AXIA seeks ways to drive growth across operations

Michael Tome

Business Reporter

AXIA is pursuing expansion and new opportunities across its diverse portfolio to drive growth in its furniture and automotive spare parts divisions.

This comes after the group reported a 2 percent revenue growth to US$99,7 million in the half-year period to December 2024.

Axia’s subsidiary, TV Sales and Home, which specialises in furniture and electronic appliances, delivered a robust performance.

Volumes rose six percent to 82 039 units, up from 77 252 units in the prior period.

An uptick in sales drove a corresponding 6 percent increase in turnover, highlighting the subsidiary’s strong growth momentum.

On the other hand, Transerv, which sells automotive spares, recorded a 27 percent increase in revenue on the back of a 4 percent increase in volumes in the period under review compared to the same period last year.

Growth in Transerv volumes is attributed to an increase in solar product sales and the expansion of the branch network.

However, its other subsidiary, Distribution Group Africa (DGA) Zimbabwe’s revenue declined by 25 percent as sales volumes reduced by 28 percent following the restructuring of operations.

Given the encouraging performance, Axia said it would expand its operations across various business segments of the group.

“Axia continues to aggressively look for opportunities for growth in the furniture and automotive spare parts business, as well as new agencies in the distribution business.

“The group is working on the exploitation of e-commerce opportunities and expanding access to our products for the convenience of our customers.

“Focus will be made on improving productivity in the manufacturing business and aligning product offering to various market demands,” said Axia Chairman Mr Luke Ngwerume in the group’s six-month financials to December 2024.

Axia’s gross margin grew by five percent, while operating expenses declined by 1 percent, driven by effective cost management strategies.

The group achieved a 14 percent increase in operating profit to US$14,7 million, driven by higher margins, reduced variable costs, and savings in overheads, while profit after tax declined by 12 percent to US$5,3 million, primarily due to foreign exchange losses resulting from the devaluation of the Zimbabwean local currency.

Axia generated US$7,2 million in cash from operations, representing a 26 percent decline from the prior period, attributable to increased prepayments for new stock lines.

Despite this, the company was able to invest US$1,1 million in capital expenditure programmes during the review period.

Both earnings per share (EPS) and headline earnings per share (HEPS) declined by 10 percent to 0,58 US cents.

According to Axia, the company’s balance sheet remains strong, with its net current asset position increasing by US$4,5 million and borrowings declining marginally to US$20,2 million.