Axia Corporation Limited (AXIA.zw), listed on the Zimbabwe Stock Exchange has released its FY2018 results. Below is an excerpt from the results on the Distribution Group Africa division:
Distribution Group Africa – Zimbabwe
The Zimbabwean distribution group houses a number of leading brands such as Colgate, Kellogg’s, Johnson & Johnson, Tiger Brands, Unilever, Rhodes, Pioneer, Irvines, Probrands and Pepsi. The business delivered a reasonably good set of results despite the issues of local supply stock outs, import permits, settling foreign suppliers as well as once-off charges processed during the financial year. DGA Zimbabwe recorded a 17% revenue growth over the comparative period owing to acquisition of subsidiary companies, Hat On and Baobab, as well as growth in existing business. Operating profit was 25% up from prior year. As reported at half year, DGA (Zimbabwe and Region) was named as the 2017 ‘Johnson & Johnson – Distributor of the year in Africa’, the 2017 ‘Colgate Palmolive Best Modern Trade Distributor in Africa’ as well as a couple of awards from other principals like Pioneer Foods and Varun Beverages (Pepsi). This is as a result of management’s drive to grow volumes.
Management recognises that there remains a number of cases of duplicated functions and processes within the distribution group. Therefore, focus will also be directed towards rationalising these as necessary to enhance monitoring and control of this operation. Management is optimistic that by addressing control weaknesses noted during the year, profitability should increase in the fourthcoming year.
Distribution Group Africa – Region
The regional operations reported a mixed set of results. Due to the competitive nature of the environment in the region, the growth in turnover did not translate into the desired profit return. Despite this, regional operations remain a critical component of the Group’s distribution footprint to represent agencies held in Zimbabwe.
Malawi
Malawi recorded revenue growth of 32%, buoyed by an increase in the formal retail sector and the introduction of new principals such as Nestle and the re-launch of the Colgate Toothpaste 35g product. Growth in revenue filtered through to gross margin resulting in an increase in operating profit.
Zambia
In Zambia, revenue grew by 32% as a result of introduction of new product lines such as Fruit Tree and Tiger Brands. The growth was however achieved at low margin coupled with significant stock write offs on the back of the weakening local currency resulting in the business making a loss for the year. The business however retained all agencies and is well placed to continue servicing the Zambian retail sector.
