Metcash has signed a 15 year supply agreement worth approximately $655 million with Liquor Marketing Group and Hotel & Tourism Management (LMG).

The agreement covers supply distribution to approximately 1,700 stores trading under banners such as Bottlemart, Down Under Cellars, Harry Brown, Sip N Save, Western Cellars, Liquor Legends and Urban Cellars.

Metcash also took the opportunity acknowledge trading conditions continue to remain difficult but hope that as it continues to pursue growth initiative it will improve the company’s position. To date, Metcash has already completed the purchase of Automotive Brands Group (ABG), purchase of remaining 49.9 per cent of Mitre 10 and the tender process for new automated Distribution Centre project.

At the time of the company’s last trading update, it announced the core Metcash business would deliver low to mid single digit EPS growth in 2013 financial year. This was before the Placement and the above initiatives. Now, the company has updated its guidance for the full year to a range of 1 per cent to 3 per cent EPS dilution compared to the 2012 financial year’s underlying EPS, with the dilution heavily weighted to the first half.