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Axia unit optimistic about future growth


the herald

business journalist

Axia Corporation Limited’s furniture business, TV Sales & Home, expects to maintain its current growth trajectory in fiscal 2023 and beyond through the investments it has made in manufacturing capacity, which which will expand the product offering.

In July last year, TV Sales & Home increased its stake in Resttapedic to 60% from 49% for $860,000.

The increase in shareholding has enabled Resttapedic to invest in a 10,000-bed production plant, which is under construction in Sunway City, Harare.

According to Chairman Luke Ngwerume, significant progress has been made in the construction of the new bedding factory, which is expected to open in January or February 2023.

In the year to June 30, 2022, Resttapedic experienced intermittent raw material supply shortages attributed to delays in auction payments, which negatively impacted the import supply chain, resulting in lower volumes in the fourth quarter.

The bedding business, however, saw revenue growth of 33% and marginal volume growth over the prior year. The completion of the 10,000-bed installation in Sunway City should, however, increase the production capacity of the group, which is trying to meet demand.

Another area of ​​focus for the group is the expansion of Legend Lounge – the suite manufacturing business, which is expected to see a wider product range depending on customer needs and tastes.

“Expanding Legend Lounge’s manufacturing capacity remains a key focus with continued investment in new product development as well as redesigning the entire lounge suite line to enhance the guest experience,” said Mr. Ngwerume, adding revenue and volume performance for Legend Lounge, increased by 212% and 231% respectively compared to the comparative period.

The group is also studying the expansion of the retail store network. Already, the company has expanded its store network by opening a new store in Bulawayo during the year until June 30, 2022.

“Plans are underway to improve the retail store network, including the opening of new stores in the coming fiscal year, coupled with outlook upgrades to existing stores to improve the customer experience. .

“Two new stores were opened in Harare during July and August 2022. Volumes are expected to recover in the new fiscal year following the addition of a new appliance and housewares retail business at the end of the year under review,” said Mr. Ngwerume.

Overall, TV Sales & Home recorded revenue growth of 38% year-on-year, while volume performance increased 8% year-on-year.

According to the group, the year-on-year volume growth benefited from a consistent and broad product offering as well as successful market activation promotions deployed during the year.

Fourth quarter volume performance, however, was 8% lower than the comparative period, as June volumes and sales were below expectations due to inconsistent commodity pricing in response to exchange rate volatility which exerted pressure on prices.

Mr Ngwerume said, “The hiatus caused by the authorities’ crackdown on exchange rates has led to a proliferation of informal trade and gray imports.”

Receipts on the accounts receivable book have remained strong even though growth has continued to slow in recent months given the prevailing high interest rates.

Mr. Ngwerume said that management will continuously assess the company’s credit model to provide affordable credit offers to customers, in local and foreign currencies.