Consumers shopping at their local a big part of Metcash’s ‘stand out’ year

June 28, 2021
By Ioni Doherty

Revenue for Metcash for the financial year ending on 30 April 2021 jumped by 10 per cent to $14.3 billion, with a 19.2 per cent jump in liquor sales, to $4.4 billion.

“It has been a standout year for Metcash, with record sales underpinning significant earnings growth and record operating cashflow,” said Group CEO Jeff

The company attributed the lift in revenue to consumer trends towards shopping with local retailers, an increase in at-home alcohol consumption, the decline in overseas travel and duty-free shopping and the implementation of Metcash’s five year growth strategy, MFuture.

Metcash CEO, Jeff Adams said, “The early success of our MFuture initiatives laid the foundations for a very successful year for Metcash and our independent retailers, with their improved competitiveness being a key factor in the retention of new and returning customers gained though COVID.

“This, together with the continuation of an increased preference for local neighbourhood shopping and the migration from cities to regional areas, has driven strong sales growth across our independent retail networks, significantly improving their overall health.”

Retail in the IBA retail banner group  – Cellarbrations, the Bottle-O, IGA Liquor, Duncans, Thirsty Camel, Liquor@, Big Bargain and Porters  – increased by 19.7 per cent (FY20: +3.2 per cent), with strong growth continuing in the second half of FY21, despite a recovery in ‘on-premise’ sales.

Liquor profits rose 22 per cent to $88.7 million as sales jumped 19.2 per cent to $4.38 billion, boosted by the acquisition of the Kollaras private label business.

Strength in the ALM continues to rise with the business reporting that in the first eight weeks of FY22, sales have grown by 26.0 per cent compared with the same period in FY20, and 17.3 per cent compared with the same period in FY21.

Looking ahead, $375 million will be invested over the next three years with the Liquor pillar focused on progressing MFuture initiatives including expansion of private and exclusive labels, e-commerce acceleration, supply chain flexibility and efficiency and driving brand awareness and appeal. Investment also includes retail upgrades and new store formats.

The business intends to buy back shares up to $175 million, this having been determined as the best way to share create shareholder value.

“Metcash’s strong Group performance and financial position, together with confidence over future operating cashflows, will result in approximately $354m being returned to shareholders. This includes a 40 per cent increase in FY21 dividends to 17.5c per share and the announcement today of an Off-Market Buy-Back of up to approvimately $175m,” said Adams.

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