Canadian grocer Metro has posted a 20.5% increase in net earnings to C$45.9m (US$28.99m) for its Q3 ended 6 July, compared to C$38.1m year on year.
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Fully diluted net earnings per share (EPS) for the Q3 grew 21.6% to C$0.45.
Net earnings for the first 40 weeks of 2002 reached C$107.8m, up 15.3% on last year’s C$93.5m. Fully diluted net EPS for this period stood at C$1.05, 14.1% increase over the C$0.92 registered for the previous fiscal year.
Company sales increased 3% in the Q3 and 5.6% for the 40-week period to C$1,583m and C$3,930.7m respectively. On a comparable basis, the increase in sales would be 5.8% for the Q3 2002 and 6.8% for the 40-week period excluding the impact of the termination of the supply contract with Alimentation Couche-Tard in Quebec in the Q3 2002. On 8 July 2002, Metro acquired the assets of Grossiste Sue Shang, a grocery distributor serving independent convenience stores in Quebec. The ongoing retail network investment programme and efficient merchandising programs contributed largely to this growth.
During the first 40 weeks of the fiscal year, Metro and its retailers invested C$125.1m (C$50.5m for the Q3) in the retail network for a net expansion of 278,000ft² representing a 3.1% increase in total retail square footage. Major renovations and expansion of 32 stores were completed and 15 stores were opened.
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By GlobalDataIn the Q3, operating income (before financing costs and taxes) rose 15.7% to C$71.6m, representing 4.5% of sales as compared to 4% in 2001. It increased 16.7% during the first three quarters to C$168.1m or 4.3% of sales compared to 3.9% last year. Increased sales, the positive impact of investments in information systems, and centralised purchasing all contributed to these results.
Q3 borrowing costs fell 35.7% to C$0.9m, while the costs for the first 40 weeks of the FY fell 47.8%. Financing costs averaged 3% for the Q3 and 3% for the 40-week period. Long-term debt decreased throughout the FY reaching C$29.1m. The debt to equity ratio at the end of the Q3 stood at 0.05:1.
Q3 tax charges represent an actual tax rate of 35.1% versus 37% for the Q3 2001. The tax rate for the 40 week period was 34.9% versus 33% for the corresponding period or 37.3% without the C$6m tax savings, due mainly to the reduction in the federal tax rate.
Cash flows from operating activities for the Q3 and the 40 week period rose to C$84m and C$193.6m respectively, compared to C$64.2m and C$116.2m for the same periods last year. These increases are due in large part to earnings growth and a reduction in non-cash items of working capital.
On 6 August, Metro’s board of directors declared a quarterly dividend of C$0.055 per Class A subordinate share and Class B share payable 3 September 2002, up 22.2% year on year.
“The company has achieved 47 consecutive quarters of income growth. Its ongoing retail investment programmes and merchandising initiatives point to future growth in the coming quarters”, said Pierre H. Lessard, president and CEO.
