Ian Morrice’s ambitious revamp at Metcash is off to a slow start with the company today issuing a profit warning which sent its stock price plummeting.
Granted, it kis a horror day on the market with lower oil prices sending BHP Billiton down below $30 for the first time since the GFC days of 2007.
Metcash(MTS) also suffered the departure of a key holder with UBS dumping close to 19 million shares at $2.25 as the stock headed lower.
Morrice has more revamps going on at Metcash than most Scots have had hot dinners, but the bottom line is after reporting earnings of $165 million in the first half it will report only $155 million in earnings before interest and tax in the second half.
Margins on his food and liquor stores has fallen to a touch over 2 per cent which is half what they were in the 2013 financial year.
The revamp is running six months behind schedule but Morrice is confident when it hits it will work.
His problem is his competitors are not standing still, and as noted last week the folk at Aldi are reaping havoc.
Nielsen figures show the majors, Coles and Woolies, have boosted Aldi’s roll out by pushing their own house brand lines and in the process making Aldi look good.
Morrice has his own house brand line in Black and Gold, but he is starting from behind.
In the meantime, stockmarket punters are not hanging around to ask questions pushing the company’s value down 15 per cent in early afternoon trade.