Metcash shares fall on FY earnings slide
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More news: Shares in IGA owner Metcash lowered in morning trade on the ASX after the food and beverage company posted a drop in earnings and profit for the full year to April 2024.
Metcash shares were down 2.9% to $3.67 by 10:40am AEST.
E&P Capital retail analyst Phillip Kimber said that the result was 2% above consensus EBIT, and 1% above consensus NPAT. He noted that first seven weeks of Metcash's FY25 earnings showed a continued decline in food sales and accelerating sales declines in hardware, but improving sales growth rates in liquor.
E&P said it did not expect much change to existing FY25 forecasts, however.
What they said: "Management continues to do a good job managing the business in a tough environment. However, we expect investor concerns will remain given the weak sales result in early FY25," Kimber said.
Metcash posts profit slide and lowers dividend
The news: Metcash recorded a slide in profit despite rising revenue for the year ending 30 April, as the food and beverage wholesaler cited a "challenging macro environment" for its business.
The numbers: Group revenue increased 0.7% to $15.9 billion year on year, while operating cashflow was up 29.5% to $482.6 million.
However, group underlying EBIT lowered 0.9% to $496.3 million. Statutory profit after tax decreased 0.7% to $257.2 million and underlying profit after tax dropped 8.2% to $282.3 million.
The board declared a total dividend of 19.5 cents per share, down from 22.5 cents per share in FY23.
The context: Metcash said the revenue rise was driven by growth in its hardware and liquor pillars, which offset a decline in its food segment, driven by lower tobacco sales.
The IGA owner noted that the EBIT decline was due to earnings growth in food and liquor being more than offset by lower earnings in hardware and increased corporate costs.
What they said: Metcash group CEO Doug Jones said: "I am pleased to report that the company has delivered strong results for FY24, a year in which there was a further decline in the external environment".
"In food, strong earnings growth was delivered in the most value-conscious shopping environment in recent memory, providing further evidence of its shift to a sustainable and resilient business model," he said.
The source: ASX announcement
