Chairman’s Statement
Overview
The Group delivered a strong performance in the six months under review, building on the resilience demonstrated in the face of macroeconomic challenges in the last quarter of FY2024. Despite prevailing socio-political and economic headwinds, particularly in Kenya and Zimbabwe, the Group achieved a 7% increase in turnover and a 2% growth in operating profit, and a strong free cash generation, reflecting the effectiveness of our customer-centric approach. Leveraging real-time customer feedback, we have continued to enhance service delivery and improve the overall customer experience.
As at 31 December 2024, the Group operated 611 company-owned stores, having achieved a net addition of 42 stores between 31 December 2023 and 31 December 2024. Additionally, 8 stores were refurbished, reinforcing our commitment to elevating customer satisfaction through modern and aesthetically refreshed outlets.
Market Performance
Zimbabwe
For the six-month period, the Zimbabwean market recorded a 4% year-on-year revenue growth, primarily driven by a 7% increase in customer count, with 24.8 million customers served during the period. However, a 3% reduction in average spend was noted, reflecting the Group’s strategic decision to lower prices to cushion customers from shrinking disposable incomes in response to the tight liquidity policy in place. The market expanded its footprint through new store openings, adding a net total of 38 new stores between 31 December 2023 and 31 December 2024, bringing the total to 339 stores trading at the end of the period.
Macroeconomic instability continued to exert pressure on both consumers and companies. Notably, local currency devaluation in the first quarter, electricity tariff increases exceeding 50%, and intensified load-shedding impacted cost structures and profitability. The volatility of the newly introduced currency in the period under review affected disposable incomes, requiring adaptive strategic interventions.
In response, the Group focused on cost containment, supplier engagement, and enhanced customer-driven promotional activities. These initiatives aim to protect consumer affordability while preserving operating margins and sustaining profitability. Management remains confident that this approach fosters a sustainable and profitable business model.
Kenya
Kenya’s operations reported 16% revenue growth in USD terms for the six-month period, driven by a 26% increase in real USD average spend, despite an 8% decline in customer count. A net total of 4 counters were added between 31 December 2023 and 31 December 2024, with the market closing the period on 255 operating counters.
The lingering socio-economic unrest, continuing from the previous financial year, coupled with newly implemented tax measures, continued to weigh on consumer spending power and negatively impact operational costs. Nonetheless, the Group remains committed to its customer-centric strategy, with store refurbishments and upgrades planned for the second half of the financial year, to enhance customer experience and reinforce our competitive positioning.
Eswatini
Revenue in Eswatini declined by 2% year-on-year in USD terms for the six-month period, with a 10% drop in customer count partially offset by a 9% increase in real average spend. Despite this, profit margins remained stable year-on-year. A store refurbishment program is set to be implemented in H2 FY2025 to revamp older sites and improve customer experience.
Sustainability and Community Engagement
Simbisa Brands remains committed to sustainability-driven operations, ensuring business decisions align with the needs of both current and future generations. Operational efficiency and food waste reduction remain core priorities within our strategic framework. Our real-time customer feedback platform continues to drive improvements in service delivery and stakeholder engagement.
Our community development investments align with the United Nations Sustainable Development Goals (SDGs) prioritised by the Board relating to water and sanitation, education and food security. During the period, the Group significantly contributed to initiatives supporting community resilience and development in all its key operational regions.
Governance
Resignation of Group Finance Director
Mr. Baldwin Guchu stepped down from his position as Group Finance Director of Simbisa Brands Limited, effective 1 January 2025.
Baldwin joined Simbisa in 2018 and has been instrumental in driving the Company’s financial strategy, enhancing operational efficiencies, and supporting the Company’s expansion in existing markets as well as capital raising projects.
The Board extends its gratitude to Baldwin for his outstanding leadership and commitment and wishes him the best in his future endeavours.
Appointment of new Group Finance Director
Simbisa Brands appointed Mr. David Takudzwa Mudzengi (CA (Z)) as the Group Finance Director of Simbisa Brands Limited effective 1 February 2025.
David is a Chartered Accountant with extensive experience in financial reporting, corporate finance, management accounting, and enterprise risk management. He holds a Bachelor of Commerce Honours in Accounting from National University of Science and Technology. Over his 17-year career, he has served in various leadership roles, including as Finance Director of Bakers Inn Sales & Distribution, Chief Finance Officer at Ecocash Holdings, Finance Executive at First Mutual Health and as a Senior Advisor – Transaction Advisory services at Ernst and Young. His accomplishments include leading complex corporate restructurings, developing fintech and insurtech business models, and overseeing multimillion-dollar transactions in the insurance, health, and asset management industries.
David’s extensive experience and proven leadership will be invaluable as Simbisa Brands Limited continues its growth trajectory.
The Board congratulates David on his appointment and is confident in his ability to make a meaningful contribution to the Company’s success.
His appointment will be tabled for ratification at the Company’s 10th Annual General Meeting in November 2025.
All the Board Committees were fully functional, met regularly and satisfactorily discharged their fiduciary duties in the reporting period.
Appointment of new Company Secretary
Simbisa Brands Limited confirmed Ms. Fadeke Hatineti Obatolu as the Company Secretary, effective 2 January 2025.
Fadeke has been serving as the Acting Company Secretary since 1 October 2024, during which time she has effectively managed the Company’s compliance and governance responsibilities. She also currently serves as the Group Legal Advisor for Simbisa Brands Limited, a role she has held since June 2017, overseeing legal compliance, governance, strategic legal initiatives and matters related to intellectual property rights protection. Her experience in these areas has made her an invaluable member of the leadership team.
She holds a Bachelor of Law degree from Rhodes University, a Master’s in Business Administration from Nottingham Trent University, along with training from the University of Stellenbosch Business School’s Management Development Programme.
The Board warmly congratulates Fadeke on her confirmation and looks forward to her continued contribution to the Company in her expanded role.
Financial Highlights
Despite the highlighted challenges, our focus on cost management and operational efficiency has enabled us to navigate these difficulties effectively, continuing to deliver value to our shareholders and therefore:
- Revenue grew by 7%, despite economic headwinds.
- Operating profit before impairment, depreciation, and amortization increased by 2% year-on-year.
- Cash generated from operations surged by 39% to USD 29.4 million, translating to a 117% conversion rate of operating profit to cash.
- There was a notable decline in the loss on translation of foreign subsidiaries compared to the prior year. This improvement was driven by the strengthening of the Kenyan Shilling since the beginning of the prior year and the prior year disposal of subsidiaries in Zambia, Ghana, and Mauritius, which had previously contributed substantial currency translation losses.
Interim dividend
The Board resolved to declare an interim dividend of 0,62 US cents per share. Furthermore, the Board approved a dividend of USD 174 277 to the Simbisa Employee Share Trust. The dividend will be payable in United States dollars on or about 20 March 2025 to shareholders registered in the books of the Company close of business on 14 March 2025. The last day to trade cum-dividend is 11 March 2025, and the ex-dividend date is 12 March 2025.
Looking Ahead:
The Group is entering an exciting phase, with customer-centric initiatives at the core of our strategic initiatives. Key focus areas for H2 FY2025 include:
- Expanding store network accessibility with 14 new counters and 20 store refurbishments to give customers world class experiences.
- Scaling up delivery services to meet evolving consumer demands.
- Enhancing New Product Development by introducing innovative meal options.
- Restructuring property investments to optimise asset utilisation.
- Strengthening supply chain efficiencies by sourcing alternative raw material suppliers.
- Increasing customer counts in store.
These planned initiatives exhibit our commitment to delivering long-term value to customers, employees, and shareholders alike.
Appreciation
The Board recognises the tough trading environment prevailing in our key markets. I extend my deepest gratitude to our dedicated employees, valued customers, committed shareholders, and supportive stakeholders. Your unwavering trust, resilience, and passion continue to drive Simbisa Brands forward. Together we will continue to forge a path toward sustainable growth and success.
ABC Chinake
Independent Non-Executive Chairman
Harare
27 February 2025
Related Downloads
Simbisa Brands Limited – Unaudited Abridged Financial Results for HYE 31 December 2024
Simbisa Brands Limited – Short Form Financial Announcement for HYE 31 December 2024
