The Metcash Ltd (ASX: MTS) share price is under the spotlight after reporting its FY25 result. It’s currently up by over 4%.
Metcash has a food division which supplies IGA supermarkets and various business customers (like restaurants, cafes and hotels), a liquor division that supplies a number of independent liquor chains, and a hardware division which includes Total Tools, Home Hardware, Mitre 10 and other businesses.
FY25 first-half result
Let’s look at some of the highlights from the report for the 12 months to 30 April 2025:
- Group revenue grew by 8.9% to $17.3 billion
- Group underlying EBIT rose by 2.3% to $507.8 million
- The underlying net profit after tax (NPAT) fell by 2.4% to $275.5 million
- Statutory net profit after tax rose 10.1% to $283.3 million
- Operating cashflow increased 11.7% to $539 million
- Final dividend per share of $0.095
- Annual dividend per share of $0.18
The food pillar reported that its revenue grew strongly, up 11%, and earnings jumped 18% from a combination of growth in its core operations and the inclusion of business supplier Superior Foods.
Metcash reported that its liquor division saw the independent network continued to outperform the broader market, with an acceleration of sales in the second half. However, liquor EBIT declined $5.1 million to $104.1 million with strong trading offset by lower wholesale price inflation on strategic buying.
In the hardware segment, the level of trade activity continued to be subdued, though there was some improvement in the fourth quarter and this has continued into FY26. Total sales rose 2.4%, though EBIT fell 10.2% because of increased depreciation and amortisation related to acquisitions.
Profitability explained
Overall underlying net profit after tax dropped 2.4% because of lower earnings in the hardware and liquor pillars, as well as increased finance costs and higher depreciation and amortisation.
However, statutory profit increased 10.1% because of a $15 million gain following the reversal of a previously impaired loan to an associate and put option valuation adjustment gains of $10.1 million (a net gain).
Outlook for the Metcash share price
The company has seen a positive start to FY26, with group revenue for the first seven weeks up 4.7% underpinned by growth in all pillars.
Food sales increased significantly (up 17%) thanks to the inclusion of Superior Foods and strong growth in Campbells & Convenience.
Liquor sales growth (of 1.5%) is being supported by shopper demand for convenience and quality of the independent offer, in a challenging market. On 20 June 2025, the business entered into a binding agreement to acquire the Steve’s Liquor Warehouse group that includes five retail stores in Victoria and three in Tasmania.
The hardware sales growth (of 1.1%) seen in the FY25 fourth quarter continued into FY26, with an improvement in trade sales with the timber and building supplies categories showing growth. In Total Tools, the recovery in retail margins in the second half of FY25 has continued into FY26.
I’m not surprised the Metcash share price has risen more than 4% in response considering the positive outlook the company talked about. I think it’s a promising ASX share to buy in light of the RBA rate cuts.
