Zim Nando’s operator bets on Africa’s fast food appetite

Harare - There is growing appetite for quick serve restaurant foods in Africa and Zimbabwe’s Simbisa Brands – which runs Nando’s, Steers and Chicken Inn counters in the country and in various other African markets – is investing heavily into new outlets in countries such as Mauritius, Ghana and Kenya in addition to growth back home.

In Zimbabwe, the company competes with franchisees of KFC as well as a few local companies. Revenue from all of its operations for the nine-month period to June was $106m. The company listed in August last year after unbundling from Innscor Africa Limited.

However, just like any other business Simbisa is suffering from declining economic growth in Zimbabwe, hence its strategy to look to its rest of Africa markets for growth. 

Profit after tax was at $3m and executives at the company said it had taken a major knock from currency depreciation in Kenya, Zambia and Ghana.

“True growth is going to come from Africa as the opportunities for growth are vast in Africa and this should be contributing about 60% of our revenues,” said the company's chief executive officer Basil Eceolaza.

Simbisa targets the Nando’s and Steers brands for the top end of the market in Zimbabwe, and Eceolaza said customers in the segment can spend up to $12 buying meals.

The company has other brands for the lower end of the market that sell chicken, pies, chips and fish among other products such as burgers. Simbisa has just opened 13 new counters in Mauritius, a new market for the firm.

Shareholders in the company are also smiling as it will pay a 0.24 cents dividend after basic earnings per share rose to 0.56c. The company has also been able to get loans mostly from Zimbabwe, although it has also secured facilities of about $3m from the region.

“The company is cash generative and this gives confidence to lenders as they will know that it will get cash to pay back. It has borrowings of $18.8m and this shows the trust that investors and funders have in this company,” said one analyst who attended a briefing held by the company in Harare on Tuesday.

He added that the company was also taming its operating costs that remained flat for the period. The company said its customers in both Zimbabwe and Africa consume as much as 8.4 million kilograms of chicken per year.