Zimpapers Logo

INNSCOR Africa is in talks to acquire three local companies, expanding its portfolio across various sectors of the economy to minimise risk and will consider unbundling more of its units to unlock shareholder value, chief executive Antonio Fourie has said.

The group acquired automotive parts retailer Transerve in July and South African former Ellerine Holdings group chief executive Fourie — appointed Innscor head last year to spearhead the group’s restructuring drive — told The Source in an interview that the group was eyeing three companies in speciality retail and light manufacturing, but declined to disclose the names.

“We’re looking at a few more acquisitions and we’re currently in negotiations on three potential acquisitions. We’re at a point where we’re ready to go through the regulatory hoops and as soon as we’re through with those hurdles we’ll be able to comment more on the acquisitions,” said Fourie.

After unbundling and separate listing of its quick service restaurants (QSR) unit as Simbisa Brands, Innscor is strategising to expand into the foreign markets, Fourie said.

“We’ve to start again because we were achieving growth outside Zimbabwe through the QSR business. Now as we’ve unbundled the QSR, effectively 95 percent of our business is now in Zimbabwe so we’re now coming out of the starting block,” he said.

Prior to its unbundling, Innscor’s fastfood business had expanded rapidly on the African continent, having more counters in the region at 196 than the 171 it has in Zimbabwe.

The now Simbisa group operates its own fastfood outlets in Kenya, Zambia, Ghana and the Democratic Republic of Congo as well as franchised operations in Swaziland, Lesotho and Malawi.

These regional operations added $52 million in revenue to Innscor in 2014, while the Zimbabwean fastfood business, where it enjoys 82 percent market share, contributed $98 million.

The fastfood business — which includes Simbisa’s own brands, Chicken Inn and Pizza Inn as well as Nandos and Steers franchises — contributed 14 percent to Innscor’s revenue.

“All the work we’ve done to date through the QSR to expand out of Zimbabwe is now undone with the listing of Simbisa,” said Fourie.

Primarily, the group is looking to expand its poultry market in Kenya and drive its logistics and distribution arms, Distribution Group Africa and Vital Distribution Logistics into the region.

Most of the group’s current foreign component is in Zambia and is “dabbling a little bit in Botswana and into Namibia,” according to Fourie.

Innscor also owns the Spar franchise in Zambia.

The unbundling of Simbisa followed that of Padenga in 2010 and Fourie said opportunities were there for more units to be diverged from the group.

“We’re still busy working on what the best configuration and portfolio of investments for Innscor Africa Limited is and we think there’s another opportunity for unbundling but it’s a little bit too early to be definitive,” he said.

Fourie said the deteriorating economic fundamentals made it difficult to achieve set target. — The Source