After a plunge from above $2 per share back in January, some relief is at last in sight for Metcash Limited (ASX: MTS) shareholders:
Shares traded at $1.61 as of the time of writing, up 21% in the past week – including 16% in a single day yesterday – as a result of the half-year results that revealed a lift in revenue and profits as well as a significant reduction in net debt.
Like-for-like sales rose in the Grocery division, but earnings plunged as Metcash was forced to slash prices to compete more effectively with Woolworths Limited (ASX: WOW) and Wesfarmers Ltd (ASX: WES), whose shares have also been sold off this year.
With no plans to reinstate its dividend and intense ongoing competition, it remains to be seen if the recent price strength will last.
