November 23, 2005
- 11:59AM
Grocery wholesaler Metcash Ltd has announced a 50 per cent decline in its
interim net profit to $30.45 million.
Metcash said the completion of its acquisition of Foodland's Australian
business will take place on Thursday.
"Due to the delay in acquiring the Australian assets of FAL
(Foodland), the short term focus will be on servicing the Action chain of
supermarkets and independent customers over the Christmas/New Year trade to
ensure that high service levels are provided and driving the Action chain until
the last of those supermarkets is sold," the company said.
"Key actions in the first 100 days include the review of all
operations, the testing of assumptions for our integration plan, the roll out
of the strategy commencing February 2006 and the commencement of the sale of
Action stores."
Metcash, the company behind IGA supermarkets and Campbells Cash and Carry,
is planning to sell the 62 Action stores that it is acquiring in its $3.3 billion
carve-up of Foodland with supermarket giant Woolworths Ltd.
Metcash announced earlier this month that it had already received
expressions of interest in the stores.
Excluding costs associated with Metcash's recent capital reorganisation and
the acquisition of Foodland Associated Ltd's Australian assets, Metcash posted
a 13.2 per cent increase in interim profit to $56.8 million.
Metcash said the group had performed strongly in the first half of the
year, helped by higher petrol prices.
"The higher fuel prices in this period have had a positive impact on
supermarkets, as consumers spend more money on home prepared food and less on
restaurants and fast food outlets, whilst the convenience sector supplied by
Campbells has seen the negative affect of reduced discretionary spending,"
the company said.
Group revenues stood at $3.45 billion for the six months ended October 31,
2005, down one per cent on the first half of 2004/05.
The board declared an interim dividend of 5.5 cents fully franked, on par
with the same period last financial year.
At 1149 AEDT Metcash shares had fallen three cents to $4.27.