Metcash stated it will not be paying a final dividend for the 2014/15 financial year and plans to suspend dividends the following year also.
The writedown includes an impairment of $507 million relating to intangible assets (including $442 million in goodwill), and a further $133 million relating to other assets and obligations.
“While we are making progress with the Group’s strategic priorities, the Food and Grocery Pillar is operating in an increasingly competitive environment,” said Metcash CEO Ian Morrice.
Metcash is conducting a $480 million overhaul to enable the company to better compete in the retail market and to improve the quality of stores.
Metcash stated it will be taking a “number of steps” to respond to the difficult trading environment including a potential IPO of its automotive businesses which include Autobarn, Autopro and Midas.
“We have completed the first year of our transformation plan and these capital management initiatives will provide a foundation from which the Group will continue to deliver the priorities in our strategic plan,” said Morrice.
Shares in Metcash have gone down $1.17, marking a 14 year low for the company.
Metcash reported their Underlying Earnings Before Interests and Taxes (EBIT) for the 2015 fiscal year will be between $315 million to $330 million.
Metcash will report its full year results on 15 June 2015.
