Metcash (ASX:MTS) Kicks Off 2HFY25 with 8% Sales Growth Driven by Food and Liquor Segments

Highlights

• MTS’ sales revenue climbed 8.1% YoY in 1HFY25, supported by acquisitions and sectoral growth.
• Metcash aims for AUD 15 million in annualised savings through efficiency measures.
• In the first four weeks of 2HFY25, MTS recorded an 8.0% YoY increase in total sales.

Metcash Limited (ASX:MTS) is an Australian wholesale distribution and marketing giant. The diversified business model of MTS helps it navigate market complexities, with opportunities emerging in both the food and liquor sectors. The recent acquisition of Superior Foods has strengthened the food pillar and has contributed to market share expansion and revenue growth. Synergies from these transactions enhances cost management and operational efficiencies.

Similarly, the liquor segment benefits from the IBA network's localised offerings, driving market share gains.

Metcash is actively pursuing operational efficiencies, targeting AUD 15 million in annualised cost savings through supplier negotiations and improved cash flow management.

Recent financial performance

For the half-year ended 31 October 2024 (1HFY25), Metcash reported an 8.1% YoY increase in sales revenue, reaching AUD 8,470.9 million. Meanwhile, net profit rose marginally by 0.6% YoY to AUD 141.8 million, despite higher finance costs reducing underlying profit after tax by 5.5% YoY. Cash and cash equivalents dipped slightly by 1.9% YoY.

During the reported period, group revenue (including charge-through sales) jumped 6.3% YoY, supported growth across liquor, food and hardware pillars and partly assisted by acquisitions.

In the first four weeks of 2HFY25, MTS recorded an 8.0% YoY increase in total sales. Food sales surged by 22.6% YoY (excluding tobacco), supported by a 2.9% YoY rise in supermarket sales and a 6.1% YoY boost from the acquisition of Superior Foods.

During the reported period, liquor sales grew by 4.4% YoY, with IBA retail and contract customer sales climbing 5.0% YoY. Meanwhile, hardware performance was mixed — IHG sales rose 3.6% YoY, and total tools saw a 2.6% YoY uptick over the first three weeks.

Share performance of MTS

MTS shares closed at AUD 3.10 per share on 10 March 2025. Over the past year, the share price has dropped by almost 17.90%, while in the last three months, it has declined by 5.20%.

52-week high of MTS is AUD 4.06, recorded on 13 March 2024 and 52-week low is AUD 3.00, recorded on 13 November 2024.

Support and Resistance Summary

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 10 March 2025. The reference data in this report has been partly sourced from REFINITIV.

Technical Indicators Defined:

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Disclaimer

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