Innscor’s Axia makes $2.3 million profit in three months

Axia Corporation has reported a net profit of $2.3 million for the three months to June 30, its first set of financial results since unbundling from Innscor Africa.

Axia, which adopted June 30 as its financial year end, said on a pro forma basis, profit increased to $14.5 million in the full year from $10.6 million in same period in 2015 when the company was still under Innscor.

It listed separately on the Zimbabwe Stock Exchange on May 17.

The group’s operations include TV Sales and Home, Transerv and Distribution Group Africa Zimbabwe. Chief executive, John Koumides told analysts that the group’s performance was being driven by higher sales at Transerv.

Revenue in the three months was $49.557 million and profit before tax at $3.1 million. On a yearly basis, revenue at $197.505 million was 28 percent up from $154. 854 million in the same period last year.

Koumides said the group has managed to strengthen its businesses despite the tough operating environment and is looking at consolidating the current status core.

Transerv, Loumides said, has potential to generate revenue at minimal costs, resulting in huge profits. It currently has 43 branches, and has a core capital of between $35 and $40 million while generating at least $4 to $5 million profit per month. The group has a 26 percent shareholding in the unit.

TV Sales and Home has 38 outlets around the country and its turnover is around 25 to 30 percent of group revenue. DGA has a balance sheet at close to $100 million in Zimbabwe and $25 million in its regional operations.

Koumides said the company, despite performing well in the region, is being affected by the volatility and depreciation of regional currencies against the United States dollar.

Finance director Ray Rambanapasi said in the three months’ period, Transerv had a difficult period with revenue dropping 15 percent on the comparative period, largely as a result of prevailing cash shortages.

DGA Zimbabwe achieved a turnover growth of 28 percent but depressed margins, together with increased provision for doubtful debts resulted in a decline of three percent in profit before tax.

DGA Africa operations saw turnover and operating profit declining 29 percent and 50 percent respectively.

TV Sales and Home recorded a 13 percent increase in revenue driven mainly by a 24 percent rise in cash sales as demand for extended credit continued to wane.-The Source

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