CHAIRMAN’S STATEMENT AND REVIEW OF OPERATIONS
DIRECTORS’ RESPONSIBILITY
The Directors of Axia Corporation Limited are responsible for the preparation and fair presentation of the Group’s
consolidated financial statements. The six months financial statements have been prepared in accordance with
International Financial Reporting Standards (“IFRS”) and in the manner required by the Companies and Other
Business Entities Act (Chapter 24:31) and the Victoria Falls Stock Exchange (“VFEX”) listing requirements.
The principal accounting policies of the Group are consistent with those applied in the previous annual financial
statements. The financial statements comply with International Financial Reporting Standards (IFRS). Complying with IFRS achieves consistency with the financial reporting framework adopted by the Company and the Group since its inception. Using a globally recognized reporting framework also facilitates understandability and comparability with similar businesses and allows consistency in the interpretation of the financial statements.
OPERATING ENVIRONMENT AND OVERVIEW
The Zimbabwean trading environment in the first half of the financial year was largely stable, with minimal
movements on the exchange rate and an improved inflation outlook. The market witnessed a marked USD liquidity
improvement, culminating in a stronger demand for the Group’s products. ZWG liquidity remained constrained
throughout the first half of the financial year. The policy stance by the Reserve Bank of Zimbabwe to maintain
a tight lid on interest rates meant ZWG borrowing remained punitive with most players in the market opting to
repay and reduce their exposure to ZWG loans. The market perception remains cautiously optimistic about the
value preservation in the local currency and its true litmus test is when it holds value while being readily available
in everyday transactions. The increased conversations on ease of doing business and reducing the charges on
licenses and permits continue to be a welcome move to reduce the compliance cost for players in the economy.
As previously reported in past statements, counterfeit products continued to spread in the general economy
which negatively affects formal players and pose risks to consumers and there is need for authorities to continue
reinforcing actions to curtail this menace.
In Malawi, the Kwacha continued to weaken, depreciating by 7% against the US Dollar on the informal market
thereby worsening a high inflationary environment. High inflation rates driving up living costs, eroding purchasing
power, with measures to curb it resulting in elevated borrowing costs that hinder production and growth. Foreign
currency constraints remain a key risk in this market.
The Zambia Kwacha firmed up by 8% against the US Dollar, this in turn helped to drive inflation downwards on top
of a good farming season harvest and the recent reduction in energy cost.
FINANCIAL OVERVIEW
The Group reported revenue of US$122.031 million for the period, reflecting a 22% increase compared to the prior
period driven by competitive pricing that lifted demand. Gross margin improved by 10%, driven by competitive
pricing that met market demand. Operating expenditure increased by 15% mainly due to growth in staff overheads
as a result of new shops added and other variable costs.
The Group achieved an operating profit of US$15.323 million, representing a 4% increase compared to the prior
period. The distribution business recorded significant provisions for credit losses due to difficulties encountered in
the credit performance of some customers in the formal trade. This affected the growth of the Group’s profitability
levels. Profit before tax grew by 28% to US$8.814 million. TV Sales & Home recognised a significant income tax
provision during the period following an assessment by the Zimbabwe Revenue Authority (ZIMRA) relating to prior
financial periods. The resulting adjustment of US$1.017 million had a material impact on the Group’s profitability
and consequently increased the effective tax rate for the period. The Group exited its investment in two joint
ventures i.e. Prodistribution (Private) Limited and National Foods Logistics (Private) Limited at a total of US$3.028
million. This had an impact on the equity accounted profits recorded in the current period. Headline Earnings
Per Share at 0.61 US cents, reflecting 5% growth from the prior year. The Group’s statement of financial position
remained strong. The current asset position increased by US$6.450 million whilst borrowings declined significantly
by US$5.361 million from $15.977 million to close off at US$10.616 million.
The Group generated net cash of US$11.719 million from operations, representing a 239% increase on the
comparative period. This was a result of increased festive season demand. This translated into enhanced free
cash generation enabling the Group to incur capital expenditure for the period totaling US$1.497 million.
SUSTAINABILITY REPORTING
As part of our ongoing commitment to sustainable business practices, the Group continues to apply the Global
Reporting Initiative (GRI) Sustainability Reporting Guidelines across all operations. During the first half of the year,
we made steady progress in embedding these principles into our retail and distribution activities. Our focus
remains on balancing day‑to‑day operational performance with responsible environmental, social, and governance
practices. The Group remains committed to long‑term value creation that aligns sustainable growth with our
broader business objectives.
OPERATIONS
The main operating business units in the Axia Corporation Limited Group are TV Sales & Home (TVSH), Transerv and Distribution Group Africa (DGA). TVSH is Zimbabwe’s leading furniture and electronic appliance retailer with sites located countrywide. It has a manufacturing business unit, namely Restapedic, a bed and lounge manufacturing business. Transerv retails automotive spares and accessories through retail stores and fitment centers to service the needs of its customers through a nationwide network of retail stores. DGA’s core areas of expertise lie in inbound clearing and bonded warehousing, ambient and chilled warehousing, logistics, marketing, sales, and merchandising services it has operations in Zimbabwe, Zambia and Malawi.
TV Sales & Home Retail
TV Sales & Home posted strong trading results, with volumes increasing by 37% to 112,774 units, driving turnover
growth by 29%. The business experienced record turnover during the Black Friday and Christmas Ho-Ho Home
promotions with customer count increasing by 33% year on year and the credit book growing by 70% over same
period last year. Growth was primarily driven by the diverse and quality product range, competitive pricing and the
availability of competitive credit which enabled more customers to acquire the quality products that are offered.
Increased focus on e-commerce transactions and growth in credit book coupled by organic growth in store network
continue to be key pillars driving growth for this business. This strong performance is also driven by the opening
of new branches in Churchill, Mvurwi, Norton, and Hogerty, which broadened customer reach.
Restapedic Bedding
Restapedic bedding volumes grew by 26% to end at 32,315 units, and this translated into a 29% increase in
revenues. Revenue per unit improved during the period under review owing to the sales mix. Increased visibility
in the market through engagement of distributors across the country both in the different market segments and
this improved market penetration. Shortages of quality timber and firming of the South African Rand against the
United States of America Dollar remain challenging for the business though management is consistently proactive
to ensure adequate supply of quality bedding to the market is sustained at affordable prices.
Restapedic Lounge
The business recorded a 10% decline in sales volumes to end at 2 714 units. Revenue, however, increased by 5%
compared to last year. The factory production was adversely affected during the month of August 2025 when
the manufacturing plant was relocated to the new premises in Sunway City. New product offerings and tailoring
production to market demand have led to growth in high value lounge suites which improved the dollar revenues.
Plans are underway to maximize production to capacity by process optimization.
Transerv
The Company recorded a 8% increase in revenue on the back of a 16% increase in volumes to end at 1 825 789
units during the first half of the year compared to the same period last year. This growth is primarily attributed to four new shops opened during the period as well as sustained growth in core business. Improved stock management
has bolstered the performance of the retail division. Introduction of new products has also had a positive impact.
Seven sites are in the pipeline for new shops to open in the second half of the year.
Distribution Group Africa (DGA) – Zimbabwe
Revenue for the half year increased by 39% on the back of a 44% growth in sales volumes to end at 1 721 653 units.A major local agency was secured in October 2025 and this contributed to the revenue and volumes growth. Most agencies recorded modest volume and revenue growth during the period, reflecting improved market penetration and expanded distribution reach. The business continues to face significant price competition from grey imports.The influx of counterfeit products is also impacting volumes and margins in the general trade as well as sales in the wholesale market. We will continue to support the authorities in their efforts to clamp down on this menace. DGA Zimbabwe processed adjustments totaling US$1.829 million for allowance for credit losses and taxes in the second quarter which significantly affected the financial results reflecting a more prudent and accurate financial result. Ongoing efforts to restructure the business are in progress, in a way to simplify the way it operates thus controlling overheads, improving efficiency and profitability.
Distribution Group Africa (DGA) – Region
In Malawi, turnover increased by 50% in Kwacha terms, while a 12% decline in US dollar terms, was recorded
against a volume increase of 24% to end at 1 515 788 units. The volume growth is significantly driven by an agency which is settled in local currency. Concerted efforts to generate foreign currency together with collaboration with suppliers have helped to mitigate foreign currency challenges.
In Zambia, turnover in Kwacha terms increased by 12% for the period under review and 28% in US dollar terms, on the back of a 16% increase in volumes to end at 406 468 units. The strengthening of the local currency against the rand and the United States of America Dollar amplified the result.
PROSPECTS
This continued stability will enable better and effective planning and management of costs. The Group remains
committed to sustaining steady growth amid an evolving regional trading environment. In Zimbabwe, improved
local currency stability during the first half has provided greater operating clarity.
The Group will remain focused on improving its relevance to the market by offering quality products conveniently
at competitive pricing and thus continue to play a role in improving the quality of lives of our customers.
Our partnerships with retailers, both in the formal and the general trade, continue to strengthen, and this remains
critical as we face squeezing margin pressures while we aim at driving up volumes. The Group is seeing encouraging traction from our efforts to increase product availability and visibility across all markets.
The Group’s strategy to widen its product range and increase market share remains on track. The expansion of the
store network at Transerv and TV Sales & Home continues to contribute positively, with the newer stores maturing
well. In the coming months, we will focus on maximizing returns from these investments while directing free cash
flow towards expanding the debtors’ books in both businesses to support volume growth. In manufacturing, there
will be focus on improving productivity and cost management. It is anticipated that synergistic benefits will be
realized from the relocation of the Lounge furniture manufacturing operations next to the bedding manufacturing
operations.
Regional conditions remain mixed. The retail environment in Zambia is still challenging, and we continue to
manage stock levels and costs carefully. In Malawi, high inflation and the impact of shifts in the agricultural sector
have created pressure on consumer spending, we continue to explore ways of managing foreign suppliers with
dwindling foreign currency avenues. Management teams in each market remain focused on maintaining healthy
gearing levels, improving free cash generation, and protecting the balance sheet.
Across the Group, we continue to pursue growth opportunities in the furniture and automotive spares segments, as
well as securing new agencies within our distribution division. Improving returns on shareholders’ equity remains
a priority. By managing material and operating costs and maintaining a flexible approach to procurement and
sourcing, we aim to keep our products affordable and accessible. With disciplined execution and a focus on
customer needs, the Group is well positioned for a stronger performance in the second half of the financial year.
There will be continued focus on value creation with a view to enhancing productivity. The Group is looking forward
to a productive second half of the financial year.
DIVIDEND
The Board has declared an interim dividend of US$0.0020 (0.20 US cents) per share in respect of all ordinary
shares of the Company. The dividend is payable in respect of the interim period ended 31 December 2025 and
will be paid in full to all ordinary shareholders of the Company registered at close of business on the 10th of April
2026. The payment of this dividend will take place on or around the 17th of April 2026. The shares of the Company
will be traded cum-dividend on the Victoria Falls Stock Exchange up to the 8th of April 2026 and ex-dividend as
from the 9th of April 2026.
The Board has also declared an interim dividend totaling US$50,000, to the Axia Employee Trust (Private) Limited,
which will be paid on or around the same date.
APPRECIATION
I extend my sincere appreciation to the Board of Directors, executives, management, and all staff for their hard
work and commitment during the period under review. Their dedication, despite the ongoing challenges in our
operating environment, remains invaluable. I also wish to thank our customers, suppliers, and all stakeholders for
their continued trust and support. Their partnership remains central to the Group’s progress.
L.E.M. NGWERUME
Chairman
3 March 2026
