Metcash delivers record year with strong growth

Metcash has reported total group revenue growth of 6.2 per cent to $15.8bn for the year ending 30 April 2023, with a strong performance across all of its retail pillars.

Group earnings increased 8.1 per cent to a record $500.8m, with underlying profit after tax up 4.6 per cent to $307.5m.

The Food pillar continued to perform well delivering earnings growth of 3.8 per cent to $204m, reflecting the strong trading performance and improved leverage, supported by an improved retail network that is more relevant and competitive than ever before.

Total Food sales (including charge-through) increased 2.8 per cent to $9.6bn. Supermarkets sales increased 2.1 per cent and Convenience increased 9.7 per cent, driven by the addition of new customers, strong food service demand and the normalisation of customer activity post Covid restrictions.

Tobacco sales declined 6.8 per cent reflecting the acceleration of illicit trade and continuation of the decline in smoking.

On an ex-tobacco basis, total Food sales increased 7.0 per cent with Supermarkets wholesale sales +6.4 per cent and Convenience +12.8 per cent.

A record number of 39 new IGA stores were opened in the year.

Group CEO, Doug Jones, said that it has been another record year for Metcash, and one that represents continued progress on the outstanding results in the prior two years.

“Both sales and earnings were at record levels while facing additional challenges associated with the rapid increase in interest rates and cost of living, particularly towards the end of the year.

“Three-year growth rates have been outstanding, with earnings per share up ~46%. This helped us return ~$800m to shareholders, which included an 80 per cent increase in dividends over the period.

“Our retail networks in Food, Hardware and Liquor all continued to perform well, and importantly, they are healthy, confident, and continuing to reinvest.

“There are signs that the rapid increase in interest rates and cost of living are starting to impact consumer confidence and the behaviour of some shoppers. We continue to focus on ensuring our retailers remain competitive, with options that provide the right value for shoppers.

“Going forward, the fundamentals for our businesses remain sound, and we are well positioned to continue delivering growth and superior returns for shareholders through the cycle.”

The Metcash Group is well positioned to continue its momentum into FY24, with solid sales growth already continuing into the next financial period. In the first seven weeks of FY24, group sales have increased 2.3 per cent.

Jones concluded: “Metcash is now much larger, more diversified, and stronger than it was three years ago, and our management teams and retail networks are experienced at managing well through challenges, including changes in the external environment.

“Importantly, we have healthy, supportive, and growing retail networks. Our financial position is strong, and we have an experienced management team to continue progressing our growth plans.”

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