Grocery wholesaler, Metcash, says its turnaround plans are on track, despite another profit slide during the first half.
The owner of the IGA supermarket brand suffered a nine per cent slide in its first half profit to $101.7 million for the six months to October 31.
However, net profit was 2.8 per cent higher, also at $101.7 million.
Metcash CEO, Ian Morrice, said the company expected full year earnings of between $315 and $330 million, which is up to 22 per cent less than recorded in 2013/14.
Meanwhile, the company cut its interim dividend by three cents to 6.5 cents, fully franked.
The result follows a 17.9 per cent slide to $169.2 million in Metcash’s full year profit for 2013/14.
But sales were up one per cent to $6.6 billion during the first half and Morrice said Metcash’s five year turnaround strategy had recorded some early successes.
He said the company’s Diamond Store accelerator program had helped lift customer numbers and basket sizes while sales of the company’s private label products had grown strongly.
Meanwhile, the company was working to keep costs down and make its supply chain more efficient.
“These are positive signs in the early stages of the five-year transformation of Metcash,” he said.
But, Morrice said, tough competition and sliding grocery prices meant conditions remained challenging for the company.
“The general trading environment continues to be highly competitive with price deflation expected to continue and consumers remaining value conscious.”
AAP
