Axia’s markets battled currency headwinds during the period, with the Zambian Kwacha depreciating by 37% against the US$ between June 2023 and June 2024 whilst the Malawian Kwacha depreciated by 69% on the official market. In Zimbabwe, persistent foreign currency shortages and competition from informal markets impacted demand for FMCG products. However, TV Sales & Home (TVSH) volumes grew 15%, benefitting from increased brand visibility, new store openings and improved product offering, resulting in 7% revenue growth y/y. Production ramped up 47% at the new Restapedic facility and strong market demand saw volumes rising 54% y/y, with revenue 31% ahead of the prior year. Legend Lounge revenues were 6% higher on the back of a 15% increase in volumes. Transerv continued to expand its footprint and opened eight new retail stores, three new container shops, an in-store agent and two service centres; the unit resultantly recorded 6% increase in volumes and 11% revenue growth. Meanwhile, DGA Zimbabwe experienced suppressed trading largely owing to informalisation and restructuring of the unit. Consequently, volumes plummeted 45%, with revenue falling 23%. In Malawi, DGA volumes remained flat owing to foreign currency shortages but price increases led to 9% revenue growth in US$ terms. Volumes fell 14% in Zambia impacted by price increases implemented to cushion against inflation, which compounded with depreciation of the Kwacha resulted in 11% decline in revenue in real terms. Overall, the group’s revenue retreated 4.86% to US$193.85mn from US$203.75mn in FY23. TVSH contributed 36% of revenue with DGA Zimbabwe following at 25%. Operating expenses were driven up 5.87% by inflationary pressures. EBITDA fell 5.75% to US$19.65mn, with EBITDA margin for the period remaining flat at 10.13% (FY23: 10.23%). Significant once-off expenses were incurred through the DGA restructuring and inventory balances were written off as a result of the final reconciliation processes. The Group consequently closed the period with a PAT of US$5.96mn, 4% below the prior period (FY23: US$6.18mn). Total borrowings increased by 58.76% to fund working capital and capex, despite Axia generating net cash of US$7.93mn from operations. The Board resolved to reinvest its free funds towards expansion projects and therefore did not declare a final dividend.
