MTS - Metcash Limited

[Dona Ferentes]

wow (probably not the right exclamation)

some aspects are better than the big supermarkets:

.
so hardware must be a frightmare.

"As noted in the Company’s prior trading update (period to 8 Sept 2024), the external market for the Independent Hardware Group (IHG) continued to be very challenging with Trade activity softening even further. It was also noted that retail store margins in IHG were facing pressure due to the impact of lower volumes on fixed costs. Since that update, there has been additional margin pressure in retail stores in September and October, particularly in Trade due to further sales weakness. This weakness in retail store sales has been offset by lower-margin wholesale sales.

"Metcash is responding to the weaker trading conditions in Hardware by implementing additional cost management initiatives and accelerating its strategic initiatives to drive market share gains in both Trade and DIY. Cost initiatives have included a strong focus on all business expenditure, particularly labour, where there has already been a material reduction in hours. The Hardware business remains ideally positioned to capitalise on any increase in market activity levels.

"All the Company’s recent acquisitions are performing as expected and remain on track for delivering targeted synergies."

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"To fall over a cliff once may be regarded as a misfortune; to fall twice looks like carelessness."

 

[finicky]

Weak weekly chart (not showing today's drop).
Watch for prospective candle suggesting possibility of rally?

Support just below 3.50 decisively broken. This (3.50) is also 'point of control', an idea I got from following Murray Dawes vids. Oscillating around that point should take it lower? I'm expecting $3 and then a good chance 2.75 but chart should guide

Interested in picking up a few for a maiden investment, but in this climate only if it gets nice and negative. I value it higher than current price with median ROE around ~15% and higher in recent years, book value $1.39 and screw Goldman's analyst. Does detract that debt is fairly high and it is acquisitive and trying to compete in hardware - we just had one move into our country town and it is competing with a Bunnings 40m drive away.

Not Held

WEEKLY not showing today

 

[Dona Ferentes]

all major retailers doing poorly today, when general market up half a percent.

 

[finicky]

Market Matters afternoon report.
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• Metcash (MTS) -3.33% said their hardware division was struggling, and 1H25 group profit should be in the range of $132-135m, about 7% below current consensus. The stock was sold off prior to todays update following a Goldmans downgrade, which in hindsight, was spot on. Consensus downgrades to flow given consensus for the FY was $300m profit.

 

[finicky]

Market Matters afternoon report

• Metcash (MTS) –2.51% down again today on revised price targets from Citigroup, Macquarie and Jefferies to $3.40, $3.45 and $3.40 respectively. On the positive side, they announced a 5-year contract extension with key client Drakes, a QLD supermarket chain which contributed $222m to MTS sales revenue in FY24.

Not Held

 

[divs4ever]

Market Matters afternoon report

• Metcash (MTS) –2.51% down again today on revised price targets from Citigroup, Macquarie and Jefferies to $3.40, $3.45 and $3.40 respectively. On the positive side, they announced a 5-year contract extension with key client Drakes, a QLD supermarket chain which contributed $222m to MTS sales revenue in FY24.

Not Held

have an order in for extra sub $3 ( where i really wanted to be for the initial re-entry )

from memory this one suffers from long downtrends , tread carefully

( i will try to get it correct this time )

 

[mullokintyre]

MTS half yearly out.
The critical bits :
Group earnings up 6.3%
EBIT flat.
Underlying EPS down 10%
The food part had a 10% increase, but the Liquor and hardware were up 2%, which is less than inflation.
Dividends down from 11 cps to 8.5 cps.
hardly a reason to step in and buy more.
Mick

 

[divs4ever]

MTS half yearly out.
The critical bits :
Group earnings up 6.3%
EBIT flat.
Underlying EPS down 10%
The food part had a 10% increase, but the Liquor and hardware were up 2%, which is less than inflation.
Dividends down from 11 cps to 8.5 cps.
hardly a reason to step in and buy more.
Mick

i disagree

i hold and have a top up order in the market ( from a fortnight ago ) in the $2.8x range

BUT it is only a nibble NOT a large buy

i think the wider economy has more bad news coming and i will get the opportunity to nibble some more , lower

but i have been on the wrong side of this strong before , but will persist here because i sense weakness in WOW ( which i hold 'free-carried' )

 

[finicky]

From Market Matters afternoon report:

• Metcash (MTS) +2.24% rallied after reporting first-half results that were in line with expectations and showed positive growth momentum to start the 2H.

Metcash remains unchanged as a Buy rec from Greg Canavan at fat tail investment advisory.

Not Held

 

[divs4ever]

went the other way from my top up order price

i guess i will have to wait a while longer

 

[qldfrog]

I am out: -19% in 8 month or (30% loss per annum rate);
This was supposed to be a stable entry for my super

 

[divs4ever]

I am out: -19% in 8 month or (30% loss per annum rate);
This was supposed to be a stable entry for my super

i got a hammering in this in my earlier holding ,

stable ? not to me , BUT is relatively diverse in the retail/wholesale space and has room to grow

all that said , some of the various franchises i have shopped at in QLD , are fairly well run ( and that might save MTS , a core of robust franchisees )

but please be careful the big players love COL and WOW ( for better or worse ) this will always be a Cinderella , waiting for the ball invitation

 

[mullokintyre]

I am out: -19% in 8 month or (30% loss per annum rate);
This was supposed to be a stable entry for my super

Stable entry?
methinks the horse has bolted.
mick

 

[qldfrog]

Stable entry?
methinks the horse has bolted.
mick

My english as a foreign language...

 

[finicky]

From Market Matters today

 

[divs4ever]

looks like my top up order will go unfilled then ... sigh

but i did what i could for their liquor sales they have a convenient bottle shop near the IGA store where i stay when in Brisbane , and i pick up a large bottle of Guinness now and then

 

[finicky]

Metcash trades ex its 0.085 dividend today.

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DAILY

 

[qldfrog]

Metcash trades ex its 0.085 dividend today.

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DAILY

View attachment 189307

Anyone else surprised at how bad this shares goes..what they sell is going up 5 to 10% a year, just keeping share of the market should have seen tremendous growth of income.
Imho this us surprisingly bad SP
I do did own

 

[finicky]

@qldfrog don't forget they're not only into grocercies but also liquor and harware.
Market Matters back in October discussed a negative call at that time from a Goldman's analyst which turned out to be on the money saying:

• Increasing use of online ordering/e-commerce and both Woolworths & Coles have a better offering which will increasingly erode IGA’s value proposition.
• Bunnings is winning in Hardware and that trend is unlikely to change due to size and range.
• MTS’s acquisition-led growth strategy will reduce the return on invested capital.

But Metcash's business performance has been improving lately so they say and the share price has been showing some resilience, although has not broken longer term downtrend yet. Both Market Matters and Greg Canavan think there's value there.

Not Held
No plan yet to buy, preferring cash lately

 

[divs4ever]

@qldfrog don't forget they're not only into grocercies but also liquor and harware.
Market Matters back in October discussed a negative call at that time from a Goldman's analyst which turned out to be on the money saying:

• Increasing use of online ordering/e-commerce and both Woolworths & Coles have a better offering which will increasingly erode IGA’s value proposition.
• Bunnings is winning in Hardware and that trend is unlikely to change due to size and range.
• MTS’s acquisition-led growth strategy will reduce the return on invested capital.

But Metcash's business performance has been improving lately so they say and the share price has been showing some resilience, although has not broken longer term downtrend yet. Both Market Matters and Greg Canavan think there's value there.

Not Held
No plan yet to buy, preferring cash lately

got scorched in here previously , but am back again after watching WOW ( i hold 'free-carried' ) , going from stumble to misstep to stumble

will try to nibble in cautiously