Kalkine: ASX 200 Lifts as Metcash Unveils FY25 Update and Hardware Merger

Highlights

• Metcash Ltd (ASX:MTS) reports a stronger-than-expected FY25 earnings update

• The company merges its Independent Hardware Group and Total Tools into one division

• Leadership changes follow the merger as Metcash repositions its hardware strategy

The ASX 200 gained ground with support from retail and wholesale-linked sectors, as Metcash Ltd (ASX:MTS) released an update on its financial year performance. Operating across food, liquor, and hardware divisions, Metcash delivers supplies to independent retailers, including IGA supermarkets and bottle shops, and operates hardware brands such as Mitre 10, Home Hardware, and Total Tools.

Metcash’s latest earnings update reflects progress in each core division, with improved outcomes anticipated in group earnings. This follows the company’s internal review as it finalises the financials for the year ending April.

Indexes relevant to Metcash’s operations include the All Ordinaries, Consumer Staples, and Consumer Discretionary indexes, which help track trends within retail, wholesale, and hardware segments. The ASX 200 benchmark was buoyed by the earnings and restructuring announcement.

FY25 Earnings Show Strength Across Core Segments

Metcash’s preliminary review suggests earnings before interest and tax from its three key pillars—food, liquor, and hardware—are expected to exceed previous consensus. The food segment benefited from stable demand across independent grocery operations, while the liquor division delivered consistent growth through its supply network to independent liquor stores.

Hardware earnings were also strong, attributed to ongoing demand across both commercial and DIY sectors. Corporate costs remained within expected levels, supporting the group’s overall earnings position. The group noted that its finalised report will reflect underlying net profit that exceeds initial market expectations.

Hardware Division Reorganised for Greater Scale

In a major structural change, Metcash confirmed the merger of its Independent Hardware Group and Total Tools into a single entity named the Total Tools and Hardware Group. This move aligns with the company's broader plan to streamline its operations under unified leadership and a standardised business model.

The company’s hardware portfolio includes a mix of corporate-owned and franchise operations across Australia, catering to both professional tradespeople and home renovators. With the merger, Metcash aims to increase strategic alignment, improve operational efficiency, and unlock synergies between the existing hardware platforms.

Scott Marshall, the current head of the Independent Hardware Group, has been appointed to lead the newly formed hardware group, following the planned departure of Richard Murray, who served as CEO of Total Tools.

Strategic Focus on Simplification and Growth

The hardware division merger is expected to simplify the company’s structure and enable improved collaboration between different store formats. By combining the scale of Independent Hardware Group with the specialty strength of Total Tools, Metcash aims to enhance support for franchisees, independent operators, and its corporate store network.

The new group structure is also intended to support future expansion and create efficiencies across supply chains, property operations, and marketing. This move further positions the business to respond to evolving consumer trends in both residential and commercial hardware markets.

Market Response Driven by Update and Structural Change

The ASX:MTS share price moved higher in response to the earnings update and corporate restructuring. Broader market sentiment within the retail and industrial supply space showed signs of strength, with improved investor attention toward operational performance and restructuring plans.

Metcash continues to operate across food, liquor, and hardware channels, with its business model underpinned by a focus on independent retailers. The updated structure is intended to provide clarity and enable further growth in key verticals. With the ASX 200 showing an upward trend, sector developments such as those from Metcash remain closely watched.