Metcash has been forced to revise its full year underlying EPS guidance due a combination of factors that are impacting on the company’s performance.
At the company’s AGM, Metcash CEO Andrew Retizer said there were some negatives in the numbers which were disappointing, resulting the revised guidance to be -2 per cent to -6 per cent.
“The number of Franklins stores that had to be closed or will be closed was higher than anticipated and the stores had deteriorated more than expected as a result of the delay in the sale,” he said.
“This coupled with the loss and closure of some stores and loss of operating leverage due to ongoing deflation will have to be managed carefully in the second half of the year.”
Despite continuing headwinds including, tough trading conditions, continuing price deflation and aggressive marketing campaigns being run by the major self supply chains, Metcash reported a growth in EBITA.
Its first half year results for 2013 shows a 1.2 per cent lift in EBITA to $206.2 million from $203.7 million for the same period last year.
The result was achieved on a 3.5 per cent rise in wholesale sales from $6.07 billion in the first half of financial year 2012 to $6.28 billion.
Reitzer said the core business remains strong and acquisitions are adding value.
“Revenue, underlying earnings and cash flows are all strong. Our net working capital position has improved and our strategy of diversifying the business is beginning to show results,” he said.
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