MTS +0.24%: Released 1H23 results this morning that were ahead of expectations led by Hardware & Food. They also pointed to a strong start to 2H23 so all seems to be rosy for MTS. Sales of $8.9bn was +7.8% y/y while underlying EBIT of $255.1m was +10.3% y/y, & around 6% ahead of market expectations. The 11.5cps dividend was also a beat. We own Metcash due to 1. Relative valuation trading on 14x forward while yielding 5.5% FF 2. The trend of greater localisation to drive earnings in food & liquor & 3. Their faster-growing hardware division becoming a big influence on the group leading to higher earnings + a greater rate of growth in earnings = justifying a higher multiple on those earnings.
MM remains bullish & long MTS
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