Metro plans to repurchase up to one million shares; operating results show growth | iNFOnews | Thompson-Okanagan's News Source

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Metro plans to repurchase up to one million shares; operating results show growth

April 24, 2013 - 6:19 AM

MONTREAL - Metro Inc. (TSX:MRU) says it intends to buy back and cancel up to one million of its common shares in private agreements, at prices to be negotiated with the unidentified seller.

At recent market prices, the buyback could cost the company more than $60 million.

Metro shares closed Tuesday at about $66 but Metro says it expects to pay a discounted price.

A share buyback has been anticipated since the national grocery retailer sold about 10 million shares of Alimentation Couche-Tard Inc. (TSX:ATD.B), which operates convenience stores in North America and northern Europe.

Metro announced its share repurchase along with its second-quarter financial results, which included $1.02 per share of adjusted earnings, up 8.5 per cent from last year but a penny short of analyst estimates.

The $100.5 million in adjusted earnings from continuing operations was up about $4 million from the same time last year. Revenue was down 2.6 per cent year-to-year, dropping nearly $70 million to $2.513 billion.

Eric La Flèche, Metro's president and chief executive officer, said in a statement, said the company is pleased with its stronger net earnings in the quarter ended March 16 despite a shift in timing for Christmas.

The company's sales were also affected by the closure of some unprofitable stores in Ontario and lost sales at the company's pharmaceutical division due to difficulties with bringing in a new warehouse management system.

Adjusting for the Christmas shift, same-store sales were flat compared with a year before.

"The competitive environment will remain challenging in the coming quarters and we will continue to execute our customer-focused strategies and exercise good cost control to continue on our growth path," La Flèche said.

Like other domestic retailers, Metro now faces a major new U.S. rival. Target began its expansion into Canada in March starting with a gradual rollout of stores in Ontario, already a battle ground for the grocery industry.

Target is best known for its clothing and general merchandise but, like Walmart, it also sells grocery products. That part of the Target business is being done in partnership with Sobeys Inc., a Nova Scotia-based rival of Metro.

Metro's net income during its fiscal second quarter was $366.8 million or $3.77 per share, including a $266.4-million after-tax gain on the sale of Couche-Tard stock.

The company says its next dividend payment in June will be 25 cents per share, the same as the March payout but up 16.3 per cent from a year earlier.

News from © The Canadian Press, 2013
The Canadian Press

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