Metcash has released its financial results for the year ended 30 April 2019.
Reported group revenue, which now excludes charge-through sales, increased 1.8 per cent to $12.7 billion (FY18: $12.4 billion). Including charge-through sales, group revenue increased 1.4 per cent to $14.6 billion (FY18: $14.4 billion).
“Further good progress on key initiatives in the second half helped deliver a pleasing financial and strategic outcome for the year,” CEO Jeff Adams said.
“Solid earnings and cashflows were again delivered by our pillars despite challenging market conditions, and we continue to be well positioned with a strong balance sheet.
“Pleasingly, our supermarkets business delivered its fourth consecutive half-year period of improvement in the non-tobacco sales trajectory, and it has a number of significant MFuture initiatives underway that we believe will drive further improvement.
“As announced earlier this month, we have entered into a new long-term supply agreement with Drakes Supermarkets in Queensland.
“Our liquor and hardware pillars continued to perform well, both delivering higher earnings…
“Our Working Smarter program has now concluded, delivering total annualised gross savings of ~$125 million over the past three years, well ahead of the initial ~$100 million target.
“MFuture, the next phase of our strategy, is now underway and includes continuing our strong focus on costs and investing to drive revenue growth.
“I am encouraged by the level of retailer confidence in the future and their on-going investment in stores to improve the quality of our independent networks. I am confident in our plans to further champion their growth and continued success of our independent networks.”
Food
Total food sales (including charge-through sales), according to the results, increased 0.3 per cent to $8.79 billion (FY18: $8.77 billion).
Supermarkets sales (including charge-through sales), on the other hand, were down 0.5 per cent to $7.24 billion (FY18: $7.28 billion). Metcash says that continued growth on the eastern seaboard is again being offset by a decline in sales in Western Australia.
Convenience sales increased 4.4 per cent to $1.6 billion (FY18: $1.5 billion). Metcash says this reflects sales growth from major customers, increased tobacco sales and the addition of new customers.
Liquor
Total liquor sales (including charge-through sales) increased 5.6 per cent to $3.67 billion (FY18: $3.47 billion), which Metcash says reflects continued growth in sales to the IBA bannered group and ALM wholesale customers.
A high proportion of this growth, says Metcash, was value driven related to continuation of the premiumisation trend to higher quality but less consumption.
Read the full report here.