Metcash has reported its full year results this morning with its liquor division seeing an 8.7 per cent increase in sales and 9.8 per cent increase in EBIT as part of a strong result for the group as a whole.
Liquor sales increased to $4.8bn with the group saying this was driven by a continuation of strong demand in the retail network and a recovery in on-premise sales.
Sales growth in the retail network was in both the IBA banner group and contract customers, supported by continuation of the shift in preference for local neighbourhood shopping and less overseas travel and duty free shopping.
Wholesale sales to the IBA banner group increased 4.4 per cent (+28.1 per cent two-year basis) with all brands performing well, particularly the Bottle-O, Cellarbrations and IGA Liquor. RTDs, spirits and wine continued to be the strongest growth categories. Retail LfL sales11 in the IBA banner group increased 2.5 per cent (+24.0 per cent 2yr basis).
Group CEO, Doug Jones said: “I am pleased to be presenting Metcash’s FY22 results, my first as Group CEO. The results are outstanding, another record year, and represent continued progress on the exceptional performance in FY21.
“At the outset I would like to thank Jeff Adamsfor hisstewardship of the Company and his assistance in my transition into the Group CEO role earlier this year.
“Record sales growth led to a significant increase in underlying earnings and returns to shareholders.
“Our retail networks in Food, Hardware and Liquor all continued to perform well, further strengthening the health of our independent retail networks. On a two-year basis, like-for-like (LfL) sales increased ~15 per cent in the IGA retail network, ~28 per cent across Hardware’s IHG and Total Tools retail networks and ~24 per cent in the IBA Liquor network.
Importantly, retailers are increasingly reinvesting in their stores, further improving the quality of their network primarily through the various store upgrade programs we support.
“We also further strengthened relationships with our independent retailers and were pleased to recently announce long term agreements to continue supplying Foodworks stores and Drakes Supermarkets in Queensland.
“The Group’s significant lift in earnings and strong financial position led to a ~23% increase in total dividends for FY22, representing a 72 per cent increase on a two-year basis.
“Importantly, sales momentum has continued into FY23 with Group sales up ~nine per cent in the first seven weeks of the year and growth in all pillars, partly buoyed by the impact of inflation.
“While remaining focused on managing the supply change challenges, we are also helping shoppers manage the impact of inflation by providing better value options through a wider range of products at competitive prices.
“Going forward, our robust business model is supporting our pillars to manage well through the ongoing challenges, and we remain well positioned with a strong balance sheet and financial flexibility to continue progressing our MFuture plans,” Jones said.
Group underlying EBIT increased 17.7 per cent to $472.3m, while Group underlying profit after tax increased 18.6 per cent to $299.6m, and statutory profit after tax increased 2.7 per cent to $245.4m.