Highlights

  • FY26 group Revenue reached AUD19.6 billion, up 0.7%.
  • Underlying EBIT was AUD503.7 million, down 0.8%.
  • Food, Liquor and Hardware recorded different revenue and Earnings trends.
  • Technology Investment and store ownership introduce execution and operating risks.

Metcash Limited (ASX:MTS) supplies independent food, liquor and hardware retailers across Australia and operates related retail businesses. Its FY26 results reflected differences between the three divisions, including a reduction in tobacco-related sales and ongoing technology and Acquisition spending. The company is also increasing its direct involvement in supermarket operations, which changes its exposure to retail costs alongside its established wholesale activities.

FY26 earnings and cash flow

Metcash (ASX:MTS) reported FY26 group revenue of AUD19.6 billion, an increase of 0.7%. Excluding tobacco, revenue grew 3.8%, illustrating the effect of contraction in that wholesale category on the headline figure. EBITDA increased 1.9% to AUD761.7 million, while underlying EBIT declined 0.8% to AUD503.7 million.

Underlying net profit after tax was AUD268.8 million, down 2.4%, while statutory net profit was AUD279.1 million, down 1.5%. Underlying Earnings Per Share were 24.5 cents compared with 25.1 cents. The board maintained the annual Dividend at 18 cents per share, fully franked, including a 9.5-cent final payment.

Operating Cash Flow rose 3.5% to AUD558 million. Metcash (ASX:MTS) reported net Debt of AUD616.6 million, a Leverage Ratio of 1.01 times and AUD967.3 million of undrawn facilities. These figures describe funding capacity at the reporting date, rather than the future profitability of acquisitions or technology programmes.

Different trends across three divisions

Food revenue was AUD10.5 billion, down 0.6%, but rose 5.4% when tobacco was excluded. Food EBIT increased 5.4% to AUD261.8 million. The contrast matters because reported growth is affected by product-mix changes as well as sales through the independent grocery network.

Liquor revenue increased 1% to AUD5.4 billion, while EBIT declined to AUD100.1 million from AUD104.1 million. The difference between sales and earnings indicates that turnover alone did not translate into higher operating profit. Hardware and Tools revenue rose 4.3% to AUD3.7 billion, with EBIT of AUD177.3 million. The company also disclosed an adjusted figure of AUD184.2 million before identified one-off costs.

Metcash (ASX:MTS) operates in categories exposed to different spending patterns. Grocery Demand is relatively recurring, whereas hardware purchases can respond to construction and renovation activity. Liquor trading is affected by consumer budgets and promotional competition. These distinctions make divisional reporting more informative than the group revenue change alone.

Store ownership and technology spending

The company is acquiring selected supermarkets while continuing to Supply independently operated stores. Owning outlets can change the mix of revenue, but it also brings direct responsibility for wages, occupancy, inventory and store-level profitability. Metcash (ASX:MTS) reported AUD68.9 million of acquisition spending in FY26. Performance should be judged by the financial contribution of acquired stores rather than the number purchased.

Program Horizon, its technology and enterprise-system programme, incurred AUD17.6 million of FY26 expenses and had a reported cumulative cost of AUD286.7 million. Management expected completion during FY27. The company also reported that its business-to-business ordering marketplace handled approximately AUD5.9 billion of sales. Delivery timing, costs and adoption remain relevant operational measures.

Early FY27 trading and risks

In the first seven weeks of FY27, Metcash (ASX:MTS) reported Food sales growth of 0.7%, Liquor growth of 1.3% and Hardware and Tools growth of 5.8%. These short-period figures are not a full-year earnings forecast. Risks include continuing tobacco declines, weaker discretionary demand, integration costs and the execution of technology changes.

Key Insights

Metcash (ASX:MTS) reported modest group revenue growth in FY26, with stronger Food EBIT but lower Liquor earnings. Cash generation and available facilities support operations, while the effects of direct store ownership and technology expenditure require further reporting.