Metcash is squeezing more profit out of flat conditions, posting higher earnings and cashflow on the back of resilient food and liquor sales and a late hardware rebound. The wholesale distribution group reported group EBITDA up 1.9% year on year to $761.7 million even though trading remained patchy across key markets.
Improved momentum in its hardware and tools operations added support, helping offset pressure elsewhere. Investors also pick up a higher cash return, with the board declaring an 18 cent fully franked dividend per share.
Behind the headline profit lift, Metcash’s top line barely moved, with group revenue edging 0.7% higher to $19.6 billion over the year. Underlying EBIT slipped 1.6% to $503.7 million, highlighting margin pressure despite solid demand in core categories.
Operating cashflow proved more robust, rising 3.5% to $558 million as working capital and cost controls fed through. Company disclosures to the ASX stated that food remains the prime engine of profitability.
Food continues to do the heavy lifting, with the segment delivering a 5.4% increase in EBIT supported by ongoing momentum across Metcash-supplied supermarkets. Liquor also held up, reinforcing the group’s positioning in everyday essentials even when households cut discretionary spending.
Hardware and tools turned a corner in the second half, recording a 4.3% uplift after completing the integration of Total Tools and Hardware Group. That integration consolidates scale, streamlines operations and is expected to underpin the group’s cost-saving runway.
Trading has not been uniformly positive, and May stood out as softer as weaker consumer sentiment dragged on volumes. Metcash pointed to geopolitical uncertainty and cost-of-living pressures, including higher interest rates and fuel costs, as key headwinds for shoppers.
Even so, the group says it remains on track to hit targeted annual savings of $25 million in FY27, which is set to support margins if demand stays patchy. Early data from the new financial year indicates sales improving again, suggesting spending patterns may be stabilising as households adjust to recent economic shocks.
