Innscor on expansion drive

HARARE - Diversified group Innscor Africa Limited (Innscor) plans to open 31 fast food outlets locally and regionally by June 2014.

The listed fast food chain said the new joints will include seven in the Democratic Republic of Congo.

This comes amid stiffening competition in Zimbabwe’s fast food market with numerous indigenous players venturing into the industry.

Recently, America-based Burger King announced intentions to establish business in the country while KFC plans to open 25 outlets.

Innscor’s expansion plans are part of efforts to consolidate its foothold in the local and regional markets.

Meanwhile, the group increased its outlets, including those franchised territories, to 210 in the year to June 2013.

“The expansion programme saw 16 additional counters being opened during the year under review with 14 counters in Kenya and two in Zambia.

“The franchise arrangement in Nigeria is currently under review and management is considering various options for improving the performance in this market,” said group chairperson David Morgan.

“There was improved product and pricing strategies successfully introduced at Chicken Inn and Pizza Inn with a new brand Fish Inn launched in April 2013 while refurbishment programme continued,” said Morgan.

During the period under review, regional fast food operations recorded a 10 percent revenue growth contributing $269,05 million to overall revenue from $246,3 million in 2012.

However, profit before tax from the operations went down from $29,7 million in 2012 to $23,5 million.

Overall group revenue surged five percent to $656 million though profit after tax remained stagnant at $48,6 million.

Operating profit and profit before tax slumped by two and three percent to $67,3 million and $59,3  million respectively.

“Consolidated operating profit was marginally lower than that recorded in the prior year and was affected by a combination of lower gross margins in certain businesses, as well as a number of cost provisions and re-structure charges emanating mainly from Colcom as advised in the interim report,” Morgan said.

He pointed out that the group’s retail operations were still in a loss position though significant improvements had been made at store level.

The group recently acquired rights to operate the Spar franchise in the Western region while 72 outlets currently operating under various Spars brands have been maintained.

It continued to show strong cash generating ability, with cash realised from operating activities amounting to $54,16 million during the year under review.

The group’s distribution business, which consists of Distribution Group Africa operations in Zimbabwe, Zambia and Malawi, reported a 17 percent growth in volumes although a changing product mix with a lower average selling price per unit resulted in lower revenue growth.

Basic earnings per share went up from 7,15 cents in 2012 to 7,19 cents while headline earnings per share amounted to 6,36c from 6,29c in the previous year.

The group declared a one cent final dividend.

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