Axia unit bullish about future growth
Axia Corporation Limited’s furniture business –TV Sales & Home, expects to maintain its current
growth trajectory during the financial year 2023 and beyond on the back of investment it made in
manufacturing capacity, which will broaden product offering.
In July last year, TV Sales & Home increased its shareholding in Restapedic to 60 percent from 49
percent for an amount of US$860 000.
The increase in shareholding has enabled Restapedic to invest in a 10 000-bed production facility,
which is under construction in Sunway City, Harare.
According to chairman Luke Ngwerume, significant progress has been made in the construction of
the new bedding factory facility, which is set to open in January or February 2023.
During the year to June 30, 2022, Restapedic experienced intermittent raw material supply gaps
attributed to delays in the auction payments which negatively impacted the imports supply chain
resulting in a downturn in volumes during the fourth quarter.
The bedding business, however, attained revenue growth of 33 percent and marginal growth in
volumes compared to prior year. The completion of the 10 000 bed facility in Sunway City is
however expected to increase production capacity for the group, as it works towards meeting
demand.
Another focus area for the group is the expansion of Legend Lounge – the suite manufacturing
business, which should see a wider product range in line with customer needs and tastes.
“The expansion of Legend Lounge’s manufacturing capacity remains a key focus with sustained
investment in new product development as well as re-engineering of the entire lounge suites range
to enhance customer experience,” said Mr Ngwerume adding revenue and volume performance for,
Legend Lounge, increased by 212 percent and 231 percent to the comparative period respectively.
The group is also looking at expansion of the retail stores network. Already, the business increased
its store network by opening a new store in Bulawayo during the year to June 30, 2022.
“Plans are underway to enhance the retail store network which include opening new stores in the
coming financial year coupled with upgrades to outlooks of existing stores to improve customer
experience.
“Two new stores were opened in Harare in the months of July and August 2022. Volumes are
expected to recover in the new financial year following the addition of a new home appliances and
homeware distribution business at the end of the year under review,” said Mr Ngwerume.
Overall, TV Sales & Home recorded revenue growth of 38 percent to prior year whilst volume
performance increased by 8 percent over prior year.
According to the group, year on year volume growth benefited from a consistent and broad product
offering as well as successful market activation promotions rolled out during the financial year.
Fourth quarter volume performance, however, was 8 percent below the comparative period as the
June volumes and sales were below expectations due to the inconsistent pricing of goods in
response to the unstable exchange rate which exerted pressure on pricing.
Said Mr Ngwerume: “The hiatus caused by authorities’ clampdown on currency rates has resulted
in a proliferation of informal trading and grey imports.”
Collections on the debtors’ book have remained solid although growth has, however, continued to
slow down in the last few months given the prevailing high interest rates.
Mr Ngwerume said management will continuously assess the business’ credit model to deliver
affordable credit offerings to customers, in both local and foreign currencies.-The Herald
