Axia Corporation – Unaudited Abridged Financial Results for HYE 31 December 2023

By Published On: March 21st, 2024Categories: Corporate announcement, Earnings

Chairman’s Statement and Review of Operations


The Directors of Axia Corporation Limited are responsible for the preparation and fair presentation of the Group’s consolidated financial statements and this press release is an extract thereof. The unaudited interim financial statements have been prepared in accordance with International Accounting Standard 34 “Interim Financial Reporting” and in the manner required by the Companies and Other Business Entities Act (Chapter 24:31) and the Victoria Falls Stock Exchange listing requirements. The principal accounting policies of the Group are consistent with those applied in the previous annual financial statements.


The local trading environment in the first half of the financial year was characterized by liquidity challenges and depressed demand, with the distribution business being the most affected. Despite the difficult operating environment, the Group continued to resiliently serve its markets registering volume growth in TV Sales & Home, Restapedic Manufacturing, Legend Lounge as well as Transerv. The Group continues to implement strategies to increase its volumes in the Distribution business in Zimbabwe by serving both the formal and informal market channels.

The exchange rate depreciated by 27% during the half year amidst constrained liquidity and pricing distortions in the market, which negatively impacted consumer demand across the formal sales channel during the period. The Group was affected by delays in the settlement of the bids on the foreign currency auction. The auction market was also closed on the 16th of December 2023 with the Group still having unsettled auction payments.

Malawi continues to face challenges of foreign currency and the Malawian Kwacha devalued in November by 44%. The International Monetary Fund “IMF” approved the long-awaited Extended Credit Facility equivalent to US$175m over a 4-year period. This is expected to stabilize the foreign currency situation to some extent.

Zambia has been experiencing a fluctuating exchange rate with the rate which was ZMK17.75 to the US$ in June 2023 moving to ZMK25.98 in December 2023. This had a negative effect on our Zambian operations as our suppliers are foreign and also resulted in loss of value on overall net assets of the business.


The Group reported revenue of US$97.246 million during the period, representing a 4% decline compared to the prior period last year. Despite the decrease in revenue, the gross margin increased by 5% from the prior year. Operating expenditure increased by 5% over the comparative period due to inflationary pressures on both local currency and United States dollar costs. The Group posted an operating profit of US$12.922 million, representing a 5% increase on the comparative period. Profit after tax of US$6.030 million was reported, which was 7% above the prior year. Basic Earnings Per Share and Headline Earnings Per Share of 0.64 US cents both improved by 11% on the comparative period.

The Group’s statement of financial position remained strong. Net current asset position increased by US$0.991 million whilst borrowings increased by 47% to close off at US$18.934 million.

The Group generated cash of US$9.74 million from operations, representing an 87% increase on the comparative period. This translated into enhanced free cash generation enabling the Group to incur capital expenditure for the period totaling US$2.23 million. The Group increased its shareholding in Transerv from an effective 50.51% to 87.75% with effect from 1 July 2023 for a purchase consideration of US$1.8 million.


The Group continues to apply the Global Reporting Initiatives (GRI’s) Sustainability Reporting Guidelines as part of its commitment to ensuring the sustainability of its businesses. The Group will continue to uphold these practices and values across its operations to ensure that long-term business success is achieved in a sustainable manner.


The main operating business units in the Axia Corporation Limited Group are TV Sales & Home (TVSH), Distribution Group Africa (DGA) and Transerv. TVSH is Zimbabwe’s leading furniture and electronic appliance retailer with sites located countrywide. It has manufacturing business units namely Restapedic, a bed manufacturing business and Legend Lounge, a lounge suite manufacturing business. DGA’s core areas of expertise lie in inbound clearing and bonded warehousing, ambient and chilled warehousing, logistics, marketing, sales, and merchandising services. Transerv retails automotive spares and accessories through retail stores and fitment centers to service the needs of its customers.

TV Sales & Home

The half-year revenues are up by 6% compared to the prior period and this is on the back of 11% volumes growth.

Most operating costs incurred during the period were indexed to the US$ resulting in significant growth against the prior year. Some measures are being taken to curb rampant increases in overheads.

The first TVSH outdoor world garden function store opened its doors to the public in November 2023. The response from customers has been positive, however a lot of work needs to be done to optimize the product range in this new store concept.

A second Bedtime store opened at Sam Levy Borrowdale, Harare in December 2023. The store’s outlook and feeling has come out well and with the right product mix and customer awareness of the store location, management are positive that this store will do well in the future.

Volumes for the second quarter at Restapedic improved by 58% resulting in the quarterly turnover growth of 30%. Year to date volumes and turnover increased by 57% and 32% respectively. Growth in margins of 21% is below turnover growth as the business reduced its pricing to remain competitive.

An automatic conveyor system at the newly completed Sunway City factory is now in place and enhancing production efficiencies. Civil work at the factory is almost done with minor work being done to complete the office admin block.

Legend Lounge’s revenue grew by 16% on the back of volume growth of 34% against the comparative period. The management restructuring that was implemented in the last financial year resulted in better control of operating costs.

The unit is now producing above the minimum required lounge suites per month. The new cut and sew and fabric lines acquired are expected to be delivered towards the end of the 2024 financial year. The Group will see improved capacity utilization with limited requirements for further capital expenditure in the future.

Management is continuously focusing on volume growth and improving gross margin dollars.

Distribution Group Africa (DGA)- Zimbabwe

Volumes for the period were 39% below the comparative period and this resulted in a decline in revenue.

Trading was depressed due to formal traders failing to adhere to agreed payment terms, which adversely affected the working capital cycle of this business as the majority of its products are imported. Operating costs were under control resulting in improved operating profit. Post the reporting period, there has been improved demand from the formal sector which is encouraging.

The business continues to redefine its models with the objective of safeguarding and growing shareholder value.

Distribution Group Africa – Region

In Malawi, the business had a good start to the financial year as it saw revenue growth of 42% in US$ terms and 90% in Kwacha terms against same period last year. Volumes recorded a 26% growth over the same period with key principals recording double digit growth in spite of foreign currency challenges.

Management remains focused on plans to generate foreign currency to settle foreign suppliers so as to improve trading.

In Zambia, turnover increased by 18% in Kwacha terms and a 7% decline in US$ terms whilst volumes increased by 2% on the comparative period. The gross margin percentage, however, decreased due to sustained margin pressures from large customers. The Zambia Kwacha has depreciated 22% against the US Dollar and 24% against the South African Rand from the end of the September 2023 quarter to the end of the December 2023 quarter. The cumulative depreciation for the financial period to the US$ and South African Rand stands at 46% and 51% respectively. Notwithstanding this, the Zambian entities have continued to source foreign currency adequate to meet their requirements.

The depreciation of the Kwacha combined with inflation (and associated consumer spending constraints) had a negative impact on bottom line. The Group has continued to manage monetary assets and liabilities as well as implementing tighter working capital and treasury management strategies.


During the six months ended 31 December 2023, Transerv’s revenue increased by 8% on the comparative period on the back of an 8% increase in volumes. The increase in revenue is as a result of the rapid expansion in the company’s retail footprint.

Eight new stores in Harare were opened during the period under review. The business prospects remain positive with the increase in vehicle population and increased demand for automotive spares. During the period, the business unit introduced solar products and the sales statistics are encouraging. The business unit will continue to grow solar product offering into the foreseeable future.


It is hoped that the suspension of the auction system will lead to a market-driven exchange rate regime.

The Group remains hopeful that disciplined and progressive policies will be adopted to foster stability in the market and build confidence. The Group’s management teams will focus on managing gearing levels, executing expansion opportunities, broadening product range, balancing pricing and volume objectives, achieving growth of margin, managing operating costs in light of the environment, and ensuring maximum free cash generation.


The Board has declared an interim dividend of US$0.0018 (0.18 US cents) per share in respect of all ordinary shares of the Company. The dividend is payable in respect of the interim period ended 31 December 2023 and will be paid in full to all ordinary shareholders of the Company registered at close of business on the 19th of April 2024. The payment of this dividend will take place on or around the 26th of April 2024. The shares of the Company will be traded cum-dividend on the Victoria Falls Stock Exchange up to the 15th of April 2024 and ex-dividend as from the 16th of April 2024.

The Board has also declared an interim dividend totaling US$50,000 to the Axia Employee Trust (Private) Limited which will be paid on or around the same date.


I express my sincere gratitude to the Board of Directors, executives, management, and staff for their ongoing efforts during the period under review. Their commitment, despite the challenging operating environment, is greatly appreciated. I also take this opportunity to thank the Group’s valued customers, suppliers, and other stakeholders for their continued support and trust.

21 March 2024

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Axia Corporation Limited (AXIA.vx)

Share price: 7.02 US cents (0.02 | 0.29% – 27/05/24)

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