Quick restaurants services group Simbisa Brands Limited is on track with its plans to migrate to the Victoria Falls Stock Exchange (VFEX) beginning of next month, in a move that will help the company raise capital among other benefits.
This will be preceded by its delisting from the Zimbabwe Stock Exchange (ZSE) before end of this month.
In line with this, the group will on November 18, seek shareholder approval for the transaction.
The group has targeted December 2, 2022 as the date for completion of listing on the USD denominated exchange, which, group chief executive officer Basil Dionisio also indicated will also culminate in changing its reporting currency effective the current financial year to USD.
“Subject to shareholder approvals on 18 November 2022, Simbisa is on track to list on the Victoria Falls Stock Exchange on 2 December 2022.
“This is expected to make Simbisa shares more attractive to investors and elevate the group’s international profile and commercial standing,” he said in a trading update for the first quarter to September 30, 2022.
The migration to VFEX comes at a time the group has a solid pipeline of expansion projects and moving to the USD exchange will help the group raise working capital for its projects.
Currently, the Zimbabwe operation continues to generate all its foreign currency from the sale of products in the local market in line with the prevailing multi-currency framework and therefore does not have access to the Reserve Bank of Zimbabwe (RBZ) foreign currency auction system.
In an earlier circular to its stakeholders, Simbisa indicated listing on the VFEX will among other benefits cushion the group from exchange control risks as well as enjoy tax incentives on the bourse.
Meanwhile, the group recorded total customer count increased by 36,2 percent to 14,38 million during the quarter driven by new store growth as well as increased footfall in existing stores as a result of promotional activity and value offerings in the period. The store count for the group increased to 611 compared to 541 during the same period last year.
The Zimbabwe operation registered a 46 percent growth in customer counts on the back of relaxation in trading restrictions compared to the prior year period which was affected by restrictions related to the Covid-19 pandemic.
Growth in customer counts was also supported by successful promotional activities and value offerings implemented during the period under review.
Dionisio indicated the delivery segment was a key focus area during the period under review amid to increase delivery capacity by scaling operations across the country by acquiring bikes and increasing the number of call centre agents.
According to the group, the total number of deliveries increased by 64,3 percent while revenue per delivery grew 59 percent year-on-year.
The Zimbabwe operations opened 26 counters between 30 September 2021 and 30 September 2022, with three new counters opened in the quarter under review to close the period with 263 counters.
As for regional operations, currency devaluation plagued all regional businesses except for Zambia, where the Kwacha strengthened against the USD while Ghana Cedi was the worst affected depreciating by 78 percent.
Customer counts in the regional business increased 15,9 percent on the back of promotional activity and the resumption of trading at full capacity in Kenya, versus the prior year period in which the market’s trading hours were 20 percent below capacity.
Dionisio said: “Despite local currency devaluation against the US Dollar, the Group’s pricing strategy resulted in firmer real average spend across all regional markets, except for Ghana where real average spend fell year-on-year due to the sharp depreciation in the local currency.”
Regional deliveries dropped by 3 percent during the quarter mainly weighed down by Ghana, which continues to be impacted by reduced consumer disposable income due to economic challenges.
A net of 37 new company-operated counters and 8 franchised counters were opened between 30 September 2021 and 30 September 2022, with growth primarily in Kenya where 39 new counters were opened. In Mauritius 6 counters were closed as part of the consolidation and restructuring exercise, which was completed during the quarter under review.
An additional 15 new counters were opened in the region during the quarter to close the period with 285 company-operated outlets and 348 outlets, including franchised regional operations.