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Business Reporter

DIVERSIFIED Victoria Falls Stock Exchange (VFEX) listed specialty homeware furniture and electrical appliance retailer Axia saw its gross margin grow by 36 percent driven by growth in revenues in the half year to December 31, 2022.

Group revenue totalled $75,555 billion during the period, translating to a growth of 44 percent compared to the comparative period in 2021.

In a statement of results for the period under review Axia board chairman, Luke Ngwerume said, “The revenue growth filtered into gross margin, which increased by 36 percent in the prior period. Operating expenditure increased by 54 percent in the comparative period due to indexing of cost base to the US dollars.”

The group posted operating profit of $10,396 billion, representing a 16 percent increase on the comparative period.

“Profit before tax of $15,030 billion was reported, which was 78 percent ahead of prior year. Basic Earnings Per Share and Headline Earnings Per Share both improved by 61 percent,” Ngwerume said.

According to the chairman, Axia’s statement of financial position remained solid as net borrowings decreased by $2,78 billion mainly due to high-interest rate increases during the period.

The group generated cash of $8,362 billion from operations, which however was 3 percent down from the comparative period.

Positive free cash generation enabled Axia to incur capital expenditure for the period totalling $2,7 billion.

According to Mr Ngwerume, the critical interventions undertaken by both fiscal and monetary authorities since mid last year helped stabilise the exchange rate during the period.

“The group was affected by the high local currency interest rates during the first quarter and management embarked on an aggressive repayment program to reduce the resultant finance costs. The second quarter witnessed subsided inflation and exchange rate volatility and this resulted in increased foreign currency transactions,” he said.

Whilst the prevailing stability has had a positive bearing on the trade and general business confidence, Axia says that complexity remains in the form of constrained liquidity and pricing distortions, which negatively impacted consumer demand across the formal sales channel during the period. Regionally, the Zambian economy remains relatively stable although the exchange rate has been volatile since December 2022, whilst in Malawi, the economy was affected by huge foreign currency shortages, with official currency exchange rate depreciating by 25 percent during the period.