HARARE – Simbisa Brands has posted a solid set of results for the year ended 30 June 2025, but beneath the headline growth figures lies a warning about mounting pressures on the fast-food giant’s margins in a challenging economic environment.
Revenue rose 7% year-on-year to US$306.5 million, though the figure narrowly missed market expectations of US$310 million. Analysts said the shortfall points to weaker consumer demand in the second half of the year as household incomes came under renewed pressure from food inflation and high transport costs.
Operating profit before depreciation and amortisation climbed 8.8% to US$45.4 million, driving EBIT margins to 9%, ahead of projections. However, bottom-line performance showed early signs of strain, with net profit margins slipping to 5.5% from 5.6% in FY2024.
“Net margins have been trending down since 2023, and the compression to 5.5% this year may mark the beginning of a reversal in the strong run Simbisa enjoyed between 2018 and 2022,” said one analyst, pointing to new health and ‘sin’ levies as well as exchange rate instability as key risks.
Historically, Simbisa’s margins averaged 6% between 2011 and 2017, before rising to 8.6% between 2018 and 2023, buoyed by regional expansion and relative resilience to Zimbabwe’s currency distortions. But the introduction of Pigouvian-style taxes on fast food, coupled with persistent macroeconomic headwinds, is now eroding that cushion.
Still, the company remains a reliable cash generator. Operating cash flows rose 9.7% to US$51.3 million, with cash-to-operating profit conversion improving to 113%. The board declared a final dividend of 0.453 US cents per share, up 15.6%, underscoring management’s confidence in the group’s balance sheet.
Looking ahead, analysts argue Simbisa must accelerate regional expansion to reduce reliance on Zimbabwe, where inflation, fuel costs, and a swelling import bill continue to squeeze consumer spending. Digital platforms and delivery services are also seen as growth opportunities.
“Simbisa remains fundamentally strong,” an analyst noted, “but unless it adapts quickly to shifting regulation and a deteriorating consumer climate, the downward pressure on margins could intensify.”
