Metcash sells auto business to Burson for $275m after plunging to $384m loss

 In Australia, Metcash/IGA, NewZealand
Food and liquor wholesaler Metcash has reached agreement to sell its automotive business to Burson Group for $275 million, well below the $350 million it hoped to achieve under its original plan for an initial public offer.
The deal, which will raise funds to reduce net debts of about $667 million and invest capital into the core grocery business, was announced as Metcash reported a bottom-line loss of $384.2 million for the 12 months ended April 30, its first loss since 1998.
Underlying earnings before interest and tax fell 16.7 per cent to $325.1 million, slightly ahead of market consensus forecasts of about $322 million and within the company’s $315 million-to-$330 million guidance.
Earnings in food and grocery fell 26.1 per cent to $216.8 million, despite a 1.6 per cent increase in sales to $9.2 billion, as Metcash cut prices and invested in stores to enable its IGA retailers to regain market share lost to Coles, Aldi and Woolworths.  Sydney Morning Herald – Read more…

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