Endeavour Group released its F24 half-year results, highlighting the group’s stability during periods of economic fluctuation.
In H1 of F24, Endeavour Group sales grew by 2.5 per cent to $6.7bn, with EBIT increasing to $661m. These results were put down to Dan Murphy’s and BWS driving increased sales; an increase in food and beverage quality driving hotel sales; and a focus on cost optimisation, including $53m in savings from the endeavourGo program.
Addressing investors, Endeavour Group managing director and CEO, Steve Donohue, said the results showed the group’s businesses had remained stable throughout a period of real fluctuations in consumer spending.
“We view [it] as a resilient performance, particularly given the changing nature of pressure on customers and the impacts of inflation on all operations. In a half where demand became more variable the team delivered sales growth across both the retail and hotel segments. Our focus on delivering value to customers across all of our businesses drove outside performance in key events such as cyber week, Christmas and New Year’s Eve.”
Hotels
“Across Australia, people continued to enjoy our hotels, particularly during the festive season, where our value offerings resonated strongly with customers in today’s higher cost-of-living environment. Hotel sales grew by 2.7 per cent, driven by our improved food and beverage offers tailored to local communities, a strong performance at key social events and a record Christmas. We continue to optimise our existing portfolio, with no hotel acquisitions in the half,” stated Donohue.
EBITDA for the ALH Hotels portfolio grew ahead of sales, up 3.9 per cent, with EBIT impacted by hotels lease inflation and the annualisation of lease costs from new hotels acquired in the prior financial year, as well as the amortisation of Victorian gaming entitlements which were renewed in August 2022.
Updating investors on the new growth strategy for ALH Hotels announced in December, Donohue said it was full steam ahead.
“We’re making progress on the strategic priorities outlined at our Investor Day in December, including accelerating plans to unlock value for shareholders from our significant freehold property assets which are valued at over $1 billion, through portfolio renewal, development and sale opportunities.”
In H1, ALH Hotels also launched a team member trial of pub+, its app-enabled program that offers guests personalisation, convenience and value. The group is preparing to roll this out to customers nationally before the end of F24.
With the priority on optimising existing assets within the hotel portfolio, 15 renewals were completed in the half. No new pub assets were added to the portfolio, and the leasehold for the Captain Stirling Hotel in WA was discontinued in December.
The Rye Hotel acquisition in Victoria’s Mornington Peninsula is expected to be finalised in March, as well as that of an accommodation property in Tasmania.
Retail
Endeavour Group’s retail segment delivered sales growth of 2.5 per cent for the half, including an increase of 2.9 per cent from Dan Murphys and BWS, with a particularly strong performance across the key retail sales events of Cyber Week and the Christmas period. Ecommerce sales grew from 6.2 per cent to 9.2 per cent of total retail sales.
Endeavour Group cited its focus focus on maintaining price leadership and delivering value in continuing to attract customers to the brands.
“Dan Murphy’s strengthened its position as Australia’s preferred drinks destination for events through the festive season, with customers continuing to respond to our great range and Lowest Liquor Price Guarantee. We also opened four new large format stores in the half, taking our popular offer to even more customers. We continue to report market-leading customer metrics and our My Dan’s membership program now has 5.4 million active members, with record high customer engagement,” stated Donohue.
“BWS performed strongly through the half, with engagement with the younger adult demographic benefiting from the launch of our new brand campaign and innovation in our stores. We reinforced value for customers through BWS’ ‘A Win’s a Win’ campaign, and expanded our online shopping reach with a range of new delivery options. With 1,447 stores servicing communities around the country, including 12 net new stores opened in the half, BWS offers Australia’s most convenient liquor store network.”
During H1, Endeavour Group’s retail network grew to 1,718 stores, with the addition of 12 net new BWS stores, four new Dan Murphy’s stores and one ‘The Cellar by Dan Murphys concept store.