Metcash Reports Mixed Half-Year Results Amid Challenging Trading Conditions

Australian wholesale distribution and marketing company Metcash Limited has released its financial results for the half-year ended October 31, 2024, showing resilience in its diversified portfolio despite challenging market conditions.

Financial Performance

Group revenue increased 6.3% to $9.6 billion, while underlying EBIT remained relatively stable with a slight decrease of 0.2% to $246.1 million. The company reported a statutory profit after tax of $141.8 million, up 0.6%, while underlying profit after tax declined 5.5% to $134.6 million.

The Food pillar demonstrated substantial growth, with total sales excluding tobacco increasing 18.8% to $4.2 billion. This growth was primarily driven by the acquisition of Superior Foods in June 2024 and strong performance in both Supermarkets and Campbells & Convenience segments. Food EBIT increased 17.9% to $119.9 million.

The Liquor division reported a 2.1% increase in total sales to $2.5 billion, with growth in independent retail and contract customers offsetting a slight decline in on-premise sales. However, EBIT decreased 3.3% to $49.1 million, affected by reduced strategic buying and increased costs.

The Board declared an interim dividend of 8.5 cents per share, fully franked, maintaining its target payout ratio of approximately 70% of underlying profit after tax. Net debt stood at $725.0 million, up from $251.9 million at the end of FY24, primarily due to the Superior Foods acquisition.

Metcash Stock Price

Trading Update & Outlook

For the first four weeks of 2H25, total Group sales increased 8.0%, with Food sales (excluding tobacco) up 22.6%, Liquor sales rising 4.4%, and Hardware showing mixed results across different segments.

CEO Doug Jones commented that while market conditions remain challenging, particularly in Hardware, the company's diversified portfolio strategy continues to deliver. The Food and Liquor pillars are well-positioned for structural growth, while Hardware remains poised to capitalize on any market improvement. The company expects to operate in the mid to upper end of its target debt leverage ratio range in FY25 and FY26.