Metcash’s profit has increased by 12.4 per cent to $227.6 million from $202.5 million for the year to 30 April 2010. Wholesale sales rose by 4.9 per cent rise to $11.51 billion from $10.97 billion.
This was despite persistent low inflation in core grocery categories and the receding effects of the government stimulus package, which boosted sales in 2009.
Metcash chief executive officer Andrew Reitzer was pleased with the result.
“As we continue to operate in a low inflation environment, the positive effects of last year’s government stimulus package have receded and interest rate increases have impacted on household budgets.
“IGA retailers retained their market share at 19.9 per cent for the most recent quarter despite subdued market conditions and competition from the national chains.
“All divisions have focused on cost containment in the prevailing low price inflationary environment, while continuing to secure further supply chain improvements and technological innovations to improve warehouse throughput.
“While current trading conditions remain subdued, we are confident of further growth in our earnings per share in the 2011 financial year, subject to economic conditions remaining stable,” concluded Reitzer.
Metcash expects that the low sales growth in the food and liquor sectors will continue to December 2010. This is due to the government stimulus felt in FY2009, low food price inflation and interest rate increases (150 basis points in FY2010). Against this background, the company provides guidance of six to eight per cent growth in underlying EPS for FY2011.