Axia Corp shrugs on reduced trading hours

AXIA Corporation’s retail operations recorded strong volume growth in the quarter to September 30, 2021, despite the first two months of the quarter being characterised by reduced trading hours.

The group, in a trading update, said foreign currency issues started to negatively affect operations towards the end of the quarter.

Axia expressed hope that sustainable, practical and progressive policies would be adopted by the Government to deal with the debilitating issues, adding the group was encouraged by the recent attempts by the authorities to work with the private sector in this regard.

“Despite the challenges, the group remains focussed on executing strategic initiatives and opportunities to continue to grow stakeholder value,” the company said.

During the period under review, the group’s flagship business, TV Sales & Home’s volumes grew by 36 percent compared to the same period last year and continue to trend upwards, benefiting from competitive pricing and consistent product supply.

The group added that volume growth was also a result of the positive momentum of credit offerings and exciting consumer promotions namely Winter Warmer, Birthday Bash and Euro 2020 that were active during the quarter.

According to the trading update, TV Sale & Home acquired an additional 11 percent in Restapedic, a local bed manufacturer, to increase its shareholding to 60 percent effective July 1, 2021 and this enabled the company to fund the construction of a new multimillion US dollar state-of-the-art factory, which commenced in August 2021.

“This new factory will result in the business growing its production to meet increasing local demand and service export markets. A new retail store is scheduled to open in Bulawayo by the end of the second quarter,” the group said.

At Transerv, volumes continued on a positive trajectory after coming in 25 percent above the comparative period as the business continued to closely manage its costs and review its product and service offerings with a view to keep improving the product range and quality service provided to customers.

“New store sites have been secured in Chiredzi and Victoria Falls.”
DGA Zimbabwe volumes were 20 percent below the prior comparative period mainly due to the restructuring of the original agreement with the Progroup.

The group noted that the resultant reduction in sales volumes from the Progroup agency was partly compensated for by the new distribution agreement that was executed with National Foods Retail distribution business and this agreement is a significant addition to the business.

In the region, DGA Malawi, first quarter volumes were 58 percent up compared to the comparative period, owing to the impact of newly acquired distribution agencies which came on board.

“Malawi has now become a significant contributor to the positive performance of the regional business,” the group noted.

In Zambia, the group noted that the kwacha appreciated against key supplier currencies such as the South African rand and United States dollar following the positive political sentiment after the recent Presidential election.

The appreciation of the exchange rate resulted in market-wide corrections of business cost bases which led to demand for price reductions and resultantly shrunk product demand.

“The business has since corrected its pricing positions in response to market conditions.
As a result, first quarter volumes in Zambia were 29 percent below those attained in the comparative period,” Axia said.
The report revealed that the hardware business where the Group is operating a hardware store as a joint venture with another industry player registered encouraging volumes with focus in the quarter have been on fast moving and essential hardware lines as well as supplying key lines for construction.

“Another store is set to be opened in the second quarter of 2022 under the same joint venture model,” the group said.

Axia said it anticipates economic recovery to be sustainable and will be anchored by conducive policies, which will not only support this recovery process, but will also contribute towards the stability of the exchange rate and at the same time keep inflation under control.-The Herald