Record year for Metcash

Metcash has released its financial results for the full year ended 30 April 2023, which show it was a record year for Group revenue, up 6.2% to $15.8billion.

Total liquor sales increased 8.3% on a normalised basis to $5.1billion (+37.7% 3yr basis), with continued growth in sales to retail and on-premise customers.

Metcash said the retail liquor network again performed well with strong demand buoyed by improved competitiveness, a preference for local shopping and continuation of the at-home consumption trend.

While sales increased to both the IBA network and contract customers, the rate of growth tapered in the fourth quarter reflecting the impact of higher cost of living pressures, with some switching to lower priced value choices.

Highlights included:

  • Sales of owned and exclusive brands increasing 17% in the year
  • Wholesale sales to the IBA banner group and contract customers increasing 5.6%
  • Average basket size and spend both rising for the year, driven by growth in the RTD and spirit categories
  • Sales to on-premise customers increasing 31.3%

Liquor EBIT increased 8.9% to $104.1m on a normalised basis reflecting the contribution from the strong trading performance, partly offset by additional fuel, freight and labour costs.

Group CEO Doug Jones (above) said: “It has been another record year for Metcash, and one that represents continued progress on the outstanding results in the prior two years.

“Both sales and earnings were at record levels while facing additional challenges associated with the rapid increase in interest rates and cost of living, particularly towards the end of the year.

“We are continuing to replace our core Food and Liquor systems under Project Horizon to reposition Metcash as a modern, technology-led wholesaler and retailer. Our new inventory forecasting and replenishment system was rolled out in the year, and it is already delivering noticeable benefits through improved forecasting accuracy, and the core finance module has now been in place through two year-ends.”

“Going forward, the fundamentals for our businesses remain sound, and we are well positioned to continue delivering growth and superior returns for shareholders through the cycle.

“Metcash is now much larger, more diversified and stronger than it was three years ago, and our management teams and retail networks are experienced at managing well through challenges, including changesin the external environment.

“Importantly, we have healthy, supportive and growing retail networks. Our financial position is strong and we have an experienced management team to continue progressing our growth plans.”

Outlook for FY24

During the first seven weeks of FY24 (to 18 June) total liquor sales increased 1.2%, with growth in retail partly off-set by a slight decline in on-premise sales.

“There are signs that the rapid increase in interest rates and cost of living are starting to impact consumer confidence and the behaviour of some shoppers,” Jones said.

“We continue to focus on ensuring our retailers remain competitive, with options that provide the right value for shoppers.

“In Liquor, underlying demand remains strong but there has been a noticeable shift to more ‘value’ options, particularly in on-premise sales.”

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