Metcash (MTS) H1 2025 earnings summary

Executive summary

• Group revenue rose 6.3% to $9.6bn, with strong Food and Liquor sales offsetting Hardware softness; market share was held or grown in all networks, especially in liquor and food.

• Superior Foods acquisition completed, contributing $554.8 million in sales and $14.3 million EBIT since June 2024, and increasing food's share of group revenue and earnings.

• Underlying EBIT was flat at $246.1m; statutory profit after tax rose 0.6% to $141.8m, with underlying PAT down 5.5%.

• Cost-out and synergy programs are on track, targeting $15m in annualised savings.

• New mega distribution centre in Victoria opened, improving efficiency over legacy operations.

Financial highlights

• Group sales revenue (statutory) up 8.1% to $8.47bn; including charge-through sales, up 6.3% to $9.57bn year-over-year.

• Underlying EPS for the half was 12.3c; interim dividend declared at 8.5cps, maintaining ~70% payout ratio.

• Operating cash flow was $164m, down from $217.7m, impacted by acquisition timing.

• Net debt increased to $725m due to acquisitions, with DLR at 1.26x, within the 1-1.75x target range.

• Gross margin improved to 12.9% from 12.2% year-over-year.

Outlook and guidance

• Group sales accelerated to 8% in the first four weeks of the second half, with Food ex-tobacco up 22.6%.

• Hardware expects improved trading in the second half of FY25, with a focus on cost management and growth initiatives.

• Superior Foods expected to continue performing in line with expectations and deliver scale in foodservice.

• FY25 capital expenditure (excluding acquisitions) reduced by AUD 30 million below guidance.