eBusiness Weekly
Business Writer
Axia Corporation Limited’s furniture business, TV Sales & Home, is expecting to maintain a growth trajectory during the financial year 2023 and beyond on the back of investment into manufacturing capacity, which will result in broad product offering.
In July last year, TV Sales & Home increased its shareholding in Restapedic to 60 percent from 49 percent for an amount of US$860 000.
The increase in shareholding has enabled Restapedic to invest in a 10 000-bed production facility 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 facility, which is set to open in January or February 2023.
During the year to June 30, 2022, Restapedic experienced intermittent raw material supply gaps attributed to delays in the auction payments, which negatively impacted the imports supply chain resulting in a downturn in volumes during the fourth quarter.
The bedding business, however, attained revenue growth of 33 percent and marginal growth on volumes compared to prior year. The completion of the 10 000 bed facility in Sunway City is, however, expected to increase production capacity for the group, as it works towards meeting demand.
Another focus area for the group is the expansion of Legend Lounge – the suite manufacturing business, which should see a wider product range in line with customer needs and tastes.
“The expansion of Legend Lounge’s manufacturing capacity remains a key focus with sustained investment in new product development as well as re-engineering of the entire lounge suites range to enhance customer experience,” said Ngwerume adding revenue and volume performance for, Legend Lounge, increased by 212 percent and 231 percent to the comparative period respectively.
The group is also looking at expansion of the retail stores network. Already, the business increased its store network by opening a new store in Bulawayo during the year to June 30, 2022.
“Plans are underway to enhance the retail store network which include opening new stores in the coming financial year coupled with upgrades to outlooks of existing stores to improve customer experience.
“Two new stores were opened in Harare in the months of July and August 2022. Volumes are expected to recover in the new financial year following the addition of a new home appliances and homeware distribution business at the end of the year under review,” said Ngwerume.
Overall, TV Sales & Home recorded revenue growth of 38 percent to prior year whilst volume performance increased by 8 percent over prior year.
According to the group, year on year volume growth benefited from a consistent and broad product offering as well as successful market activation promotions rolled out during the financial year.
Fourth quarter volume performance, however, was 8 percent below the comparative period as the June volumes and sales were below expectations due to the inconsistent pricing of goods in response to the unstable exchange rate which exerted pressure on pricing.
Said Ngwerume: “The hiatus caused by authorities’ clampdown on currency rates has resulted in a proliferation of informal trading and grey imports.”
Collections on the debtors’ book have remained solid although growth has, however, continued to slow down in the last few months given the prevailing high interest rates.
Ngwerume said management will continuously assess the business’ credit model to deliver affordable credit offerings to customers, in both local and foreign currencies.
