SPECIALTY retail and distribution group, Axia Corporation Limited’s revenue for the year to June 30, 2018 grew 31 percent to $275 million on strong performance across board.
Operating profit amounted to $25,8 million representing a 46 percent growth above prior year.
At $24 million, profit before tax was 41 percent ahead of last year, notwithstanding substantial once-off legacy charges recorded in the distribution business.
According to Axia, most of these once off charges were incurred as a result of de-recognising some historical debtors and inventory balances that arose as a result of a compromised control and governance environment.
Profit for the year grew 31 percent to $16,8 million compared to $12,8 million achieved in the comparable period.
Basic and headline earnings per share for the year amounted to 2,02 cents.
Headline earnings were 47 percent above the comparative period and when adjusted for income earned on the derivative option, were 28 percent above prior year at 1,76 cents.
Capex for the year under review amounted to $3,9 million while net borrowings increased by $10,5 million. This was mainly to support strategic working capital investments resulting in increased gearing.
Axia’s main operating business units, TV Sales and Home (TVSH), Distribution Group Africa (DGA) and Transerv all recorded earnings growth for the year under review.
TVSH recorded a turnover growth of 36 percent on the back of a 19 percent increase in units sold driven by a significant growth in cash and lay-by sales.
The instalment debtor’s book decreased by 11 percent over the comparative period as sales slowed in the first half of the financial year.
At DGA Zimbabwe, revenue growth of 17 percent was achieved owing to acquisition of subsidiary companies, Hat on and Baobab as well as growth in existing businesses.
Operating profit was 25 percent above prior year. The business recorded a commendable performance despite challenges arising from local supply stock outs, import permits, settling foreign suppliers as well as once-off charges processed during the financial year.
DGA Africa operations recorded mixed results. Due to competitive nature of the environment in the region, the growth in turnover did not translate into the desired profit return.
Malawi and Zambia each recorded revenue growth of 32 percent and remain a critical component of the group’s distribution footprint to present agencies held in Zimbabwe.
At Transerv, revenue grew 31 percent against prior year. Due to right pricing and product availability, volumes increased in the last quarter of the year.
The one-stop concept of paired retail and fitment centres is providing convenience and efficiency and management indicated focus will remain on procuring the right stock mix and the right price.
The group also intends to maintain its goal of achieving organic and acquisitive growth, improve margins, grow volumes, generate free cash and continue to operate profitably as well as create stakeholder value.
Axia declared a final dividend of 0,32 cents a share.