Friday November 5 marks the last day of trading of shares in Metro Cash & Carry (Metcash) as such on the JSE Securities Exchange (JSE), following the buyout of the company’s African and South African operations by a consortium of Metcash management, a black empowerment consortium and associates, led by chairperson Carlos dos Santos and financial director Hilton Mer.
Metcash is now left with its 61% stake in its Australasian operations, Metcash Australia, and its name will be changed to Metoz Holdings on the JSE with effect from Monday November 8. These businesses comprise three trading divisions — IGA Distribution, Campbells Cash & Carry and Australian Liquor Marketers.
Although Metcash management has said the company will not delist from the JSE, some analysts feel it is only a matter of time before it does disappear from the exchange, given the focus of its operations in Australia and the existence of a separate listing for Metcash Australia on the Australian Stock Exchange.
Metcash had been built up across the African continent to become the largest wholesale distributor of fast-moving consumer goods on the continent, with extensive wholesale and retail interests.
These interests, which have been the subject of the management buyout, comprise 263 cash-and-carry outlets, 13 conventional distribution operations, 17 hyper stores, 47 liquor outlets and 116 retail stores.
In addition, the group is the second-largest franchiser of retail supermarkets and convenience stores in Southern Africa, with approximately 380 outlets.
Total group turnover for the year to the end of April 2004, announced in June, totalled R51,5-billion, while operating income was R1,2-billion. The Australian operations contributed 69,5% and 75,1%, respectively, to these figures.
Metcash’s African businesses have now been acquired via the management buyout for R1,3-billion in cash, which translates into 71 cents per share before costs and taxes. The company has also been taken private, with a 25,1% black empowerment stake introduced.
By way of payment, Metcash on October 15 implemented a capital distribution to shareholders of 64 cents per share. This was reflected in Metcash’s share price on the JSE, which dropped 71 cents — from 273 cents per share to 202 cents per share — at market open on October 18.
Metcash Australia in May reported strong results for the financial year to the end of April 2004, despite continued fierce competition from the major Australian supermarket chains, notching up a 7% rise in turnover to Aus$7,2-billion (about R35,8-billion) across all three divisions.
Profit before tax rose by 23,5% to Aus$155,7-million, and profit after tax was Aus$101,7-million, representing a 25,1% increase.
The company generated Aus$171-million in cash from operations, an increase of 15,5% from the previous year. It announced a total dividend for the year of Aus$0,11 per share, up from Aus$0,08 in 2003.
Since debuting in its new form on the JSE on October 18 at 202 cents, the Metcash counter has lost 4,5% or nine cents, last quoted at 93 cents on Tuesday.
Conditions remain competitive in the Australian retail sector, putting pressure on company margins. — I-Net Bridge