CHAIRMAN’S STATEMENT
Dear Shareholder,
The stable macro-economic environment that flowed from the various measures taken by Government to stem the hyperinflationary tide improved business activity in the 2022 reporting period, thereby growing consumer demand and sales volumes above the figures reported in the 2021 financial year. However, the rise in prices of key inputs following the Russia/Ukraine war, and the low 2021/22 agricultural output poses risks to the economic outlook. Furthermore, currency depreciation and foreign currency shortages in Malawi and Zimbabwe remain a threat to the Group’s operations.
Despite these hurdles, the Group, maintains a positive long-term view and continues to seek opportunities to preserve and grow shareholder value. In the 2023 financial year, the Group will focus on the execution and completion of the bedding and lounge suite production facilities, the opening of new retail stores and the optimisation of major distribution agencies in Zimbabwe and the region.
To drive the impetus for growth in Zimbabwe and in the region as well as to protect and increase shareholder value, your board has proposed to move the Group Company’s share capital from the ZSE to the VFEX. The listing on the VFEX we believe would create an enhanced pathway to the participation of regional and international investors while enabling further penetration of more regional markets.
Amongst other advantages for the proposed listing on the VFEX are:
- Access to USD capital to assist Axia in its capital expenditure, working capital requirements and regional expansion initiatives.
- Free repatriation of dividends and proceeds from the disposal of shares through offshore settlement.
- Favourable tax incentives for investors of zero capital gains tax and a 5% withholding tax for foreign investors to enhance shareholder returns.
- A USD valuation of Axia allowing shareholders to realise the true value of their holdings.
- Lower trading costs of 2.12% compared to 4.63% on the ZSE.
Based on the above, your board recommends that Axia Corporation Limited migrates its listing from the ZSE to the VFEX.
12 January 2023
Luke Ngwerume
Independent, Non-Executive Chairman of the Board of Directors
