Axia Corporation Limited’s automotive spares and accessories retail unit, Transerv was hit by foreign currency shortages during the course of the group’s just ended financial year leading to lack of adequate stock.
In its full year financial results, the group said it was “disappointed” by the subsidiary’s performance for the year which was below expectation.
“The business experienced severe challenges in pricing and obtaining foreign currency to always ensure adequate stocking levels,” said the group.
The country has experienced serious foreign currency shortages which prompted the Central Bank to introduce the foreign currency auction system to assist companies’ access currency to import raw materials for production.
However, the system has not been adequately funded with foreign currency from importers due to massive discounted rates which are far below viable parallel market rates.
After the group invested in more retail outlets and fitment centers, Transerv volumes grew by 7 percent, which was less than anticipated due to inability to import stock.
“The business increased its store network throughout the country with the aim of bringing convenience to the market and providing an excellent customer service.”
New retail branches were opened in Chiredzi, Victoria Falls and Zvishavane as well as new fitment centres in Groombridge, Avondale (formerly Autocycle) and Chikwanha in Chitungwiza.
The group added that plans were underway to open at least six new stores during the coming financial year as part of the drive to increase footprint throughout the country.
The main operating business units in the Axia Corporation Limited Group are TV Sales & Home (TVSH), Distribution Group Africa (DGA) and Transerv.
Meanwhile, the Group reported revenue of ZWL$75.534 billion during the year to achieve a 32 percent growth compared to the comparative year. The revenue growth filtered into gross margin which increased by 92 percent.
Operating expenditure increased by 57 percent on comparative period due to indexing of cost base to the US$.
The Group posted an operating profit of ZWL$14.448 billion, representing a 149 percent increase on the comparative period. Profit before tax of ZWL$7.423 billion was reported which was 146 percent ahead of prior year. Basic Earnings Per Share and Headline Earnings Per Share both improved by 123 percent and 124 percent respectively.