Metcash profits drop 20 per cent, CEO to retire
IGA independent supermarket supplier, Metcash, has reported a 20 per cent drop in profit after tax for its 2017 financial year when compared to its 2016 results.
For Metcash’s 2017 financial year, which ended 30 April 2017, the company reported profit after tax of AUD $171.9 million. In 2016, Metcash reported a AUD $216.5 million profit.
The company attributed the fall in profit to acquiring Home Timber and Hardware from Woolworths and investment in its ‘Working Smarter’ transformation plan.
Food performance in line with FY16 results
Earrings in Metcash’s food division were in line with its 2016 financial year despite the company reporting that it faced “intense competition” in this area of the business throughout the year.
Overall food sales increased by 0.6 per cent to AUD $9.18 billion. Supermarket sales increased 1.3 per cent to AUD $7.65 billion which Metcash said reflected improved performance in Eastern states but weaker sales in South Australia and Western Australia.
Convenience sales dip
Convenience sales declined 2.7 per cent to AUD $1.53 billion with Metcash saying a revision of a key contract during the year led to lower volumes in C-Store Distribution, while in Campbells, sales were adversely impacted by a continuation of the decline in reseller volumes.
Liquor performs well
Liquor sales increased by 3.5 per cent to AUD $3.33 billion with the Independent Brands Australia (IBA) performing well.
Liquor earnings before interest and tax increased by 7.9 per cent to AUD $67 million.
CEO to retire
Whilst announcing Metcash’s 2017 financial year results, the company’s Chief Executive Officer, Ian Morrice, has confirmed he plans to retire in 2018.
By then, Morrice will have been in the top role for five years. He initially joined Metcash as a non-executive Director in June 2012.
Metcash Chairman, Rob Murray, said Morrice has made a number significant contribution to the transformation and growth of Metcash.
“He successfully led a number of key strategic initiatives, including the ongoing transformation program, divestment of our automotive business and the acquisition of Home Timber & Hardware,” Murray said.
Morrice said he will remain in the CEO position until his replacement has successfully transitioned into the role.
Metcash said that Morrice had previously indicated his intentions to retire after five years in the role and expects to make an announcement in regards to his successor in the near future.
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