By Andy Young
Metcash Limited has today released its results for the financial year ended 30 April 2016, with the group generating sales revenue of $13.5 billion, up 1.3 per cent on the prior year comparative period.
Metcash also reported a profit after tax (including discounted operations) of $216.5 million, which is up on the $384.2m loss the group reported last year.
Group CEO, Ian Morrice, said: “The group has completed the second year of its transformation plan and we have made significant progress. Key supermarket initiatives are delivering results and the liquor and hardware businesses continue to build momentum. The Group is focused on supporting independent retailers to ensure they are well positioned to deliver the ‘Best Store in Town’ for their customers.
“The strong focus on capital and cash management has delivered a significant reduction in debt, which positions the group well to deliver its transformation initiatives as well as invest in growth opportunities.
“This financial strength also underpins the group’s intention to recommence half yearly dividend payments with effect from the FY17 final dividend, subject to capital requirements.”
Metcash’s liquor business increased its total sales by 3.7 per cent to $3.2bn, up from $3.1bn the previous year, which the group said was as a result of the strong performance of the IBA network and the “continued conversion of customers to our banner group”. Sales through the IBA bannered network increased by 13 per cent on the previous year.
The liquor group’s earnings before interest and tax also increased, up by 7.8 per cent to $62.1m from last year’s $57.6m, which the group said reflected the conversion of stores to the IBA bannered network and a strong focus on cost control.
In the financial Metcash said that it had invested in its bannered network, with approximately 85 stores being refreshed and 220 coolrooms being upgraded.
In terms of the outlook the group said that it expects “further consolidation and positive momentum” in its liquor business, however the group added that its food and grocery business “continues to face headwinds from competition, deflation and a rising cost base”.