Metcash Sets DRP Price at $3.87, Confirms Fully Franked 9.5c Dividend

Dividend Update and Context

Metcash Limited (ASX, MTS), a key player in Australia's wholesale distribution sector, has provided an update to its earlier dividend announcement by confirming the Dividend Reinvestment Plan (DRP) price. The company declared an ordinary dividend of 9.5 cents per share, fully franked at the corporate tax rate of 30%, reflecting a commitment to returning value to shareholders for the financial year ending 30 April 2025.

The dividend is scheduled for payment on 27 August 2025, with a record date of 16 July 2025 and an ex-dividend date of 15 July 2025. Notably, no external approvals were required for this dividend distribution, underscoring the company’s confidence in its financial position.

Dividend Reinvestment Plan Details

The update specifically addresses the DRP price, which has been set at AUD 3.87 per share. This price is calculated as the average daily volume weighted average price of Metcash shares traded on the ASX during the pricing period from 21 July to 1 August 2025. Shares issued under the DRP will be newly created and rank equally with existing shares from the issue date of 27 August 2025.

Participation in the DRP is optional for shareholders, with the default option being a cash payment of the dividend if no election is made. The plan is available to shareholders resident in Australia and New Zealand, with no minimum or maximum participation limits, although certain conditions apply to participation that have not been fully detailed in this announcement.

Implications for Investors

This update provides clarity for income-focused investors weighing the choice between cash dividends and reinvestment. The fully franked nature of the dividend enhances its attractiveness by offering tax credits, which can be particularly valuable for Australian shareholders. Meanwhile, the DRP price set close to the current market levels suggests a fair value for reinvestment without a discount, which may influence shareholder participation rates.

Metcash’s steady dividend policy and the option to reinvest dividends through the DRP reflect a balanced approach to capital management, supporting both income generation and shareholder equity growth. However, the announcement stops short of providing guidance on future dividends or the sustainability of this payout level.