HARARE - Zimbabwe Stock Exchange (ZSE)-listed diversified group, Innscor Africa Limited (Innscor) is divesting from its supermarket portfolio to focus on core restaurant business.
“Pursuant to Innscor Africa Limited’s strategy of focussing on core business, the board of directors announces that the group has, with effect from January 1, 2016, divested its interests in the six Spar Corporate Stores (Spar) which it operated in Zimbabwe,” the group’s company secretary Andrew Lorimer said yesterday.
Total revenue and total assets contributed by the Spar to the overall group for the year ended June 30, 2015 was $52,8 million and $14,6 million respectively.
The company secretary also said that more details on the transaction were going to be made available in the group’s upcoming statement of interim financial results to December 31, 2015.
Innscor’s Spar supermarkets are directly held by the licence holders, thus the development will likely see current franchise holders taking control of the six outlets.
The latest development comes after established retailers are experiencing decline in revenue as a result of limited and constrained consumer disposable incomes.
A recent snap survey by a local stockbroker revealed that consumers are now turning to low-priced goods and low cost outlets have taken advantage of this change in consumption patterns and are thriving at the expense of established retailers such as Spar, OK Zimbabwe and TM supermarkets.
In 2013, businessman Ray Kaukonde disposed of his Spar Western region licence and his two flagship stores Brooke and Joina Spar to Innscor, after taking control of the Western Region SPAR Distribution Centre (Western Guild) through his investment vehicle, Scotia Holdings, from ZSE-listed Starafrica Corporation limited, which held the Spar licence through Advance Wholesalers.
Advance Wholesalers held the Spar Zimbabwe licence jointly with Spar Harare (Private) Limited, a unit controlled by Innscor Africa Limited, a fast-moving consumer goods integrated chain with operations both in Zimbabwe and the region. Kaukonde is a former chairman of Innscor.
Innscor chief executive Antonio Fourie recently said the diversified group was crafting a mechanism to configure operations and unlock inefficiencies that sit in the group. Fourie also revealed that the conglomerate was planning further unbundling, new acquisitions and at least a couple of disposals.
“From an acquisition point of view we still continue to look for acquisitions… you know we need to jump through all the regulatory hoops and make sure from a regulatory point of view we are doing things right and the process is right.
“But there are some interesting acquisition opportunities in the manufacturing space that we can take advantage of,” he said.
According to Fourie, there are parts of the Innscor portfolio “that would lend themselves to another unbundling”.