Metcash Limited’s FY24 results, published yesterday, reveals its Liquor department to be in growth despite the challenging market conditions. This includes a 4.9% increase in total earnings in the year ending 30 April 2024, with final EBITS sitting at $109.2 million. This strong performance comes at a time where other retail outlets have been struggling as a result of cost of living pressures.
Metcash Limited’s CEO Doug Jones said, “I am pleased to report that the Company has delivered strong results for FY24, a year in which there was a further decline in the external environment. The results have been underpinned by our strategy, which is clearly working, and the disciplined execution of key initiatives.”
Metcash’s Liquor department, Australia’s largest drinks supplier to independently owned liquor retailers in Australia and the largest broad range liquor wholesaler in Australia, performed strongly in spite of the current challenging trading conditions being felt industry wide.
According to Jones, “our Liquor pillar continued to outperform the market, win share and deliver strong earnings growth. Its diversified customer strategy and shopper preference for competitive localised offers were key drivers of the pleasing results.”
Metcash added in its ASX announcement that the “highest growth categories were again RTDs and beer, with cost of living pressures driving shopper preference for lower priced value choices.”
Metcash’s liquor portfolio includes its ALM distribution arm along with its Independent Brands Australia (IBA) network of banner groups such as Cellarbrations, The Bottle-O, IGA Liquor, and Porters Liquor. ALM supplies over 12,000 customers, whilst the IBA retail network consists of more than 1,800 tier one bannered stores across Australia and New Zealand.
While the 1.9% decline of Metcash Liquor’s on-premise sales over the course of the financial year was “in line with market trends”, its “growth in sales to independent retail and contract customers more than [offset the] decline. ALM wholesale sales to retail and contract customers increased 2.2%, resulting in further market share gains.
The overall strong results of Metcash’s liquor division has positioned it in a strong position for future structural growth.
“The Company’s transformation into a more diversified, resilient and high-quality business continues to position it for ongoing success,” said Jones.
“[Its overall] cash performance was a standout for the year with operating cashflow growing 30% on the prior corresponding year. Our focus on disciplined execution with cash, costs and working capital initiatives is delivering significant tangible benefits.
“Metcash’s diversified growth platform, capabilities and the successful execution of its strategy have underpinned strong results in recent years, with earnings increasing 56% (12% CAGR) since FY20.”
