Retail holds up for Metcash, with distribution growth

Number three retailer Metcash announces profit rise on back of distribution arm, with supermarkets still strong

Number three retailer Metcash has announced a 2.6 percent rise in profit for the last financial year, crediting its distribution arm for beating the recession.

The parent company of the independent IGA chain posted a net profit of $202.5 million for the financial year, holding firm along with other supermarket chains in the face of falling consumer confidence.

The distribution business, IGA Distribution, posted an 11.3 percent growth and an EBITDA growth of 14.7 percent from 275.1 million to $315.5 million.

Metcash Chief Executive Officer Andrew Reitzer says he expects earnings to grow a further 10 percent during the next financial year and believes growing demand for independent retailers has also been a strong factor in growth.

"Metcash has delivered a strong result with sales accelerating in the second half on the back of strong consumer support of out independent retailer customers," Reitzer says.

"We are continuing to invest in our core businesses to retain their competiveness against the national chains and reduce costs."

Reitzer also says he does not expect the core grocery market to weaken due to the fact more people are eating in and holidaying within Australia, thus shopping at widely dispersed IGA stores.

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