Metcash dividend FY26 in the backdrop of higher than target payout ratio

Metcash Limited is well positioned to deliver sustained growth and attractive returns across market cycles, supported by its diversified and scaled asset base, strong capabilities, and competitive networks that generate resilient and high-quality cash flows. 

Metcash Limited (ASX: MTS)

Metcash Limited (ASX: MTS), on 22 June 2026, reported its total FY26 fully franked dividend at 18.0 cents per share. The dividend payout ratio stayed above management's target payout ratio of around 70%. The company reported final Dividend of 9.5cps. It also advised that its Dividend Reinvestment Plan (DRP) remains suspended until further notice.

Metcash Limited continued progress was made in expanding the its platform strategy by offering a broader range of products and services to Australian businesses. Strong cash generation was achieved through disciplined cost control, efficient working capital management, and ongoing cost-saving measures. Investment expenditure was moderated through active management of the company.

The company highlighted a statutory revenue of $17.35 billion. Group EBITDA increased by 1.9% to $761.7 million, EBIT declined by 0.8% to $503.7 million and reported Profit After Tax of $279.1 million. Metcash Limited generated operating cash flow of $558 million, providing strong support for capital allocation initiatives and shareholder returns. The company also stated that if surplus capital builds up and attractive reinvestment opportunities are limited, it may consider special dividends and/or share buybacks.

The Foodservice & Convenience segment continued to benefit from its customer growth strategy, supported by approximately $170 million in new contracts, including BP (commenced Jan 26) and Ampol (Jun 26), as well as tobacco distribution agreements with BAT, Philip Morris, and Imperial.
Metcash Limited continues to progress Program Horizon, a significant transformation program intended to replace older technology systems and strengthen operational efficiency and resilience. This includes multiple risks including execution risks, delays, higher than expected costs, operational disruptions, and the potential failure to achieve expected benefits.

The company incurred $17.6 million in Program Horizon-related expenses in FY26. These costs included expenses from resources, accelerated amortisation and write-offs of obsolete software assets, as well as additional software licensing and maintenance.

Geopolitical tensions, including trade disputes, territorial conflicts, and wars, may negatively impact Metcash’s operations and supply chain through delivery disruptions, reduced product availability, lower distribution reliability, and higher freight, fuel, and other operating costs. Metcash aims to manage these risks through forecasting, contingency planning, and maintaining alternative supply sources where possible.

Outlook:

The completion of the accelerated tobacco excise program is expected to have an earnings impact of ~$10m on the Food segment. The Group's cost reduction program remains on schedule, with approximately $25 million in annualized savings expected in FY27, helping strengthen earnings resilience.

(Source: Company Announcements)