Endeavour Group has delivered its results for the first-half of the 2023 financial year, and it’s a strong performance across the group, as the business continues its recovery from the impacts of COVID-19.
Group sales were up 2.6 per cent on the prior corresponding period (PCP) to $6.5bn, while group EBIT was up 15.8 per cent to $644m and group NPAT was up 17 per cent to $364m.
Managing Director and CEO Steve Donohue said: “Our team has delivered strong results Group-wide, with a standout December from the first restriction-free festive season in three years. H1 Group sales of $6.5 billion were 2.6 per cent higher versus the prior comparative period, demonstrating the stabilisation of our core markets post-pandemic.
“Pleasingly, our H1 EBIT result of $644 million was 15.8 per cent higher versus prior period, reflecting both the return of Hotels to full operation and our careful management of the deleverage impacts of lower Retail sales as we cycle COVID-19 driven peaks. On a three-year 1 comparative basis, both Hotels and Retail sales are trading well ahead with 4.7 per cent and 4.5 per cent CAGRs respectively.
“Our unique network of brands and partners put us at the heart of social occasions, particularly over the festive period. December saw customers return to more normal holiday activities and a full social calendar. Domestic travel has returned to regional and coastal towns, with stores and hotels in these areas performing strongly.”
While the return to restriction-free trading in the on-premise has helped the group overall, there was a decline in retail sales, which had been elevated because of the pandemic. In retail, Endeavour recorded sales of $5.4bn in the first-half of FY23, a decline of 3.7 per cent on the PCP.
The group did report that sales over the festive period were particularly strong, with both BWS and Dan Murphy’s delivering record sales in the weeks leading into Christmas and New Year’s Day. Across retail, sales momentum improved through the half, with comparable sales improving from -7.5 per cent in the first quarter to -2.7 per cent in quarter two.
Over the half Endeavour increased its store network with 17 net new BWS stores and four new Dan Murphy’s stores, with 60 store renewals also completed. This includes trialling new store formats that are tailored to their location and demographic, such as The Cellar by Dan Murphy’s, a luxury retail drinks offer in Lane Cove and the Mount Hawthorn BWS Craft Beer Superstore.
In the hotels business the scale of the pandemic recovery was highlighted on Christmas Day when the ALH portfolio of pubs served over 40,000 meals, the group also said that event bookings in the lead-up to Christmas were particularly strong and the group hosted multiple sold out live entertainment events.
Hotels sales in the first-half of FY23 were $1.1bn, up 55.3 per cent higher than last year which is distorted because that period was severely limited by on-premise restrictions. On a three-year basis, hotels sales were up 14.9 per cent representing a three-year compound annual growth rates of 4.7 per cent.
The hotel renewal program continues with 34 hotels have renewals completed in the half, additionally five hotels were added to the portfolio in the half, with a further three added since the end of the reporting period.
During the half hotels saw 3.1m order and pay at table transactions take place, with the group saying “43 per cent of food sales took place via digital wallets, demonstrating the ongoing and growing preference for cashless experiences in hotels”.
Donohue added: “With our physical and online network, and our digital capabilities, we were able to continue to deliver true omnichannel experiences, from new gifting services, to click and collect, electronic shelf labels and image search functionality in apps, and in hotels via the growth of order and pay at table.
“We continue to focus on meeting customer demand for drinks discovery: a strong new product pipeline and our extensive selection of premium and craft options has contributed to our overall earnings. Our results this half are a credit to the hardworking and passionate team members right across our operations. ”