Metcash FY profit slides

Wholesale distribution company will look to bolster fresh food and grocery offering in fiscal 2015.

Metcash (MTS) will look to bolster its fresh food and grocery offering in a bid to combat supermarket giants Woolworths and Coles, after posting a significant fall in full-year net profit.

In the year to April 30, the wholesale distribution company posted a net profit of $169.2 million, a 17.9% decline on $206m in full-year 2013.

Revenue was $13.39 billion, a 3.2% lift on the $12.98bn recorded in the previous year.

Metcash will pay a fully-franked final dividend of 9c on July 25 to shareholders on the register at July 1.

Metcash said the trading environment remained difficult in 2014, with the effects of ongoing deflation, rising utility costs and an increasingly value-driven consumer weighing on the sector.

The group also singled out the "excessive" fuel discounting by the two large grocery chains -- Woolworths and Coles -- as impacting on operating leverage.

The closure of 25 Franklins stores during the year hit Metcash's food and grocery segment, but this was somewhat offset by growth in the liquor, and hardware and automotive segments.

Despite the challenges of 2014, chief executive Ian Morrice said it had been an important transition period for the group as it undertook a strategic review and developed a transformation plan to address the structural challenges of the business, particularly in its food and grocery segment.

"By investing significantly in the fiscal 2015 year in a reshaped model for Metcash Food and Grocery and driving even stronger growth in our other business pillars, we are building a company that can, once again, deliver strong shareholder returns," Mr Morrice said.

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