Metcash has reported its financial results for FY2021, with a strong performance for the whole group and increased sales in its liquor business, despite the reduced on-premise activity over the year.
Speaking about the performance of its liquor business, Metcash CEO Jeff Adams said sales had increased significantly through the IBA banner group.
“Liquor sales including charge-through increased significantly up 19.2 per cent in the year to $4.4bn, partly impacted by a reduction in the on-premise sales due to COVID restrictions, particularly in the first-half of ’21,” Adams said.
“Wholesale sales to the IBA banner group increased over 22 per cent (22.6) with strong growth across all of the banners. Similar to food, the strong demand was driven by the shift in consumer behaviour, along with other market factors like reduced international travel and duty free sales, which we have called out before.
“Retail like-for-like sales in the IBA banner group were very strong, up almost 20 per cent (19.7), and this continued in the second-half of ’21 despite a recovery in the on-premise sales.
“The EBIT in Liquor has increased significantly, up $15.9m, or up almost 22 per cent (21.8) to $88.7m, with the EBIT margin in-line with last year at two per cent, despite an increase in the sales mix of some lower margin categories.”
Speaking about the overall group’s performance for the year, Adams said: “It has been a stand-out year for the group with record sales of over $16bn ($16.4bn) for the first time, significant earnings growth and a record operating cash flow. Group revenue was up about 10 per cent (9.9), and group EBIT up almost 20 per cent (19.9).
“Underlying profit after tax was up 27 per cent with underlying earnings per share up over 13 per cent (13.3).
“All pillars achieved strong sales growth in FY21, driven by the shift in consumer behaviour that started back in March of 2020, along with the success of our MFuture Initiatives, and this has produced a record operating cashflow of over $475m ($475.5m).
“We have seen a strong start to FY22, particularly when you compare to the more normalised sales numbers of FY20.”
The results also highlighted how the liquor business has performed in the first eight weeks of FY22, with sales increasing 26 per cent compared with the same period in FY20, and 17.3 per cent compared with the same period in FY21.
Metcash said the significant uplift reflects continued strong demand across retail stores and an improvement in sales to ‘on-premise’ customers.
Sales to the IBA retail banner group in the first eight weeks of FY22 increased 23.1 per cent compared with the same period in FY20, and 2.8 per cent compared with the same period in FY21.
Metcash also said the Liquor pillar is focused on progressing its MFuture growth initiatives in private and exclusive label, digital transformation, supply chain flexibility and efficiency, and driving brand awareness and appeal.