On a Date with Simbisa Brands

Dating is a critical stage to any investor considering to take a position on any asset class even shares.

#1. History,

1987, A young entrepreneur Zinona Zed Koudounaris opens his first quick service restaurant (QSR) Chicken Inn in Harare.

1989, Andrews Foods supplies a small confectionary upstart retail shop Baker’s Inn with bakery products.

1991, Baker’s Inn starts its own bakery operations in Chitungwiza.

1994, Another bakery operation is commissioned in Bulawayo with expansion of the bread plant in Harare.

1995, Nando’s franchise for Zimbabwe is bought and a store is opened in Avondale.

1998, Capri Corporation a struggling electronics appliance manufacturer is acquired by Innscor Africa.

The acquisition enable the reverse listing of Innscor on the ZSE with the delisting of Capri Corporation.

Innscor Africa is an investment holding company.

The listing allows Innscor Africa utilisation of the QSR Business to spread its footprint into Africa as a diverse Pan-African operation. In the process QSR outlets were opened in Zambia, Kenya and Ghana.

Innscor Africa is developing a portfolio of assets in fine, casual, Quick Service Restaurants (QSR) and bakery.

1999, Steers franchise is acquired and a store is opened in Harare.

2011, Consolidation of the Harare bakery operations into one plant and purchase of Galito’s franchise, Nando’s (Zimbabwe only), Steers (Zimbabwe only), Rocomama’s (Zimbabwe Only) and Vida E Caffé.

2013, franchised Chicken Inn, Pizza Inn, Creamy Inn and Galito’s outlets opened across Africa, including Zimbabwe, Zambia, Kenya, DRC, Ghana, Malawi, Namibia, Mauritius and Swaziland.

2015, Innscor Africa spins off its quick service restaurants assets into a separate business, Simbisa Brands.

2015, Simbisa was incorporated as a wholly owned subsidiary of Innscor. Effective 1st October 2015 Simbisa acquired, through a scheme of reconstruction, all the assets and liabilities of the QSR Business from Innscor in exchange for 541,593,440 shares in the company.

Simbisa Brands is listed on the ZSE by way of dividend in specie.

#2. Operations,

Simbisa Brands is an African focused business that operates owned and franchised brands in

• Casual dining
• Fine dining
• QSR

And

• Bakery operations.

+524 outlets are operated including 5 Drive Thru and +3 bread plants in (Zimbabwe and Zambia) as at 30 June 2021.

#3. Brands

Owned Brands

° Chicken Inn

° Pizza Inn

° Creamy Inn

° Baker’s Inn

° Fish Inn

° Grab n Go

° Kutuma (delivery service business in Kenya)

Franchised Brands

° Galito’s

° Nando’s

° Steers

° Ocean Basket

° Vida E Caffe

° Spur

° Rocomamas

° The Grill Shack

#4. Markets

Simbisa Brands operates in 9 countries,

Zimbabwe

Kenya

Zambia

Mauritius

Ghana

Nambia

DRC

Swaziland

Malawi

Namibia and DRC markets are operated through a franchising model

Zimbabwe is the largest market by income and coverage with Kenya behind

#5. Competitors,

Simbisa Brands is in a fiercely competitive market however it has managed to build a competitive advantage through

• Pricing
• Locations
• Multiple offering (holds master franchise for unique brands)
• Delivery services
• Promotional campaigns

Slice Distributors

• The business that operates Chicken Slice, Pizza Slice and Cream Slice.

Barcelos

• A South African based franchise business started by Costa Mazzis who mentored Benson Muneri the operator of Hotplate Grill.

KFC

Mambo’s Chicken

Eat n Lick

#6. Management,

Basil Dionisio – Group CEO

An experienced executive who has been with the business from its inception.

Accredited with expanding the business into new regional markets and offering.

A shareholder by his own right.

#7. Share Price

ZWL320 LTP per share as at April 25,

ZWL90.00 per share on the 4th of January,

ZWL178.8bn market cap (US$638.42m, 5.5% ZSE weight by market cap)

253% gained from the start of the year

14th most traded stock on the ZSE in the past 3 months to April 14.

562,184,788 shares issued.

#8. Shareholding,

18.29% of Simbisa Brands is controlled by an investment vehicle owned by the founder of Innscor Africa, Zinona Koudounaris

#9. Pitch

The business is on an expansion drive across multiple markets with a huge budget to open new stores.

Market share in Zimbabwe and Kenya are higher than other rivals even international ones such as KFC.

The Kutuma delivery services business.

Benefits from being part of the Innscor Africa ecosystem of businesses which are complementary.

The trailer concept is another innovative model being used by Simbisa to gauge market demand and offer services in any area.

Innbucks which was recently stopped by the RBZ is another innovative service with multiple advantages which if regularised and fully exploited can generate additional revenues.

Ability to earn its own foreign currency to facilitate imports needed in operations.

A highly liquid stock