Axia unit injects US$4.5m in bed factory
LIVINGSTONE MARUFU
Axia Corporation’s unit, TV Sales & Home (TVSH), has injected US$4,5m in a bed factory in Sunway City as the group moves to boost production at its cash cow.
The construction of the 10,000 bed production facility comes after the unit increased its stake in bed maker, Restapedic, to 60% from 49%.
“This increase in shareholding enabled Restapedic to invest in a 10, 000 bed production facility which is under construction in Sunway City, Harare and is estimated to cost US$4.5m with the completion of factory estimated to be November 2022,” Ngwerume said in a statement accompanying Axia’s financial results for the six months to December 31, 2021.
Ngwerume said the lounge suite manufacturing business was on a positive trajectory with revenue and volume performance up 369% and 325% respectively from the comparable period in 2020.
He said TVSH remained focused on giving its customers a world class experience in its retail stores as evidenced by completion of store refurbishment works in Gweru during the period under review.
Store refurbishments, Ngwerume said, would continue during the second half of the financial year.
“The business will continue to expand its retail footprint with a target to open two new retail stores in Harare and one in Bulawayo in the second half of the financial year,” he said.
Ngwerume said the management would continue to apply mitigatory means to ensure that inflation coupled with the effects of the pandemic do not negatively affect the business’ objective of consistent quality product supply.
He said the TVSH group remained focused on driving revenue by taking full advantage of the significantly eased lockdown restrictions since September 2021 although the Covid-19 pandemic continued to pose a myriad of risks.
Revenue for the group in the reviewed period grew 14% to ZWL$16.87bn from ZWL$14.81bn reported in the prior comparative period.
Axia also more than doubled its profit to ZWL$1.752bn during the reviewed period from ZWL$807m reported in the comparative period due to a good performance across all units.
Ngwerume said the business was able to capitalise on the resumption of normal working hours and improved supply chains.
The debtors’ book grew by 102% in value and collections on the book have remained solid, he said.
Ngwerume said business activity improved across the region before the onset of the fourth wave in December 2021 with the easing of Covid-19 lockdown restrictions.
Improved business activity resulted in the group businesses recording volume growth except for the distribution businesses in Zimbabwe and Zambia.
In Zimbabwe, the consumer disposable income benefited from increased economic activity driven by infrastructure spending, improved mining activity and better agriculture output, Ngwerume said.
The increased use of foreign currency in the local market enabled the businesses to generate foreign currency which would help the group to undertake critical capital investments, he said.
Ngwerume however said the widening of the gap between the official auction and parallel market exchange rates present pricing and value-preservation challenges to the businesses.
He said management would continue to adapt business units’ operating models to manage business growth and sustainability.
In the outlook, the group is also looking forward to the execution and completion of its exciting opportunities – bed and lounge suite production facilities, expanding retail store networks as well as optimising major distribution agencies in Zimbabwe and the region.
