Endeavour Group (EG) has delivered its financial results for FY22, which reflected the industry challenges of the last 12 months with hotel closures creating tailwinds for the retail business and then the effects of restrictions easing in the second half of the financial year.

As a group EG delivered sales of $11.6bn, which was in line with last year, which the group said was “a strong trading result given we were again impacted by a complex and volatile trading environment”.

Group EBIT increased 2.8 per cent to $924m, driven by the partial recovery of the hotels segment and another strong result in retail, which delivered EBIT of $666m, which was also in line with F21. The group’s profit for the year, after income tax, was $495m, up 11.2 per cent on last year.

EG’s hotels business traded for 231 days in the financial year, compared to 195 in FY21, with the majority of the impacts coming in New South Wales and Victoria in the first half of the year.

Despite these challenges hotels recorded total sales of $1.5bn, up from $1.4bn in FY21, with stronger EBIT of $315m, up 20.7 per cent on the previous year.

Trading recovered strongly in the second half of the financial year as COVID-19 restrictions were lifted and sales rebounded, exceeding pre COVID-19 levels, being up 7.3 per cent on the second half of FY19.

Managing Director and CEO, Steve Donohue said: “Australians are returning to socialising in hospitality settings, and the trend towards discovering new drinks is continuing. While we anticipate that the operating environment will remain challenging, I’m confident our team of exceptional people, our customer-focused strategy, and our disciplined approach to financial management will enable us to continue to deliver for our customers, partners, team members and shareholders.”

EG’s retail sales for FY22 were $10.1bn, which were marginally lower than FY21, but were 19.1 per cent higher than FY19, again highlighting the impact the pandemic has had across on- and off-premise trading.

The retail gross profit margin improved 89bps to 23.2 per cent, which EG said was underpinned by “premiumisation higher margin new products and demand for Pinnacle Drinks products, as well as a lower level of promotional activity in the market”.

The group also pointed to spirits and premix as “a highlight” with seltzer performing particularly well, with sales in these categories increase over 40 per cent over the last three years. The group also highlighted the acceleration of low and zero alcohol products, with five of the top 10 fastest growing subcategories being in low and zero alcohol.

Donohue said: “The financial year 2022 was a significant one for Endeavour Group, our first as an independently listed business, and together we delivered strong financial results. Our retail segment had an exceptional first half, and our hotels segment came back strongly in the second half.

“As a Group, sales were in line with last year at $11.6bn and net profit after tax of $495 million was up 11.2 per cent. These achievements were delivered against a backdrop of ongoing impacts from COVID-19, severe weather events, team shortages and a range of supply chain disruptions. Notwithstanding these challenges, the commitment and passion of our team enabled these positive financial outcomes.

“We delivered focused investments in our hotels business, acquiring five new hotels and completing 40 renewals, while also improving our retail drinks network with ongoing renewals and innovative new store formats, as well as 32 net new stores.

“The investment in our digital connections with customers have been accelerated in recent years given COVID-19 restrictions and we emerged from F22 with both record sales and record numbers of customer connections. We were also pleased to welcome Josef Chromy Wines to our Paragon Wine Estates portfolio and we’re proud of the achievements of our Pinnacle Drinks team who won hundreds of awards for quality in the year.”

The total EG store network and pub portfolio comprises 258 Dan Murphy’s stores, 1417 BWS stores, up 7 and 25 respectively, plus 344 hotels, including five managed clubs, with five hotels acquired in the year.

Andy Young

Andy joined Intermedia as Editor of The Shout in 2015, writing news on a daily basis and also writing features for National Liquor News. Now Managing Editor of both The Shout and Bars and Clubs.

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