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, and this press release is an extract thereof. The audited 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.
AUDITOR’S STATEMENT
This short-form financial announcement should be read in conjunction with the complete set of the financial results for the year ended 30 June 2025, audited by BDO Zimbabwe Chartered Accountants and an unqualified opinion has been issued thereon. The audit opinion has been made available to management and those charged with governance of Axia Corporation Limited. The Engagement Partner responsible for the audit is Mr. Davison Madhigi (PAAB 0610).
OPERATING ENVIRONMENT AND OVERVIEW
The operating environment prevailing during the financial year was characterized by inflation, unstable local currency in the first quarter of the year, tight liquidity and softer consumer spending. The local currency was officially devalued by 43% in September 2024, this devaluation resulted in substantial financial losses amounting to US$ 2.287m being incurred for the Group especially on the ZWG Treasury Bill instruments arising from outstanding auction funds. Post the devaluation, it was relatively stable, a direct result of the measures introduced by the Central Bank.
Local currency nominal lending rates ranged from 40% to 50%, while foreign currency rates for corporate clients were between 11% and 15%. The refinement of the Willing-Buyer Willing-Seller (WBWS) foreign exchange interbank market in the latter half of the year, coupled with the removal of the penalty for transacting at rates outside the central bank’s official band, has significantly boosted market stability and had a positive impact on formal retailers.
A major risk identified and reported on in past statements, was the proliferation of counterfeit products in the country. Authorities have stepped up to deal with this menace which, in certain cases also poses health risks for unsuspecting consumers of food and hygienic products. The sale of counterfeit products has a negative impact on the demand for and sale of genuine products to the detriment of the fiscus. The authorities still need to do more to curb this menace.
In Malawi, the economy faced pressure from persistent inflation. The Reserve Bank of Malawi kept its policy rate high at 26% to control inflation, despite concerns over fiscal slippage and declining farm output. Additionally, the country’s growth was hindered by foreign exchange shortages and agricultural disruptions from recent drought.
In Zambia, the macroeconomic environment stabilized, with inflation gradually declining, supported by a firm monetary policy stance as the Bank of Zambia held its policy rate at 14.5%. The Zambian economy posted 4.5% growth in Q1 2025, driven by mining and agriculture recovery, with improving investor sentiments following debt restructuring progress. However, the high cost of borrowing and tight liquidity conditions continued to present challenges for retail and distribution businesses. The Zambian Kwacha remained flat against the US Dollar and depreciated by 2% against the South African Rand compared to the previous year. However, the Kwacha dropped by 15% over the first three quarters before recovering those losses in the final two months of the financial year. The rising interest rates during the period, combined with currency pressures, placed significant strain on financial performance.
FINANCIAL OVERVIEW
The Group reported revenue of US$196.473 million during the year, representing a marginal increase of 1% compared to the prior year. Despite the marginal increase in revenue, the gross margin increased by 4% from the prior year, a result of better cost of sales rationalization. Operating expenditure decreased by 8% compared to prior year due to better management of costs as well as impact of substantial once-off costs which were incurred because of restructuring the distribution business, as well as the significant debtor and inventory balances which were written off in the prior year which have not recurred. The Group posted an operating profit of US$25.899 million, representing a 32% increase on the prior year. Profit after tax of US$8.471 million was reported, which was 40% up against prior year. Headline Earnings Per Share of 0.91 US cents was 51% up on the prior year.
The Group’s statement of financial position remained strong with borrowings decreasing by US$4.470 million.
The Group generated net cash of US$7.818 million from operating activities, representing a marginal (1%) decrease on the comparative year. This translated into enhanced free cash generation enabling the Group to incur capital expenditure for the year totaling US$3.587 million mainly on completion of Restapedic factory, expansion of stores and additional delivery trucks.
SUSTAINABILITY REPORTING
The Group continues to apply the Global Reporting Initiatives (GRI’s) Sustainability Reporting Guidelines as part of its commitment to ensuring the sustainability of its businesses. The Group will continue to uphold these practices and values across its operations to ensure that long-term business success is achieved in a sustainable manner.
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 suite manufacturing business. Transerv retails automotive spares and accessories and solar products through its nationwide retail stores network and service centers. DGA’s core areas of expertise lie in inbound clearing and bonded warehousing, ambient and chilled warehousing, logistics, marketing, sales, and merchandising services.
TV SALES & HOME
Retail
TVSH recorded a 3% increase in revenue compared to prior year, driven by a 13% surge in volumes to 163,817 units. This growth was achieved through deliberate pricing strategies aimed at countering informal market pressures and enhanced product mix. The credit book grew by 34%, reflecting the company’s aggressive market share strategy through competitive credit terms. This translated into a 13% increase in finance income. The retail footprint also grew, with three new stores opening during the year while one was closed in July 2024, five additional outlets are planned for FY26, reinforcing the company’s commitment to national coverage and customer accessibility.
Bedding
At Restapedic, the bedding division delivered an impressive 18% revenue growth, supported by a 25% increase in volumes to 52,595 units. This performance was fueled by expanded distribution channels and growing brand equity, with Restapedic increasingly recognized for its quality and reliability. The business is poised to enter new market segments in the upcoming financial year, leveraging its strong foundation to drive further growth.
Lounge
The Restapedic lounge & suite division experienced an 11% decline in revenue, aligned with a 10% drop in volumes to 5,484 units due to production disruptions. However, the business is set for a turnaround, while relocation to the new production facility at our Sunway city Restapedic premises has been completed. This move is expected to unlock operational efficiencies and restore the division to a growth trajectory.
TRANSERV
Transerv recorded a 5% increase in volumes to 3,148,860 units compared to the prior year resulting in 18% revenue growth. Average dollar spend per customer has increased due to high value products being sold in the current year when compared to prior year. The number of retail shops increased with the opening of eight new shops in the current year while seven shops are expected to be rolled out in the coming year.
The retail division which is our core business registered a growth of 14% year on year, pointing to recovery of market share in our core business.
The specialized division experienced substantial growth at 84%, year on year, largely driven by improved performance of fitment centers and contribution from the solar division in the first half of the year. Our expanded product range continues to benefit the business, and management continues to respond to market trends and expand product range.
DISTRIBUTION GROUP AFRICA (DGA) – ZIMBABWE
The distribution business recorded a 44% decline in sales volumes to 2,661,348 units resulting in an 11% decline in revenue. This decline includes the effects of the restructured business which was moved into a Joint Venture in the prior year. On a like for like basis, excluding the effects of the restructured business in the prior year numbers, the revenues grew by 44%. Concerted efforts were made to push key profitable agencies both in the formal and informal markets, and the company continues to face significant competition in the informal markets where some competitive players have no customs duty or output VAT to settle, hence price competition is stiff. Towards the second half of the year, the business has seen a gradual resurgence of the formal market, and we continue to strategize to capitalize on this. Management have entered into a contract with a key agency for sole distributorship and its impact will be fully realised from the second quarter of the ensuing financial year.
DISTRIBUTION GROUP AFRICA – REGION
DGA Malawi achieved a 25% volume growth, increasing to 2,433,812 units. In dollar terms revenue declined by 15% compared to prior year as a result of significant currrency depreciation. This performance was driven by strong contributions from key suppliers. The business maintained exceptional trade coverage across all retail channels, with robust execution on the ground continuing to be a competitive advantage. These strengths are expected to carry the business forward, even in the face of challenges such as grey products, direct imports by some customers and foreign currency shortages. Strong collaboration with suppliers and more concerted efforts to generate foreign currency has helped to mitigate the impact of these challenges.
DGA Zambia recorded a 6% decline in volumes for the financial year, with total units sold amounting to 700,939 which also led to a 5% decline in revenue. The decline in both volume and revenue was primarily due to price increases implemented during the year, which, coupled with widespread inflation in the economy—particularly in the first three quarters—negatively impacted consumer affordability. The business faced
limitations in its ability to fully align pricing with currency depreciation, due to increased substitution by newly introduced, lower-priced locally manufactured alternatives, especially in the informal market. Competitive pressures also intensified. This environment further constrained our ability to implement necessary price adjustments. The business has on-boarded some agencies for locally manufactured goods as well as new multinational agencies that are in the pipeline to support volume growth in the up coming FY26 financial year.
PROSPECTS
The Group will continue to pursue a growth strategy in all its business units. To achieve this, we will continue to direct our efforts on our product offerings. Central to this goal is the ongoing focus on the quality of our products. We will look at increasing the range of our products to meet growing customer needs and at the same time attend to new market segments. We will seek growth in sales volumes through competitive pricing of our products, realizing that the local customers have options to source products from competitors both local and regional. To this end, the Group will work closely with its suppliers to ensure the delivery and sustainability of this competitive pricing model for its customers both locally and within the region.
The Group will continue to expand its footprint in order to bring convenience to our customers across the countries in which we operate. Several branches will be opened in the new year by TVSH and Transerv as alluded to above. Digital channels will be consolidated and expanded to improve customer access to our various products.
In manufacturing, the relocation of the furniture making operations to the Sunway City manufacturing facility should result in synergistic benefits for both the bedding and furniture making operations. This should contribute to efficient and cost effective production processes thus enabling the Group to produce price competitive quality products.
There will be continued focus on generating free cash across the Group in order to fund the growth initiatives. Appropriate attention will be given to the financial position of the group with the clear intention to maintain its strong position. In today’s dynamic economic climate, the Group is focused on a dual-pronged financial strategy: maintaining a strong financial position while using strategic borrowing to fuel growth. This approach allows us to ensure long term stability and resilience while continuing to invest in key initiatives that drive our market leadership.
During the year under review a lot of attention was paid to human capital issues with a view to enhancing productivity. Staff were put through intense training programs as new approaches were introduced. The impact of this transformative program on productivity and the resultant focus by staff on profitability is very encouraging. The Group is looking forward to a very productive year ahead.
DIVIDEND
The Board of Directors is pleased to announce a final dividend of US$0.0016 (US0.16 cents) per share for the financial year ended 30 June 2025. This brings the total dividend for the year to US$0.0028 (US0.28 cents) per share. The final dividend will be paid in full to all ordinary shareholders of the company registered at the close of business on Friday, 10 October 2025. The payment of this dividend will be effected on or around Friday, 17 October 2025. In accordance with the regulations of the Victoria Falls Stock Exchange (VFEX), the shares will be traded cum-dividend up to and including Wednesday, 8 October 2025, and ex-dividend as from Thursday, 9 October 2025.
The Board has also declared a final dividend of US$40,000 to the Axia Employee Trust (Private) Limited which will be paid on or around the same date.
APPRECIATION
I express my sincere gratitude to the Board of Directors, executives, management and staff for their ongoing efforts during the year under review. Their commitment, despite the challenging operating environment, is greatly appreciated. I also take this opportunity to thank the Group’s valued customers, suppliers and other stakeholders for their continued support and trust.
L.E.M. NGWERUME
Chairman
25 September 2025
