Supermarket wholesale supplier Metcash is back in the black with a $216.5 million annual net profit.
The company, which supplies IGA, Foodland and Foodworks stores, bounced back from a $384.2 million loss 12 months ago, selling its automotive business for $285.4 million and lifting group sales revenue by 1.3 per cent to $13.54 billion. The company’s EBIT declined 7.4 per cent to $275.4 million.
Ian Morrice, group CEO, said the group has completed the second year of its Transformation Plan and that they have made significant progress.
“Key supermarkets initiatives are delivering returns and the liquor and hardware businesses continue to build momentum,” Morrice said.
He added the group is focused on supporting independent retailers to ensure they are well positioned to deliver the ‘Best Store in Town’ for their customers.
Total food and grocery sales increased by 0.5 per cent to $9.3 billion. Supermarket sales were up 0.5 per cent, however adjusting for the estimated impact of disruption from damage to the NSW distribution centre, underlying sales would have been up 0.9 per cent.
IGA stores like for like retail sales increased 1.4 per cent, which represents the fourth period of sales growth.
“This demonstrates the improving underlying health of our retail network and the positive impact of the group’s Transformative Initiatives,” Morrice said.
The group’s convenience sales increased by 0.4 per cent to $1.6 billion. Although the growth in C-Store Distribution revenues was largely offset by a decline in Campbells reseller revenues.
Liquor sales increased by 3.7 per cent to $3.2 billion and EBIT up by 7.8 per cent to $62.1 million.
Hardware sales were up 0.8 per cent to $1.06 billion.
Metcash said competition, deflation and a rising cost base will make for challenging conditions for its food and grocery business over fiscal 2017, but that it expects to resume half-yearly dividends from this time next year.
Access exclusive analysis, locked news and reports with Inside Retail Weekly. Subscribe today and get our premium print publication delivered to your door every week.
