AUS: Metcash shares rebound on "modest" H1 gains

By Katy Askew | 2 December 2013

Metcash shares rise

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. 

Sectors: Financials, Retail

Companies: Metcash

View next/previous articles

Currently reading -

AUS: Metcash shares rebound on "modest" H1 gains

There are currently no comments on this article

Be the first to comment on this article

Related research

Food Retail in Australia

Food Retail in Australia industry profile provides top-line qualitative and quantitative summary information including: market size (value 2007-11, and forecast to 2016). The profile also contains descriptions of the leading players including key fin...

Agricultural Products in Australia

Agricultural Products in Australia industry profile provides top-line qualitative and quantitative summary information including: market size (value and volume 2009-13, and forecast to 2018). The profile also contains descriptions of the leading play...

Grocery Retailers in Australia

Grocery retailers grew by 3% in current value terms over 2012, to generate revenues of A$111.6 billion. Growth in 2012 was similar to the review period performance which saw a CAGR of 5% in current value terms. In an environment of continued low cons...

Related articles

AUS: Retailer Metcash outlines "transformation" plan

Australian wholesale grocer Metcash has announced it will spend up to A$480m (US$437m) to overhaul its business to prepare it for "long-term sustainable growth".

Welcome to the home of food information, insight & intelligence

Not a member? Join here

Decrease font sizeDecrease font sizeDecrease font size Increase font sizeIncrease font sizeIncrease font size Comment on this article Email this to a friend Print this page