VICTORIA Falls Stock Exchange (VFEX)-listed retail enterprise Axia Corporation Limited, which said its next set of financial results will be presented in hard currency, recorded a 44% growth in revenue.
In a financial statement for the six months ended December 31, 2022, Axia reported revenue of $75,5 billion, a 44% growth.
This growth in revenue filtered into gross margins, which increased by 36% in the prior period.
“Operating expenditure increased by 54% in the comparative period due to indexing of cost base to the US dollar. The group posted an operating profit of $10,396 billion, representing a 16% increase on the comparative period.
“Profit before tax of $15,030 billion was reported which was 78% ahead of prior year. Basic earnings per share and headline earnings per share both improved by 61%,” the company revealed in its financial statement.
Axia said its financial statements for the year ending June 30 this year would be published in US dollars.
The company pointed out that it had recently listed on VFEX and was aligning with the listing requirements in terms of systems and financial reporting.
“The group has, therefore, also prepared financial results in United States dollars which are presented as supplementary information,” it said.
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Axia’s net borrowings declined by $2,78 billion on the back of high interest rates during the period.
The company’s generated cash was 3% down from the comparative period.
Positive free cash generation enabled the group to incur capital expenditure for the period totalling $2,7 billion.
The company’s subsidiary TV Sales and Home’s second quarter performance was up by 22% due to the successful market activation promotions namely Black Friday and Ho-Ho-Home.
TV Sales’ year-to-date volume performance increased by 3% compared to prior year and this was on the back of a disappointing first quarter performance which was affected by restrictive pricing pressures experienced in the first two months of the quarter.
Axia said the reintroduction of US dollar credit had resulted in a significant growth in the US dollar debtors book which increased by 382% between September 2022 and December 2022 with the potential to improve revenue streams in the last half of FY2023.
Two new stores were opened in Harare during the first quarter and plans are underway to expand the retail store network which includes opening new stores in the second half of the financial year coupled with upgrades to outlooks of existing stores to improve customer experience.
“At least three new stores will be opened in the second half of the financial year with a new store concept, Bedtime Store, opening its first store,” the company revealed.
Year-to-date volumes for Distribution Group Africa in Zimbabwe were 27% down as compared to the prior period and this resulted in a decline in revenue as a result of weaker demand in the formal sector. The management’s decision to stop supplying some customers to manage the risk on the extent of debtor balances also contributed to the reduction in volumes.
During the six months, Axia’s subsidiary Transerv recorded an increase in both revenue and volumes as it started recovering from the restrictive pricing challenges experienced during the first two months of the financial period.
Revenue was 3% below the comparative period.
“The company increased its store network by opening two retail stores in Harare. Plans are underway to open at least six shops in the 2023 financial year as the business continues with the drive to lead the market and ensure that customers continue to access quality products while enjoying shopping convenience,” it revealed.
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