The business continues pursuing its growth strategy hinged on improved deliveries, technology development, continued growth in footprint and brand development. In Kenya, sitting at a store count of 224, Simbisa consolidated its position as the largest QSR operator in the market surpassing a key milestone of 200 stores. The Group has a significant pipeline of new stores and expects to open 83 stores in FY23, mainly in Zimbabwe (41) and Kenya (41) at a cost of about US$27mn. Simbisa is generating sufficiently strong free cashflows to drive this growth. As such, we expect an increase in customer counts, from a low base, on the back of improved trading hours and increased store count, translating to increased revenue of US$289.5mn for FY23. In FY22, Simbisa restaurants served over 52.3mn customers, up 28.6% from the prior year. Of concern are high tax rates which are expected to continue weighing down margins thus negatively impacting profitability. A debt restructure was enacted during FY22 to manage the impact of exchange rate volatility and prescribed lending rate increases in Zimbabwe. With the advent of an increasingly strong US$, we expect local currency risks to persist in the region posing a downside risk.
