Business Summary Metcash Limited (MTS) is a wholesale distribution and marketing company specializing in grocery, fresh food, liquor, hardware and automotive parts & accessories. MTS operates in Australia and a smaller liquor business in New Zealand. Food & Grocery: The division's activities comprise the distribution of dry grocery, perishable and general merchandise supplies to retail outlets. MTS have Supermarket and Convenience divisions supplying to independent stores including 1,365 IGA branded stores, 117 Foodland stores, 484 FoodWorks stores and 245 Lucky 7 (convenience) stores. Within the Convenience division there are Campbells Wholesale and C-Store Distribution which service businesses around Australia. Liquor: The division's activities comprise the distribution of liquor products to retail outlets and hotels. Australian Liquor Marketers (ALM) is Metcash's broad-range liquor wholesaler supplying more than 12,000 hotels, liquor stores, restaurants and other licensed premises across Australia. ALM also supports independent retail brands through Independent Brands Australia (IBA) which offers marketing support and variety of retail services. The four national IBA retail banners are Cellarbrations, IGA Liquor, Bottle-O and Bottle-O Neighbourhood. Hardware The division's activities comprise the distribution of hardware supplies and automotive parts & accessories to retail outlets. Mitre 10 is a home improvement and hardware wholesaler which distributes its products through independent and local retail networks. Disinvestment: The Automotive business was sold during the current financial year. On 31 July 2015, the Group sold its entire holding in Metcash Automotive Holdings Pty Ltd to Bursons Group Limited Latest Research Heavy Lifting by Hardware - 1H18 Result EPS boosted by acquisition — Metcash reported a double-digit increase in 1H18 EPS, reflecting the boost from its acquisition in hardware. The Food & Grocery business performed slightly better but it was largely a low earnings base in the pcp. We raise our EPS by 4% in FY18e and 3% in FY19e, helped by lower corporate costs in 1H18 and higher Hardware synergies over the next two years. For more information see full research report 06 Dec 2017. GICS - Food/Staples Metcash Limited ASX Code: MTS Price: $3.45 12 Mth Target Price: $2.90 Rating: Neutral Important Disclaimer - This may affect your legal rights: Because this document has been prepared without consideration of any specific client's financial situation, particular needs and investment objectives, a Bell Potter Securities Limited investment adviser (or the financial services licensee, or the proper authority of such licensee, who has provided you with this report by arrangement with Bell Potter Securities Limited) should be consulted before any investment decision is made. While this document is based on the information from sources which are considered reliable, Bell Potter Securities Limited, its directors, employees and consultants do not represent, warrant or guarantee, expressly or impliedly, that the information contained in this document is complete or accurate. Nor does Bell Potter Securities Limited accept any responsibility to inform you of any matter that subsequently comes to its notice, which may affect any of the information contained in this document. This document is a private communication to clients and is not intended for public circulation or for the use of any third party, without the prior approval of Bell Potter Securities Limited. This is general investment advice only and does not constitute advice to any person. Disclosure of Interest: Bell Potter Securities Limited receives commission from dealing in securities and its authorised representatives, or introducers of business, may directly share in this commission. Bell Potter Securities and its associates may hold shares in the companies recommended. Snapshot Date Market Cap. Shares on issue 12 Month High 12 Month Low 9 May 2018 $3,366m 975.6m $3.66 $1.97 Rating Rating 12 Mth Target Price Capital Gain Gross Yield Implied Total Return Neutral $2.90 -16.7% 6.2% -10.5% Investment Fundamentals FYE 30 Apr 2017A 2018F 2019F 2020F Profit $m 195.0 214.0 223.0 224.0 Profit (norm)* $m 195.0 214.0 223.0 224.0 EPS* ¢ 20.0 22.0 23.0 23.0 EPS Growth % 5.3 10.0 4.6 0.0 P/E* x 17.4 15.8 15.1 15.1 P/E Relative % 0.0 0.0 0.0 0.0 DPS ¢ 5.0 13.0 15.0 16.0 Yield % 1.4 3.7 4.3 4.6 Franking % 100.0 100.0 100.0 100.0 * Adjusted for goodwill and unusual items Source: Based on Citi estimates Share Price Chart Total Return on $10,000 Investment
2
Embed
Metcash Limited ASX Code: MTS Price: $3.10 12 Mth Target ... · PDF fileALM also supports independent retail brands through Independent Brands Australia (IBA) ... Ms Helen Elizabeth
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Business SummaryMetcash Limited (MTS) is a wholesale distribution and marketing companyspecializing in grocery, fresh food, liquor, hardware and automotive parts &accessories. MTS operates in Australia and a smaller liquor business in NewZealand.
Food & Grocery: The division's activities comprise the distribution of drygrocery, perishable and general merchandise supplies to retail outlets. MTShave Supermarket and Convenience divisions supplying to independentstores including 1,365 IGA branded stores, 117 Foodland stores, 484FoodWorks stores and 245 Lucky 7 (convenience) stores. Within theConvenience division there are Campbells Wholesale and C-StoreDistribution which service businesses around Australia.
Liquor: The division's activities comprise the distribution of liquor products toretail outlets and hotels. Australian Liquor Marketers (ALM) is Metcash'sbroad-range liquor wholesaler supplying more than 12,000 hotels, liquorstores, restaurants and other licensed premises across Australia. ALM alsosupports independent retail brands through Independent Brands Australia(IBA) which offers marketing support and variety of retail services. The fournational IBA retail banners are Cellarbrations, IGA Liquor, Bottle-O andBottle-O Neighbourhood.
Hardware The division's activities comprise the distribution of hardwaresupplies and automotive parts & accessories to retail outlets. Mitre 10 is ahome improvement and hardware wholesaler which distributes its productsthrough independent and local retail networks.
Disinvestment: The Automotive business was sold during the currentfinancial year. On 31 July 2015, the Group sold its entire holding in MetcashAutomotive Holdings Pty Ltd to Bursons Group Limited
Latest ResearchHeavy Lifting by Hardware - 1H18 Result
EPS boosted by acquisition — Metcash reported a double-digit increase in1H18 EPS, reflecting the boost from its acquisition in hardware. The Food& Grocery business performed slightly better but it was largely a lowearnings base in the pcp. We raise our EPS by 4% in FY18e and 3% inFY19e, helped by lower corporate costs in 1H18 and higher Hardwaresynergies over the next two years.
For more information see full research report 06 Dec 2017.
Important Disclaimer - This may affect your legal rights: Because this document has been prepared without consideration of any specific client's financial situation, particular needs and investmentobjectives, a Bell Potter Securities Limited investment adviser (or the financial services licensee, or the proper authority of such licensee, who has provided you with this report by arrangement withBell Potter Securities Limited) should be consulted before any investment decision is made. While this document is based on the information from sources which are considered reliable, Bell PotterSecurities Limited, its directors, employees and consultants do not represent, warrant or guarantee, expressly or impliedly, that the information contained in this document is complete or accurate.Nor does Bell Potter Securities Limited accept any responsibility to inform you of any matter that subsequently comes to its notice, which may affect any of the information contained in this document.This document is a private communication to clients and is not intended for public circulation or for the use of any third party, without the prior approval of Bell Potter Securities Limited. This is generalinvestment advice only and does not constitute advice to any person.Disclosure of Interest: Bell Potter Securities Limited receives commission from dealing in securities and its authorised representatives, or introducers of business, may directly share in thiscommission. Bell Potter Securities and its associates may hold shares in the companies recommended.
Snapshot
DateMarket Cap.Shares on issue12 Month High12 Month Low
Top 5 Substantial ShareholdersBT Investment Management Limited 16.3%Allan Gray Australia Pty Ltd 10.5%Dimensional Entities 6.0%UBS Group AG and its related bodies corporate 5.0%The Vanguard Group Inc. 5.0%
* Source: Morningstar. This chart shows the spread of recommendations from thosebroker analyst's in Australia with research coverage of this stock.
Principals & DirectorsPrincipals
Company Secretary Ms Julie Hutton
Directors
Mr Robert (Rob) Andrew Murray(Non-ExecutiveDirector,Non-Executive Chairman)Mrs Fiona Elizabeth Balfour(Non-Executive Director)Mr Patrick Newton James Allaway(Non-Executive Director)Ms Anne Bernadette Brennan(Non-Executive Director)Ms Tonianne Dwyer(Non-Executive Director)Ms Helen Elizabeth Craig Nash(Non-Executive Director)Mr Murray Jordan(Non-Executive Director)Mr Jeff Adams(Chief Executive Officer,Executive Director)
To access further Research or for information regarding our recommendations and ratings please seewww.bellpotter.com.au