Although the period opened with relative stability in the Zimbabwean market, the second half was characterised by accelerated inflation, drought conditions as well as regulatory and tax changes which increased pressure on consumer liquidity. The introduction of the ZiG brought about some stability but volumes were impacted by disruptions to commerce arising from the currency transition. Moreover, the El Nino-induced drought not only affected prices and availability of essential raw materials but also diminished disposable incomes. In Kenya, the first half was characterised by currency devaluation and inflationary pressures. Tightening of monetary policy in the second half resulted in extended anti-tax riots, which in addition to severe flooding disrupted business operations. The Group completed a strategic restructuring exercise which entailed the acquisition of the Eswatini business and transitioning of Zambia, Ghana and Mauritius into franchised operations. There was continued focus on delivery channels by utilising application-exclusive offers to drive delivery volumes. Simbisa opened 73 new counters during the year and closed 9 counters to close the period with 601 company operated-counters (FY23:646) and a total of 714 counters including the franchised stores. Customer counts for the Group were 2% ahead of the prior year whilst average real spend grew by 4%. The Group’s revenue from continuing operations increased by 5.94% from US$270.40mn in FY23 to US$286.45mn in FY24, with Zimbabwe contributing 71.83% to this total (FY23: 67.65%). Increased cost pressures and the impact of once-off non-recurring income from Treasury investments of US$2.8mn in the prior year saw EBITDA easing 3.58% y/y from US$43.34mn to US$41.78mn in the period under review. Margins came under pressure due to sustained high inflation, elevated input prices, rising utility costs, power outages and exchange rate disparities. Therefore, EBITDA margin softened from 16.03% in FY23 to 14.59%. Zimbabwean operations only contributed 59.90% to the Group’s EBITDA, reflecting the severe cost pressures in the market. Simbisa changed the depreciation rate on leasehold improvements from 5% to 10% during the period, resulting in US$3.2mn incremental depreciation. On the flipside, the restructuring exercise and strengthening of the Kenyan shilling overturned currency translation losses to gains. The Group closed the period with a PAT of US$15.99mn, down 25.76% from the prior year’s US$21.54mn. Headline earnings fell 18.02%. The business closed the year with cash and cash equivalents of US$10.14mn against total borrowings of US$12.55mn. The Group declared a final dividend of 0.392 USc per share, bringing the full year dividend to 1.012 USc per share.
