Metcash (MTS) H1 2025 earnings summary

Executive summary

• Group revenue rose 6.3% to $9.6bn, with strong Food and Liquor sales offsetting Hardware softness; diversified portfolio strategy delivered growth and market share gains in Liquor, with Food earnings boosted by the Superior Foods acquisition.

• Underlying EBIT was flat at $246.1m; statutory profit after tax rose 0.6% to $141.8m, with underlying profit after tax down 5.5%.

• Superior Foods acquisition completed, contributing $554.8m in sales and $14.3m EBIT, enhancing diversification and resilience.

• Cost-out and synergy programs are on track, targeting $15m in annualised savings.

• Interim dividend of 8.5cps declared, maintaining a ~70% payout ratio.

Financial highlights

• Group sales revenue up 6.3% to $9.6bn (statutory up 8.1% to $8.47bn); underlying EBIT flat at $246.1m.

• Underlying EPS at 12.3c, impacted by higher finance costs and equity raise; reported EPS 13.0c.

• Operating cash flow was $164m, reduced by acquisition timing; three-year average cash realisation ratio ~85.5%.

• Net debt increased to $725m, mainly due to Superior Foods acquisition; DLR at 1.26x.

• Interim dividend of 8.5cps, fully franked, with DRP in place and no discount.

Outlook and guidance

• Early 2H25 trading strong: total sales up 8.0% in first four weeks, with Food ex-tobacco up 22.6%.

• Liquor expected to continue market share gains; Hardware remains under pressure but is positioned for recovery in 2H25.

• FY25 capital expenditure (excluding acquisitions) reduced by $30m below guidance; net finance costs for FY25 expected in the $120–125m range.

• Superior Foods expected to continue performing in line with expectations and deliver scale in foodservice.

• Project Horizon ERP migration progressing, with completion expected in 1H27.