Australian grocer Metcash surges most in 2-1/2 years on strong results

Metcash

26/06/2023 03:55

June 26 (Reuters) - Shares of Australia's Metcash
 MTS.AX  surged up to 9% on Monday, in their biggest intraday
jump since December 2020, after the grocery wholesaler and
distributor's strong annual earnings on the back of robust
demand across segments.
    Metcash earlier hit A$3.915, its highest level since May 15,
before tempering to a gain of 4.7% to A$3.76 by 0223 GMT. By
then, more than 7.5 million shares had changed hands, compared
with a 30-day daily average of 4.3 million shares.
    The stock was the second-biggest gainer in the ASX 200
benchmark index  .AXJO 
    Metcash recorded an annual underlying profit after tax of
A$307.5 million ($205.4 million) in fiscal 2023, up 4.6% from a
year ago, while revenue jumped 6.2% to A$15.8 billion.
    However, as with all grocers and retailers in Australia
currently, high interest rates and cost of living are weighing
on consumer sentiment.
    "While demand continues to be solid in all pillars, the
impact of higher interest rates and cost of living has started
to impact consumer confidence and the behaviour of some
customers and shoppers in our retail networks," Metcash said.
    Metcash's trading update for the first seven weeks of fiscal
2024 indicates a continued loss of share in the food segment,
with sales growth of 2%, which the market is expected to focus
on, analysts at Citi said in a note.
 
 ($1 = 1.4970 Australian dollars)

 (Reporting by Sameer Manekar in Bengaluru; Editing by Savio
D'Souza)
 ((Sameer.Manekar@thomsonreuters.com; Twitter: https://twitter.com/sameer_manekar))