Victoria Falls Stock Exchange-listed quick service restaurant group Simbisa Brands achieved strong topline growth in the three months ended March 31, 2026, underpinned by resilient consumer demand, aggressive store expansion and a sharp rise in volumes across its markets.
While customer appetite for value meals and convenience remained firm, the group warned that mounting inflationary pressures, rising fuel costs and shrinking margins are increasingly emerging as key threats to profitability.
The group posted a 23 percent year-on-year increase in revenue for the third quarter to US$85,3 million, driven by a 14 percent growth in customer volumes to 16,3 million transactions.
Average spend rose 8 percent to US$5,23, reflecting stronger basket sizes, product innovation and sustained promotional activity.
Group chief executive officer Mr Basil Dionisio attributed the robust demand environment to relative currency stability, favourable agricultural conditions and strong commodity prices in key operating markets, factors that supported household spending during the period.
“At the same time, the group intensified promotional campaigns, value offerings and quality enhancement initiatives that helped drive customer traffic without significantly increasing menu prices,” he said in the trading update.
He said the group recorded strong increases in delivery volumes in both Zimbabwe and Kenya as it accelerated efforts to balance traditional walk-in traffic with growing demand for convenience-based ordering channels.
However, despite the strong revenue momentum, he cautioned that the quarter was characterised by elevated cost pressures following significant increases in fuel prices beginning in February 2026.
The fuel hikes, triggered by global oil supply disruptions due to the ongoing tensions in the Middle East, increased transport, logistics and operating costs across the business while simultaneously squeezing gross profit margins as suppliers adjusted prices upward.
Mr Dionisio said the business was now placing greater emphasis on protecting profitability through operational efficiencies and disciplined cost management.
“The Group will continue to focus on defending margins through strengthened supply chain management, accelerated solarisation initiatives, efficiencies derived from digitisation and the implementation of strict cost control measures,” he said in the trading update.
He said sustained revenue growth would remain central to the group’s profitability strategy, supported by new product development, targeted promotions and strategic marketing campaigns.
Mr Dionisio said Simbisa also maintained an aggressive expansion strategy, with 17 new stores planned for the final quarter of the financial year and this is expected to bring total net new store openings for the year to 36 by June 2026.
He said during the 12 months to March 31, 2026, the group added a net 29 new counters across its regional network, taking the total footprint to 751 counters, comprising 621 company-owned outlets and 130 franchised stores.
He added that a further 21 counters were refurbished as part of ongoing infrastructure modernisation efforts.
During the quarter under review, Zimbabwe remained the group’s largest and strongest market, contributing US$61,9 million in revenue, representing a 26 percent increase from the prior year period.
The growth was driven by a 12 percent increase in customer volumes to 12,6 million and a 13 percent rise in average spend.
“Day-specific promotions, improved food quality and enhanced value offerings boosted customer counts despite limited menu price increases,” he said.
He also noted that the Zimbabwean business benefited significantly from rapid growth in deliveries, with delivery volumes surging 83 percent year-on-year due to an expanded delivery fleet and improved zoning efficiencies.
In the period under review, Simbisa opened 13 stores and closed five in Zimbabwe, ending the quarter with 342 trading counters. The group also introduced its new Pastino brand into the local market while refurbishing 10 existing outlets.
Nonetheless, Mr Dionisio said profitability in Zimbabwe remained under pressure from rising fuel costs and the impact of the Fast-Food Tax, which has increased operating expenses for restaurant operators.
“To mitigate these pressures, we company is intensifying supply chain optimisation initiatives and accelerating its solarisation programme under strategic power purchase partnerships aimed at reducing long-term energy costs,” he said.
In Kenya, revenue rose 15 percent to US$21,6 million as customer volumes increased 21 percent to 3,5 million.
However, average spend declined 5 percent to US$6,17 as the group leaned heavily on promotional pricing and value meal offerings to stimulate traffic.
“While the lower average ticket weighed on margins, the strategy successfully boosted customer counts and overall turnover,” he said.
According to the trading update, delivery growth in Kenya remained particularly strong, with volumes rising 71 percent year-on-year as in-house delivery services and third-party partnerships gained traction.
Mr Dionisio said the market is now averaging around 6,000 deliveries daily, with delivery contributions in key brands nearing the group’s long-term target of 30 percent of total turnover.
Kenya’s store network expanded by a net eight counters to 259 outlets during the period, while 11 counters were refurbished.
Meanwhile, Eswatini continued to deliver solid growth off a smaller base, with revenue rising 26 percent to US$1,4 million.
“The increase was supported by network expansion, including two new stores and the launch of a Galito’s food trailer earlier this year,” said Mr Dionisio.-herald
