Advertisement

Metcash hit with $352m impairment in SA

Metcash will be hit with a $352 million impairment charge after one of its customers shunned its new South Australian distribution centre.

Jun 06, 2018, updated Jun 07, 2018
A supplied image of the Drakes distribution centre.

A supplied image of the Drakes distribution centre.

The IGA and Foodland supermarkets supplier says the charge consists of $318 million of goodwill and other intangibles and $34 million of other net assets, but will not impact its debt facilities or ability to undertake capital management initiatives.

Metcash last week flagged a potential $270 million sales hit after Drakes Supermarkets said it would not commit to Metcash beyond the June 2019 end of the parties’ current South Australia agreement.

Last week Drakes announced it had received council planning consent to build a new $80 million distribution centre in Adelaide’s north, which it says will create up to 250 ongoing jobs.

The centre, to be located on a 17-hectare site in Edinburgh North, will create 300 jobs during construction and an additional 120 to 250 ongoing full-time positions once the centre is open in June next year.

Drakes general manager Bob Soang said at the time that the new centre would be “the most advanced independent distribution and logistics centre in the state”.

– with AAP

Advertisement
Copyright © 2024 InDaily.
All rights reserved.