Metcash has released its results for the first-half of FY23 and shown strong growth in sales and earnings, with exceptional three-year growth rates, while liquor was ‘a standout for the half’.
Overall group revenue was up 8.2 per cent to $7.7bn, with group underlying EBIT up 10.3 per cent to $255.1m and underlying profit after tax up 9.1 per cent to $159.9m.
Group CEO, Doug Jones said: “It has been another pleasing half for Metcash with strong sales and earnings growth in the face of higher inflation and while cycling the impact of extensive lockdowns in 1H22.
“Importantly, the business continued to build on its record performances post the onset of COVID, achieving exceptional growth over the past three years in all pillars.
“The increased preference for local neighbourhood shopping continues to be seen in our strong sales performance, with shoppers recognising and enjoying the increased competitiveness, differentiated offer and relevance of our network of independent stores. Feedback from our retailers is that many shoppers have now changed their shopping habits to include local grocery, liquor and hardware stores.
“There was some improvement to the extensive supply chain challenges experienced in FY22, and our operations again exhibited resilience and flexibility which, together with our strategic investment in inventory, ensured our networks remained well stocked. All pillars continued to perform well, underpinned by robust demand and sales volumes. In the Liquor pillar, growth accelerated, which was a standout for the half.
“Our independent retail networks performed well. Overall network health continued to strengthen, and retailers are operating with a high level of confidence and reinvesting to further improve the quality of their stores and offer.”
In the liquor business, total sales (including direct sales from suppliers to retailer, invoiced through Metcash) increased $252.4m or 11.6 per cent to $2.4bn, which is up 36 per cent on a three-year basis. Metcash said this reflects a recovery in sales to on-premise customers and a continuation of strong demand in the retail network.
The increased preference for neighbourhood shopping and at-home consumption saw wholesale sales grow across both the retail network and contract customers.
Wholesale sales to the IBA banner group increased 1.2 per cent, while sales to IBA on-premise customers increased 47.8 per cent, due to the cycling of lockdowns, growth in underlying demand and new customers.
The group said that RTD and spirits were its strongest growth categories and that wine continued to perform well, while sales of owned and exclusive brands increased 14.7 per cent. Liquor EBIT increased $5m, or 11.3 per cent to $49.3m.
Looking ahead Metcash said all pillars have continued to trade well in the first four weeks of the second half, with total liquor sales up 8.9 per cent with the prior corresponding period.
Jones said: “Looking forward, the business remains well placed with good growth opportunities, a strong financial position and strategic initiatives that are delivering significant benefits.
“We are also accelerating targeted growth and value creation initiatives in areas such as loyalty, digital and eCommerce, data, network optimisation and development, as well as addressing legacy technology risks through Project Horizon.”