Axia Corporation’s results offer a useful snapshot of consumer spending trends and operating conditions across Zimbabwe and the region. The Victoria Falls Stock Exchange-listed group, which operates across retail, manufacturing and distribution, plays a significant role in supplying household goods, automotive parts and fast-moving consumer products. Its performance for the six months ended December 31, 2025 therefore provides insight not only into the company’s own growth trajectory but also into the broader dynamics shaping formal sector businesses.
For the half year, Axia reported revenue of US$122 million, representing a 22% increase from US$99,7 million recorded in the comparable period last year. The top-line growth was primarily volume-driven across most operating segments, reflecting strong festive season demand, successful promotional campaigns, and the addition of new agency relationships in the distribution business.
However, while revenue growth was robust, margin performance tells a more nuanced story. The group’s EBITDA margin declined to 13% from 15% in the prior half year, while net profit margin narrowed further to 4% from 5%. The margin compression largely reflects deliberate competitive pricing strategies adopted by management to defend market share against informal traders and cheaper imported goods.
Operating profitability therefore grew more modestly than revenue. EBITDA increased only 4% to US$15,3 million despite the strong sales performance, while operating expenses rose 15% to US$22,3 million. A significant contributor was a US$1,9 million credit loss provision within the distribution division, and there was a tax assessment that elevated the effective tax rate during the period.
Despite these pressures, profit before tax increased 28% to US$8,8 million while headline earnings per share rose marginally to 0,61 US cents. The relatively modest improvement in earnings per share underscores the reality that Axia’s current growth phase is being driven primarily by scale expansion rather than margin expansion.
A closer look at segment performance highlights the underlying drivers of the revenue growth. TV Sales & Home remained the largest contributor to group revenue, accounting for approximately 42% of the top line. The division recorded a 29% increase in revenue supported by a 37% surge in sales volumes.
The strong performance was driven by aggressive promotional campaigns, particularly the Black Friday and Christmas “Ho-Ho Home” promotions, which lifted customer traffic significantly. Credit sales also played a major role, with the division’s credit book expanding by approximately 70% year-on-year, enabling more households to access higher-value consumer goods such as furniture and appliances.
Within the manufacturing segment, Restapedic Bedding delivered a similarly strong performance, with
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revenue and volumes rising 29% and 26% respectively. The improvement partly reflects increased production capacity following the relocation of manufacturing operations to the Sunway City facility, which lifted monthly capacity from 4 300 beds to around 5 500 units.
Restapedic Lounge, which manufactures premium lounge suites, experienced a more subdued period. Revenue grew only 5% while volumes declined 10%, largely due to price sensitivity in the premium market as well as operational disruptions upon backward integration of bedding and lounge segments. Capacity utilisation averaged roughly 550 suites per month during the half year.
Transerv, the group’s automotive parts and accessories division, also recorded steady growth. Revenue increased 8% on the back of a 16% rise in sales volumes, supported by the opening of four additional retail outlets during the period, bringing the network to 56 stores nationwide. Management has indicated that seven further outlets are expected to open in the second half of the financial year.
Regional operations presented a more mixed picture. In Zambia, revenue increased 28% in US dollar terms while volumes grew 16%, with the stronger Zambian Kwacha amplifying reported revenue growth. In Malawi, however, revenue declined 12% despite a 24% increase in volumes, as the depreciation of the Malawian Kwacha reduced the US dollar value of sales generated in local currency.
While income statement margins softened during the period, Axia’s cash flow profile improved significantly. Net cash generated from operating activities surged to US$11,7 million, up from US$3,5 million in the prior half year. Strong festive season sales and improved working capital management contributed to the sharp increase in operating cash flow.
The stronger cash generation is also reflected in the balance sheet. Total assets increased to US$132 million from US$128 million while shareholders’ equity rose to US$71 million from US$67 million. At the same time, interest-bearing borrowings declined from approximately US$16 million to US$10,6 million, highlighting management’s efforts to reduce leverage in ZiG-denominated loans and strengthen the financial position of the group.
From a market perspective, investor sentiment towards Axia has improved over the past year. The company’s share price on the VFEX has rallied from roughly US$8 cents in early 2025 to around US13,5 cents in March 2026, reflecting growing confidence in the group’s ability to deliver steady earnings growth despite a challenging operating environment.
Looking ahead, management remains optimistic about the second half of the financial year, supported by continued retail expansion, improved manufacturing capacity, and the restructuring of the distribution business. While margin pressures and competitive dynamics remain key risks, Axia’s diversified operating structure and strong cash generation position the group to sustain its volume-driven growth strategy across the region.
Taimo is an investment analyst with a talent for writing about equities and addressing topical issues in local capital markets. He holds a First Class Degree in Finance and Banking from the University of Zimbabwe. He is an active member of the Investment Professionals of Zimbabwe community, pursuing the Chartered Financial Analyst charter designation.
