AUS: Metcash shares rebound on "modest" H1 gains
Metcash shares rise
Australian retailer Metcash saw its share price jump almost 8% today (2 December) after the group booked a "modest" improvement in first-half top line growth.
In a regulatory announcement, Metcash said reported revenue rose 4.9% to A$6.64bn (US$6.06bn). Reported profit after tax, which strips out the impact of discontinued operations and other one-off items, rose 20.6% to A$98.9m in the six month period.
The company, which supplies Australia's independent retailers, has come under sustained pressure from price deflation. Metcash has been working on a programme to reduce costs through store rationalisation.
EBITA fell 6.3% to A$193.3m due to price deflation, higher advertising spending and the "intense competition". Underlying profit fell 1.9% to A$119m, the company added.
Metcash has launched a strategic review, due for completion in February.
"The major supermarket chains have persisted to distort the market with cross subsidisation through their domination in grocery and fuel. The use of market distortive devices such as fuel shopper dockets, particularly at excessively high predatory levels, makes it very difficult for independent retailers to compete on a level playing field," CEO Ian Morrice said.
The Australian Consumer and Competition Commission is conducting two investigations into the Australian retail scene. One looks at the relationship of Australia's supermarkets to suppliers and the other examines alleged misuse of shopper dockets.
Metcash shares rose 7.54% on the ASX today, climbing to A$3.28. Metcash shares have fallen considerably this year, from a high of A$4.25 in March, as Australia's third-largest retailer has felt the negative impact of the supermarket wars and structural price deflation.
Click here to view the full release from Metcash.
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