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Michael Tome
RETAIL and distribution group, AXIA Corporation Limited’s subsidiary — TV Sales and Home — says it established a lounge suite manufacturing business in the third quarter of its financial year, as the firm continues to grow its backward integration into manufacturing.
This is subsequent to a $2,5 million acquisition of Maton (Pvt) Limited t/a Restapedic 49 percent shareholding stake in the bedding and manufacturing enterprise earlier this year.
Coupled with the latest lounge suite manufacturing business, these ventures are part of the group’s thrust to achieve organic growth and integration into manufacturing.
In a statement accompanying financial results for the year ending June 30, 2019, Axia said these acquisitions and diversification come on the back of an evidently harsh economic environment.
“The year under review was dominated by significant changes in the economic environment such as the introduction and floating of the ZWL$ against a basket of foreign currencies and the reintroduction of the sole legal tender for all domestic transactions, the Zimbabwean dollar among others changes,” said Axia.
These developments come on the back of a positive financial performance as the group reported a 182 percent jump in operating profit to close the year at $72,7 million from $26 million in the prior comparable period in 2018.
Revenue of $557,4 million was realised in the period under review from $276 million, translating to a 102 percent in the positive on the comparative year.
Axia’s profit before tax stood at $85,7 million, a 252 percent surge from $24,3 million last year.
The overall business managed to generate cash amounting to $48, 6 million, $38,5 million up from $10,1million in the comparative period translating to a 379 percent surge.
This was driven by mixed volume performance across operations with affirmative performance from TV sales and home, Distribution group Africa and Transerv.
TV sales and Home turnover growth was 88 percent above prior year driven by growth in both cash and credit sales.
This growth was attributed to operating efficiency in the appliances retail shop with credit business having a positive stretch until the last quarter of the financial year (April-June) when affordability became restrictive resulting in a slump in volumes uptake.
Distribution Croup Africa, which houses major brands like Colgate,Kellogs, Tiger brands, Unilever, Johnson, Pioneer, Probrands and Irvine’s posted a good set of results in the period under review recording a 114 percent turnover growth owing mainly to inflation driven price increase.
Transerv on the other hand recorded an overall revenue growth of 37 percent mainly driven by good pricing and product availability.
Bongani Ndlovu