KFC CONTINUES TO DELIVER STRONG RESULTS

MBABANE - For the six months ended June 30, 2024, Alliance Foods (Pty) Limited (trading as KFC Eswatini), continued to deliver strong results.

The fast food outlet continued cementing its position as the leading quick service restaurant brand in Eswatini. According to Inala Capital, General Africa Foods Eswatini (“GAFE”) (Inala Capital’s early growth stage investment), however, continues to grapple with lingering consumer pressure arising from persistent market disruptions prevalent since Covid-19. As a result of the abovementioned dynamics, Inala Capital has entered negotiations with Greystone Partners (Pty) Limited to dispose of its 5.97 per cent shareholding in GAFE and purchase a further 72.73 per cent shareholding in Alliance Foods in a share on approved share swap transaction, as part of a range of corporate actions presented to and approved by Inala Capital’s shareholders at its July AGM.

Flexibility

Inala Capitals’s fixed income investments continue to generate reliable and healthy yields. These instruments are short-term in nature, to maximise the return on treasury capital and to allow Inala the flexibility to deploy capital to one or other suitable unlisted equity investments or follow-on investments into the current portfolio. The current unlisted equity portfolio is valued at E30.3 million, (no change from the results of December 31, 2023), and the fixed income investments are valued at E 17.0 million (a decrease of E8.6 million on the back of Inala Capital converting a portion of this investment to cash, during the period under review).

The short-to-medium-term market forecast for the Eswatini and the SADC region will continue to be challenging as consumer spending remains under pressure. However, there are promising signs of the market rebounding, influenced by a range of factors, including but not limited to stabilising inflation, potential further monetary easing from the Eswatini Central Bank, and improved investor sentiment associated with southern African countries.

These can all be viewed against a backdrop of easing global financial system pressures. Inala Capital continues to work towards a strategic repositioning of the entity through the acquisition of material shareholdings in two entities within the secondary-agri and retail sectors along with the disposal of it minority shareholding GAFE.
These are anticipated to be concluded before financial year end and will dramatically improve the growth prospect of Inala.

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