- DGA Zimbabwe reported an 18% decrease in revenue and a 25% volume drop year-on-year
- Other segments, like TV Sales and Home, showed strong growth
- Axia's revenues from continuing operations soared by 42%
Harare-Axia Corporation Limited's Distribution Group Africa (DGA) segment has sustained a sluggish performance in the third quarter of FY2025, ended March 31, 2025, compared to the same period last year, which is likely to impact the group's profitability and FY performance.
Axia is a diversified retail group listed on the Victoria Falls Stock Exchange (VFEX) with renowned units like TV Sales and Home, which serves as the flagship asset, Transerv, Restapedic, and Distribution Group Africa.
Despite other units' positive performance, DGA underperformed across all units.
DGA Zimbabwe reported an 18% decrease in revenue and a 25% reduction in volume year-on-year, attributed to a major supplier establishing a joint venture for distribution, causing those sales to be excluded from DGA's consolidation.
"The decline is due to a major supplier who has partnered with DGA to form a Joint Venture to distribute its products, hence their sales are no longer consolidated as part of DGA sales," reads the trading update.
Similarly, DGA Zambia reported a 17% volume decline due to market volatility and currency depreciation, despite a marginal 6% increase in revenue, while DGA Malawi faced a 20% volume decrease on an annual basis.
The regions were hampered by exchange rate challenges and foreign currency shortages.
Despite these setbacks, Axia's diversified portfolio delivered strong performance in other segments, showcasing resilience in a challenging economic environment.
The flagship TV Sales and Home division led the charge with a 6% revenue increase and a 9% volume surge year to date, fuelled by competitive pricing and expanded credit sales.
The division strengthened its retail footprint by opening two new stores.
Restapedic, the bedding unit, posted a 16% revenue increase and a 24% volume surge, supported by a new Bulawayo distribution point and affordable bed production.
However, Legend Lounge, now a division within Restapedic, bucked the trend with a 10% revenue decline, as economic pressures pushed consumers toward cheaper alternatives, including counterfeit products from informal markets like Highglen and Glenview.
Operating at 99% factory capacity, Restapedic produces around 4,000 beds monthly, with plans for a new store in Glen View to sustain this momentum.
Transerv also performed strongly, recording a 21% revenue rise and a 6% volume increase, driven by growing demand for spare parts and oils.
Despite DGA's challenges, Axia's revenues from continuing operations soared 42%, reflecting successful penetration of new market routes.
The group's strategic initiatives, including a solar product line launched in Q4 2024, are already showing strong demand, highlighting its adaptability.
Although DGA's underperformance reveals areas needing improvement, Axia's overall growth trajectory places it in a strong position relative to regional competitors, solidifying its role as a dynamic entity in the diversified corporate landscape.
Equity Axis News
