Metcash Limited has released its financial results for the first half of its 2018 financial year, with group sales revenue up 7.6 per cent on the prior corresponding period to $7.06bn.
The group’s underlying profit after tax increased 19.6 per cent to $99.0m, which includes earnings growth across all of the group’s pillars. Reported profit after tax increased 24 per cent to $92.9m.
Group CEO, Ian Morrice said: “The first half results were very pleasing despite the continuation of some of the most challenging market conditions in our history. It was good to see earnings growth across all our Pillars, as well as strong operating cashflows.
“Both Liquor and Hardware continued to perform well, and our Hardware team is continuing to do a great job on the integration of Home Timber and Hardware (HTH). Synergy benefits from the acquisition are being delivered in line with our expectations, and there has been a turnaround in HTH’s performance in a relatively short period of time.
“We are now half way through our three year Working Smarter program, and the initiative is delivering significant benefits, particularly in our Supermarkets business. The savings achieved have been a key factor in Supermarkets maintaining its earnings, despite the significant headwinds that include a continuing high level of deflation.
“As announced at the time of our FY17 results in June, I am stepping down as Group CEO and will shortly be handing over to Jeff Adams. It has been an honour to lead Metcash since 2013, and I wish the company every success in the future.”
Adams said: “I am pleased with the first half performance and the excellent work done to further strengthen Metcash’s financial position.
“The company has a good portfolio of businesses, a very strong and capable management team, and the strength of its financial position provides significant strategic flexibility for the future.
“The on-going success of our independent retailers will be a key focus for me. They play a vital role in local communities, and in the health of our economy.
“I am excited by the opportunity to build on the good work overseen by Ian in transforming Metcash, and in supporting our Independent Retailers.”
Metcash’s liquor sales increased by 5.1 per cent to $1.64bn, which the group says reflects “continued growth in the IBA bannered network”.
Wholesale sales through the IBA bannered network increased 8.7 per cent, driven by a number of contract customers converting to the IBA network. The group also reported that retail sales through the IBA network increased 1.6 per cent on a like-for-like basis.
Liquor EBIT increased $0.5m to $27.6m, which reflects “stronger sales to both the IBA bannered network and contract customers, partly offset by an increase in the bad debts provision in Western Australia and costs associated with the implementation of the NSW Container Deposit Scheme”.