By Metcash, the owner of IGA supermarkets, has announced three new acquisitions worth $375 million in the food services and construction sectors.
Metcash, the owner of IGA supermarkets, has announced three new acquisitions worth $375 million in the food services and construction sectors. The company said that the acquisitions were part of its strategy to diversify its revenue streams and grow its market share in the non-grocery segments.
The company has acquired Total Food Network, a Queensland-based food service distributor, for $125 million. The company has also acquired Kollaras Trading Company, a NSW-based food and beverage wholesaler, for $190 million. The company has also acquired a 70% stake in Total Tools, a national network of professional tool retailers, for $60 million.
The company said that the acquisitions were expected to be earnings accretive in the first year of ownership, and to generate annualised sales of over $600 million. The company also said that the acquisitions would enhance its scale and capabilities in the food services and construction sectors, and provide opportunities for synergies and cross-selling.
The company has reported strong financial results for the first half of the 2024 financial year, driven by the increased demand for groceries and hardware amid the COVID-19 pandemic
The company has reported strong financial results for the first half of the 2024 financial year, driven by the increased demand for groceries and hardware amid the COVID-19 pandemic. The company’s revenue increased by 12.2% to $7.06 billion, while its underlying profit after tax increased by 43% to $129.6 million. The company’s earnings per share increased by 42.9% to 13.8 cents, while its interim dividend increased by 33.3% to 8 cents per share.
The company’s food segment, which includes IGA, Foodland, and Friendly Grocer, recorded a revenue growth of 10.6% to $4.8 billion, while its earnings before interest and tax (EBIT) increased by 30.4% to $182.7 million. The company’s hardware segment, which includes Mitre 10, Home Timber and Hardware, and Hardings, recorded a revenue growth of 20.6% to $1.3 billion, while its EBIT increased by 66.4% to $81.6 million. The company’s liquor segment, which includes Cellarbrations, Bottle-O, and IGA Liquor, recorded a revenue growth of 14.4% to $1.8 billion, while its EBIT increased by 16.4% to $36.6 million.
The company’s CEO, Jeff Adams, said that the company had delivered a strong performance across all its segments, despite the challenging trading conditions and increased costs due to the COVID-19 pandemic. He said that the company had benefited from the shift in consumer behaviour towards shopping locally and spending more on home improvement and entertainment. He also said that the company had invested in its digital capabilities and supply chain efficiency, and had supported its independent retailers and suppliers during the crisis.
The company expects to face increased competition and reduced consumer spending in the second half of the 2024 financial year, but remains confident in its growth prospects and strategic initiatives
The company expects to face increased competition and reduced consumer spending in the second half of the 2024 financial year, but remains confident in its growth prospects and strategic initiatives. The company said that the food segment would face increased pressure from the major supermarket chains, which have regained some market share and improved their price competitiveness. The company also said that the hardware segment would face some moderation in demand, as the stimulus measures and the pent-up demand start to ease. The company also said that the liquor segment would face some challenges, as the restrictions on social gatherings and travel impact the consumption patterns.
However, the company said that it was well positioned to continue to grow its sales and market share in the non-grocery segments, and to leverage its network of independent retailers and suppliers. The company also said that it was focused on executing its strategic initiatives, such as expanding its private label and exclusive brands, enhancing its online and omni-channel offerings, and pursuing growth opportunities through acquisitions and partnerships.
Adams said that the company was pleased with its progress and performance in the first half of the 2024 financial year, and that it was optimistic about its future. He said that the company had a clear vision and strategy to become the champion of the independent sector, and to deliver value and convenience to its customers and shareholders.
Metcash, the owner of IGA supermarkets, has announced three new acquisitions worth $375 million in the food services and construction sectors. The company has also reported strong financial results for the first half of the 2024 financial year, driven by the increased demand for groceries and hardware amid the COVID-19 pandemic. The company expects to face increased competition and reduced consumer spending in the second half of the 2024 financial year, but remains confident in its growth prospects and strategic initiatives.