and service standards.
ESWATINI
US Dollar turnover remained flat in Q3 FY 2025 compared to the prior year and declined 2% for the nine-month YTD period.
Customer counts fell 8% YoY in the nine-month period and declined by a more moderate 3% in Q3. Consumer spending remained under pressure due to inflationary trends and currency volatility. Real average spend increased 3% YoY in Q3 and 7% over the nine-month period.
Despite a weaker top-line performance, improvements in cost of sales and productivity, along with enhanced staffing structures, supported stronger operating profitability.
OUTLOOK
The Group remains committed to enhancing service delivery and elevating the customer experience. Store refurbishments aimed at upgrading the look and feel of older outlets will play a central role in this strategy. Additional growth initiatives include menu innovation, aggressive value-driven campaigns and optimising the delivery channel to support increased footfall.
Simbisa plans to open 4 new counters in the final quarter of FY 2025, ending 30 June 2025. The development pipeline for FY 2026 includes 53 new outlets and 56 refurbishments, broken down as follows:
- Zimbabwe: 40 new counters and 39 refurbishments
- Kenya: 11 new counters and 12 refurbishments
- Eswatini: 2 new counters and 5 refurbishments
In light of sustained inflation and recent tax changes, the Group is prioritising cost-efficiency and supply chain optimisation. Significant efforts are being made to build strategic supplier partnerships to secure sustainable input cost savings. Simbisa also expects some margin relief from a strong agricultural season in Zimbabwe.
The Group remains committed to its sustainability objectives. As part of its environmental strategy, hybrid solar-electric systems are being piloted in select outlets in Zimbabwe. Furthermore, as of February 2025, the Group completed its transition to 100% paper-based packaging.
B DIONISIO
GROUP CHIEF EXECUTIVE OFFICER
15 MAY 2025
Related Download
Simbisa Brands Limited – Trading update for the third quarter ended 31 March 2025
