Metcash lifts FY11 profit 6.1% on strong sales

Metcash lifts FY11 profit 6.1% on strong sales

Consumer goods wholesaler Metcash (ASX:MTS) grew its net profit 6.1% to $227.6 million for the year ending in April.

The company, which supplies grocery, liquor and hardware goods to stores, reported unaudited results showing a 7.4% increase in revenue to $12.46 billion.

Wholesale sales from the company's core operations increased by the same percentage as overall revenue, to $12.36 billion.

These operations include IGA Distribution, the company's largest division, which distributes products to IGA stores.

IGA Distribution recorded sales of $7.56 billion and ebita of $361.8 million, up 4.4% from the prior year.

Metcash CEO Andrew Reitzer said the company had invested in helping open 65 new independent retailer stores, with 56 of these joining the IGA brand, and a further 17 retailers converted to IGA from other store brands.

The company's Mitre 10 business contributed ebita of $20.7 million from revenue of $797 million during the first full year of operation under the Metcash name.

Liquor sales under the Australian Liquor Marketers brand were $2.3 billion, up 2.7% on a like-for-like basis, while Campbells Wholesale contributed revenue of $1.71 billion.

But despite the strong result, Metcash expects market conditions to stay challenging for the rest of the calendar year, warning in its preliminary results that product deflation, underlying cost inflation and consumer caution will likely remain issues.

Because of these factors and the pending Federal Court decision on its acquisition of the Franklins supermarket chain, the company said it would provide a forecast when it releases its half year results in December.

MTS shares grew 0.52% in Tuesday's trading to $3.900.

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Tags financial resultsMetcashASX:MTS

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