- TVSH sales volumes down by 30%
- Business looking into entering export market
- Transerv sales dropped by 46%
Harare – Axia Corporation Limited’s (Axia)’s TV Sales and Home (TVSH) business operations have remained positive despite seeing a decline in sales volumes in the half year ended 31 December 2019.
According to a HY2019 results publication, TVSH’s sales volumes were 30% lower than the comparable prior period’s on the back of continued low demand due to the decline in consumer purchasing power as inflation continues.
However, the Group said the business is witnessing a good volumes recovery post 31 December 2019 with its drive to increase credit sales having paid off resulting in the positive growth in a shrinking market.
The retailer’s turnover was down by 7% while operating profit grew by 12% in the period under review.
Axia’s Chairman, Luke Ngwerume said TVSH’s focus on local products has been yielding positive results as production costs remain lower than regional competition.
Bed maker, Restapedic continues to produce good volumes and a new plant and machinery is being installed to gear for export markets.
Local companies with exposure to foreign markets have been performing better than those with no export businesses as the lack of forex in the country persists.
Furniture manufacturer Legend Lounge started production in the period under review and the market has welcomed its product offerings which provide options in furniture that were locally unavailable with production in this business expected to increase in preparation for the export market.
TVSH opened two new stores during this period, one in Victoria Falls and another in Rusape while two more are set to open in the last quarter of the financial year, in Mutare and Harare.
Transerv, Axia’s automotive spares and accessories retailer recorded a significant slump in sales volumes which declined by 46% in the period under review compared to the comparable prior period.
The decline was attributed to pricing pressures in the current economic environment as the vast majority of the retailer’s stock is imported.
The volatile operating environment remained challenging in the period under review characterised by the re-emergence of hyperinflation, shortage of foreign currency, the weakening of the Zimbabwean dollar and liquidity constraints.
Some of Transerv’s product lines suffered a slowdown in stock turn due to the continuously declining consumer disposable incomes.
Mr Ngwerume said the focus will remain on trading fast-moving products and the business has remained profitable.
“Despite the difficult environment, the business has managed to maintain its network of 24 trading outlets, 15 Fitment Centers, a diesel pump room (ADCO), a Clutch and Brake Specialists (CBS) and an Autocycle Centre”, he also said.
The Group is optimistic about the long-term prospects and growth potential of the country, in spite of the current economic challenges
Axia operates within the speciality retail and distribution sector and is the parent company of TV Sales and Home, Transerv, Distribution Group Africa Zimbabwe and Africa.
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