Metcash shares lift on hardware business consolidation
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More news: Shares in Metcash are up after announcing it will consolidate Total Tools with Independent Hardware Group and that its unaudited results indicate full-year underlying profit after tax will be slightly better than market expectations.
It also announced Total Tools chief executive Richard Murray will leave the company, with Independent Hardware Group CEO Scott Marshall to lead the new Total Tools and Hardware Group.
Metcash shares were up 4.6% to $3.54 at 11:57am AEST.
Metcash exec Richard Murray to depart as it consolidates hardware businesses
The news: Metcash has announced Total Tools chief executive Richard Murray will leave the company as it consolidates the trade tool supplier with its Independent Hardware Group.
The company also said unaudited results indicate its full-year underlying profit after tax for will come in slightly better than market expectations.
The numbers: Metcash said its unaudited results for the financial year ending on 30 April indicate an underlying profit after tax in the range of $273 million and $277 million, which it says is slightly better than the FY25 consensus of $272 million.
Group earnings before interest and tax is expected in the range $504 million and $508 million. It also warned its corporate unit will post a $33 million to $35 million loss.
The context: Under the consolidation, the Independent Hardware Group will be merged with the Total Tools Holdings business to form the Total Tools and Hardware Group under the leadership of incumbent Independent Hardware Group CEO Scott Marshall.
Meanwhile, Total Tools Holdings CEO Richard Murray “will be leaving Metcash to pursue other opportunities” although he will be available to support a “smooth transition”, according to the company’s announcement.
Total Tools was acquired by Metcash in 2020, while Richard Murray started as its CEO in January 2024.
The company expects the merger to improve growth with "strategic alignment, scale benefits, the leveraging of shared customer bases and property opportunities, as well as through simplification”.
What they said: “Merging [Independent Hardware Group] and Total Tools Holdings has been part of our medium to longer term considerations since the acquisition of Total Tools in 2020,” Metcash Group CEO Doug Jones said.
“The creation of an even stronger and more resilient hardware business now is important not only in the context of current market conditions, but also for ensuring the business and our independent members and franchisees are ideally positioned to maximise the benefits from the anticipated market improvement.”
The source: ASX
