IGA earnings up and hardware division a drag on Metcash as profit shrinks

IGA earnings up and hardware division a drag on Metcash as profit shrinks
  • PublishedJune 24, 2024

IGA parent company Metcash has delivered a smaller profit for the financial year as cash-strapped customers shop in what chief executive Doug Jones says is the ‘most value conscious environment in recent memory’.

The listed wholesaler and conglomerate’s profit was 8.2 per cent less than the year before at $282.3 million on the back of weaker earnings from its hardware division and higher costs.

Food sales were up 4.6 per cent, but items per basket were down as customers shopped around to keep costs down. Customers were also buying cheaper products, with the sale of items on promotion growing faster than those not.

IGA has more than 250 stores in WA and 1281 nationwide.

Underlying earnings for the food division were up 3 per cent to $210.1m and revenue lower by 1.2 per cent to $8.3b.

“In food, strong earnings growth was delivered in the most value-conscious shopping environment in recent memory, providing further evidence of its shift to a sustainable and resilient business model,” group chief executive Doug Jones said.

It comes as The Federal Government pledges to accept all recommendations of a recent probe into the Food and Grocery Code of Conduct.

Meanwhile, underlying earnings for the year across the group’s Cellarbrations, IGA Liquor and Thirsty Camel stores were up 4.9 per cent to $109.2m, but customers were buying less on the whole and choosing premixed drinks and beer over wine and spirits.

Earnings in hardware — covering Total Tools and Mitre 10 — were off 3.8 per cent to $210.9m as a result of lower sales volumes and increased ‘cost of doing business’ pressures.

Group revenue lifted 0.7 per cent to $18.2b for the year.

Earlier in 2024 Metcash bought food service distributor Superior Food for $412.3m, Bianco Construction Supplies for $82.2m, and frame and truss operator Alpine Truss for $64m.

Shares in Metcash last changed hands at $3.78.

SOURCE: 9NEWS

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