Metcash Liquor delivers buoyant half year results

Metcash has announced its half-year results ended 31 October 2023, and its Liquor division has performed well.

Wholesaler Metcash’s revenue grew in the first half of FY24 amid higher sales across its food, liquor, and hardware businesses.

The business reported first-half group revenue increased 1.6 per cent to $9 billion, in line with estimates. Underlying group earnings before interest and tax fell by 3.4 per cent to $246.5 million in the half year to October 31, while statutory net profit rose 12.2 per cent to $141 million. Underlying net profit fell 10.9 per cent to $142.5 million.

Metcash is the largest supplier of liquor to independently owned liquor retailers such as Cellarbrations, The Bottle-O and IGA Liquor.

The Liquor pillar’s sales gained 2.4 per cent to 2. 5 billion in the first half, and earnings 3 per cent to $50.8 million, supported by continued strong demand from retail customers and improved leverage. Retail sales were up 2. 8 per cent, and on-premise sales were down 2.6%.

Group CEO Metcash, Doug Jones said the liquor division delivered “another great result from a very steady business.”

“As you would expect, we're seeing trends towards value across and within categories, with strong growth, particularly in beer and RTDs.  We note that the preference for convenience and the service of local bottle shops persists, with more at home consumption,” Jones continued.

“And it's very pleasing to note strong growth in our own and exclusive ranges,” he added.

“Strong sales growth and good cost management allowed the business to hold EBIT margins flat at two per cent.”

Jones says the second half of fiscal 2023 has started well, with group sales up 6.2 per cent. For the first four weeks of the second half of FY24, group sales, excluding tobacco, increased 0.8 per cent.

“Sales into the second half have continued to be in growth, which is very pleasing. Food and liquor continue to perform well, and they're supported by their competitiveness and that differentiated value proposition,” said Jones.

“Looking at our strategic initiatives, our focus is on a few key areas. Firstly, on improving the quality of the network and our offer to shoppers, then on increasing the resilience and sustainability of our customers, members, franchisees and JV partners.  Of course, growing store and customer networks is a key focus too, as is supporting the growth objectives of each one of our businesses,” said Jones.

Shares in Metcash rose 1.27 per cent (4.5¢) to $3.60. A fully franked interim dividend of 11¢ a share payable on January 30, reduced from 11.5¢.