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Business Description: Metcash Limited (MTS) is a wholesale distribution and marketing company specializing in grocery, fresh food, liquor, hardware and automotive parts & accessories. MTS operates predominantly in Australia and a smaller liquor business in New Zealand.
Strategy Analysis: Food distribution is the main growth driver, realising solid growth and margin improvement through scale efficiencies. The lack of real competition from Coles has allowed larger format Woolworths to capture significant market share for superior earnings and margins while IGA independent stores, backed by MTS, find favour across smaller catchment areas. MTS will use its balance sheet to fund inventory expansion by easing credit terms for larger stores. The aim is to encourage independent operators to invest more free capital into stores. Improved fit out and customer service boost the shopping experience.
Metcash reported NPAT down 13.1% to $82.0m for the half-year ended 31 October 2012. Revenues from ordinary activities were $6.34bn, up 3.5% from the same period last year. EBITA lifted 1.2% from $203.7m for 1H12 to $206.2m for 1H13. Diluted EPS was 9.75 cents compared to 12.24 cents last year. Net operating cash flow was $144.7m compared to $252.4m last year. The interim dividend declared was 11.5 cents compared with 11.5 cents last year. The company reported that it has revised its full year underlying EPS guidance to -2% to -6%.
By Michael McCarthy (chief market strategist, CMC Markets) 19/12/2014 |
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By Betty Lam (Sales Trader, CMC Markets) 18/12/2014 |
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By Michael McCarthy (chief market strategist, CMC Markets) 18/12/2014 |
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By Betty Lam (Sales Trader, CMC Markets) 11/12/2014 |
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By Ric Spooner (Chief Market Analyst, CMC Markets) 10/12/2014 |
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BR Securities Australia Pty Ltd 2/12/2014 |
December 2014 could go down as a nasty moment in Australian finance. MYEFO will reveal a deteriorating budget deficit and the UNFCCC meeting in Lima, Peru will provide the agreement, to be ratified in Paris in 2015, on how much (or little) CO2 is to be allowed into the atmosphere from 2020.
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