What: Grocery wholesaler and owner of the IGA-supermarket banner Metcash Limited (ASX: MTS) shares have jumped over 3% in the opening hour of trade today after the company released its full-year results.
So what: Metcash's share price has been languishing near decade lows as investors have become increasingly concerned with the outlook for the group and the competitive pressures from market leaders Woolworths Limited (ASX: WOW) and Coles, owned by Wesfarmers Ltd (ASX: WES).
Today's results release was in-line with guidance issued in March with underlying profit falling 11% to $250 million and underlying earnings per share dropping 13% to 28.3 cents per share.
Management has also provided an update on the outlook for FY 2015 stating that the first six weeks of trading are in line with management expectations, that momentum is building across the group, and that the transformation program is underway and initial results are pleasing.
Now what: Metcash has attracted a number of investors who have considered the stock in value territory. On a day when the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) is up 0.6% and major rival Woolworths' shares have gained 0.5%, the jump in Metcash's share price could suggest investors are increasingly comfortable that the wholesaler has stabilised its business, and that there is potential for underlying earnings growth and share price appreciation from this point forward.
Do you own our #1 dividend paying stock pick?
Importantly for Metcash's shareholders, the board has declared a final dividend of 9 cps, bringing the full year dividend to 18.5 cps; this equates to a fully franked yield of 6.5%.