Metcash Annual Profit Rises 12% on IGA Supermarkets

Metcash Ltd., Australia’s biggest grocery wholesaler, said annual profit rose 12 percent because of higher sales to its independent customers.

Net income rose to A$227.6 million ($192 million), or 29.7 cents a share, in the 12 months ended April from A$202.5 million, or 26.5 cents, a year earlier, Sydney-based Metcash said in a statement today. Earnings per share in fiscal 2011 are forecast to rise between 6 percent and 8 percent, the company said.

Metcash’s customers, like larger rivals Woolworths Ltd. and Wesfarmers Ltd., experienced slower growth in the second half as the impact of government stimulus measures waned and Australia’s central bank raised borrowing costs. IGA, an association of mostly independently owned grocers that buys from Metcash, maintained its market share at almost 20 percent, the company said.

“While current trading conditions remain subdued, we are confident of further growth in our earnings per share in the 2011 financial year,” Chief Executive Officer Andrew Reitzer said in the statement.

Sales rose 4.9 percent to A$11.5 billion, Metcash said. The profit figure compares with the A$233 million average derived from seven analyst estimates compiled by Bloomberg.

Metcash shares yesterday fell 2.5 percent to A$3.85 and have declined 14 percent this year compared with a 9.1 percent fall in the benchmark S&P/ASX 200 index.

IGA, formerly known as Independent Grocers of Australia, had a 9.8 percent increase in earnings before interest, tax and amortization to A$346.5 million, while revenue rose 4.1 percent.

(Source:www.bloomberg.com)