ASX 200 rises on Monday

The S&P/ASX 200 Index (ASX:XJO) went higher on Monday. Metcash Limited (ASX:MTS) was the star performer after reporting.

The S&P/ASX 200 Index (ASX: XJO) went up by around 0.6% to 6,675 points today.

Here are some of the highlights from the ASX:

a woman

Metcash Limited (ASX: MTS)

The food, liquor and hardware business reported its FY21 half-year result and revealed that it saw significant growth in sales volumes across all of its pillars.

Metcash reported total revenue increased 12.2% to $7.1 billion. Revenue growth was 12.3% to $8.1 billion when including charge-through sales.

'Food' benefited from the move to 'shop local' and the improved competitiveness of retailers resulted in an increase in both foot traffic and average basket size. Total food sales rose 9.5% to $4.8 billion.

'Liquor' experienced high levels of demand across the retail stores, which more than offset the adverse impact of trading conditions of 'on premise' customers. Total liquor sales went higher by 14.3% to $2 billion.

Finally, hardware experienced elevated demand from DIY customers and a return to growth in trade. Hardware sales increased by 20.6% to $1.3 billion.

Overall, group underlying earnings before interest and tax (EBIT) rose by 30.4% to $203 million. Underlying net profit after tax jumped 43% to $129.6 million. It generated statutory profit after tax of $125.1 million.

Metcash CEO Jeff Adams said: "All pillars performed exceptionally well, adapting quickly to the many challenges associated with COVID-19 while continuing to successfully execute their strategic initiatives and champion the success of our independent retailers."

The Metcash board decided to increase the interim dividend by 33% to 8 cents per share.

In terms of an FY21 trading update, it said that food sales in the first five weeks of the second half of FY21 were up 2.4% (or up 12.1% excluding the 7-Eleven impact) with supermarket sales up 8.4%, excluding tobacco. Liquor sales were up 16.9% in the first five weeks whilst hardware sales went up 25.3%, or 19.2% excluding the Total Tools acquisition.

Metcash was the best performer in the ASX 200, its share price went up around 10%.

Westpac Banking Corp (ASX: WBC)

The big ASX bank announced today the sale of its Pacific businesses. Specifically, it has sold Westpac Fiji and the 89.91% stake in Westpac Bank PNG to Kina Securities Ltd (ASX: KSL) for up to $420 million.

The sale price is made up of $315 million payable at completion and $60 million to be paid six-monthly over the following 18 months for Westpac PNG. The sale price also includes earn-out payments of up to $45 million which are scheduled to occur annually over 24 months following completion and are subject to the business performance of Westpac Fiji.

Westpac expects to report an accounting loss of approximately $230 million for the sale.

Westpac group chief executive, specialist businesses and group strategy, Jason Yetton, said: "We are taking another step in becoming a simpler, stronger bank while ensuring a high standard of banking services is maintained for our Pacific customers as well as providing new opportunities for our people.

"Choosing the right purchaser for our businesses is important to us, our people and the communities we serve. We are pleased our Pacific businesses are being acquired by Kina Bank. Kina is a strong brand in the region and is well positioned with deep local knowledge to continue to help our consumer and business customers succeed."

The Westpac share price was flat whilst the Kina share price jumped 13%.

Afterpay Ltd (ASX: APT)

This morning it was reported by the Australian Financial Review (AFR) that Reserve Bank of Australia (RBA) governor Dr. Philip Lowe gave a strong indication that buy now, pay later (BNPL) operators can continue to tell merchants not to pass their costs onto customers.

He said that "The board's preliminary view is that the BNPL operators in Australia have not yet reached the point where it is clear that the costs arising from the no-surcharge rule outweigh the potential benefits in terms of innovation".

Dr Lowe also commented that the BNPL operators still only make up a small amount of the total consumer payments and there may be downward pressure on merchant costs from competitors.

In reaction to this, the Afterpay share price rose 2%, though it rose to around $97 in early trading.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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