Metcash bolts together hardware brand under Total Tools flag
Metcash is knocking up a new plan to reinvigorate its hardware division, with moves to bring two groups under the one pergola.
The supplier to independent supermarkets such as IGA and Foodland also owns Independent Hardware Group — which includes Mitre 10 and Home Hardware — and Total Tools.
On Tuesday, Metcash announced it would merger the two divisions to create the Total Tools and Hardware Group.
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By continuing you agree to our Terms and Privacy Policy.Independent Hardware Group chief executive Scott Marshall will lead the new combined group while Total Tools boss Richard Murray heads for the exit.
Metcash chief executive Doug Jones said creating one hardware division had been part of the group’s medium to longer-term thinking since its acquisition of Total Tools in 2020.
“The creation of an even stronger and more resilient hardware business now is important, not only in the context of current market conditions, but also for ensuring the business and our independent members and franchisees are ideally positioned to maximise the benefits from the anticipated market improvement,” Mr Jones said.
“Combining the two businesses underpins our commitment to maximise the opportunities for profitable growth in the sector.”
Total Tools has doubled in size since it was snapped up by Metcash but is facing stiffer competition from the like of hardware behemoth Bunnings as it moves into ever-more lucrative traditional big-box retail spaces such as automotive accessories and pet care.
The announcement of the merger was also accompanied by a group-wide trading update.
Metcash said underlying net profit for the year ending April 30 was likely to come in slightly higher than previously forecast at between $273 million and $277m.
The final figures are still being audited but it is estimating earnings before interest and tax of between $504m and $508m.
Just under half of that will come from its food division, while hardware is likely to bring in between $186m and $190m.
Its liquor business — which supplies national brands such as Cellarbrations, The Bottle-O, IGA Liquor, and Porters Liquor — is estimated to add between $102m and $105m.
Metcash shares rose 4 per cent on the update in morning trade to $3.53.
