Metcash (ASX:MTS) starts FY25 on a positive note, focuses on managing costs, leveraging acquisitions

Highlights

• Metcash is an ASX-listed wholesale marketing and distribution firm operating through the liquor, grocery, hardware and food segments
• In the first seven weeks of FY25, group sales of MTS surged 2.2% YoY amid challenging market conditions
• Perpetual Investment Management Limited has the maximum stake in the firm with a shareholding of 7.73%

Metcash Limited (ASX: MTS) is an ASX-listed wholesale marketing and distribution firm that operates via the liquor, grocery, hardware and food segments. The company caters to a growing network of independent retailers in New Zealand and Australia.

In the financial year 2024 (FY24), the company recorded a 0.7% YoY increase in group revenue to AUD 15,912.4 million, including charge-through sales. During the reported period, EBIT fell by 0.9% YoY to AUD 496.3 million and operating cashflows jumped 29.5% YoY to AUD 482.6 million.

The performance in FY24 was driven by resilience, diversification and disciplined execution. In FY24, the company enhanced its market position in the hardware and liquor segments, recorded significant improvements in the cash flow and cost management and maintained its position in the food segment.

In the first seven weeks of FY25, group sales of MTS surged 2.2% YoY despite challenging market conditions, including a 3.6% YoY increase in food sales (excluding tobacco sales), 3.1% YoY growth in liquor sales and 0.6% increase in hardware sales.

Top 10 shareholders of MTS

The top 10 shareholders of MTS have around 43.45% of the shareholdings in the company, while the top four have 24.76% of the shareholding. Perpetual Investment Management Limited and Vanguard Group, Inc. have the highest stake in the firm with a shareholding of 7.73% and 5.98%, respectively.

Recent business update

In an ASX update dated 30 August 2024, the company notified that Marget Anne Haseltine has changed interest in the firm with the acquisition of 65,936 MTS shares at AUD 3.57 apiece. This represented an indirect interest, with the registered holder being Worrall SMSF Pty Ltd ATF Worrall Superannuation Fund. 

Outlook

In FY25, the company projects nearly AUD 15 million in additional cost savings every year. The focus in FY25 is on leveraging recent acquisitions, sustaining business performance in challenging markets, executing cost and cash initiatives and advancing core technology initiatives.

Share performance of MTS

MTS shares closed 0.56% higher at AUD 3.60 apiece on 2 September 2024. In the last one year, the share price of MTS has declined by almost 3.23%, while in the past three months, it has decreased by around 4.51%.

The 52-week high of MTS is AUD 4.06, recorded on 13 March 2024, and the 52-week low is AUD 3.410, recorded on 5 December 2023.

 MTS Daily Technical Chart, Source: EODHD/Others

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 02 September 2024. The reference data in this report has been partly sourced from EODHD/Others.

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