AUSTRALIA: Metcash Swings Back To Profit

Metcash has reported a net profit for its last fiscal year, even as it logged in better-than-expected results.

For the year ending April 2016, the group reported a net profit of A$216.5m, compared to last year’s loss of A$384.2m (underlying net profit was up 2.7%).  Sales were up 1.3% to A$13.5bn, with total food & grocery sales up 0.5% to A$9.3bn on IGA like-for-like sales of 1.4%.

However, the group admitted that price discounting had hurt margins, with food & grocery operating profit margin down 17% to A$179.9m, although they improved in the second half.  Volumes were up for the year, but this was hurt by price deflation of 2.2% (up from 1.7% last year).

CEO Ian Morrice noted: “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”.  He also noted that net debt was down to A$275.5m, from A$392.3m, and added that the group plans to resume offering half yearly dividends from the 2017 year.