Metcash has posted a mixed set of results for the fiscal first half, with management citing a challenging trading environment during the period.
Group revenue for the six months ended October 31 edged up 0.1 per cent to $8.5 billion. Including charge-through sales, revenue rose 0.4 per cent to $9.6 billion.
Sales of the food segment, excluding tobacco, increased 7.2 per cent, reflecting growth in both supermarket business (IGA) and foodservice and convenience business (Campbells & Convenience and Superior Foods).
Including tobacco, food sales were down 0.8 per cent. The rate of decline in tobacco sales accelerated to 35 per cent following the introduction of new regulations in July, the company noted.
At liquor, sales increased 1.4 per cent, reflecting market share gains in Australian packaged liquor and an acceleration in wholesale sales to on-premise customers.
The hardware business saw sales growth of 2.4 per cent, while Total Tools sales increased 3 per cent.
On the bottom line, group EBITDA rose 2 per cent to $367.2 million. Meanwhile, underlying profit after tax decreased 5.9 per cent to $126.7 million, attributed to lower hardware and liquor earnings, increased finance costs and increased depreciation and amortisation.
Metcash group CEO Doug Jones said the results were solid given tough trading conditions during the period.
“We have made good progress in our strategy of extending through the value chain and ‘winning with independents’. This provides opportunities to expand our addressable markets, at attractive margins,” Jones said.
“Metcash remains well set for ongoing success with a stronger, more diversified and more resilient business, and with significant opportunities for accelerating growth,” he added.
