AUSTRALIA: Metcash H1 boosted by acquisitions
Australian grocery wholesaler Metcash has reported that its profits more than doubled in the first quarter, boosted by last year's A$1.1bn (US$862m) acquisition of Australia's third-largest supermarket business, Foodland.
Metcash said profits for the six months to 31 October rose to A$66.1m, up from A$30.5m reported for the first half of last year. Group revenue climbed 37% from A$3.48bn to A$4.76bn.
The result was boosted by the acquisition of Foodland's Australian business last November. Chief executive Andrew Reitzer said the integration of the Foodland business was on track, with 40% of the targeted A$80-90m earnings achieved in the first half.
Like-for-like sales from its IGA business rose 5.3% during the half.
"In our core distribution division, IGA Distribution, retailer confidence is high as evidenced by new store growth, store reinvestment and sales growth of 10%," Reitzer observed.
Metcash's liquor wholesaling business ALM, which accounts for around 10% of group profit, saw a 4.2% rise in sales. However, EBIT dropped 11% as the unit increased its marketing spend to stem a trend towards declining sales.
Campbell's Cash & Carry, which supplies 7-Eleven conveniences stores, increased earnings 60% to A$14.5m. "The company's specialised convenience distribution division, Campbells Wholesale, had an excellent half, benefiting from the addition of the Western Australian FAL operations, increased share of the modern petrol and convenience market and a more profitable sales mix," Reitzer commented.
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