The Endeavour Group has delivered its first results since its separation from the Woolworths Group and has reported a strong result with $11.6bn in group sales, up 9.3 per cent.

The result also saw group EBIT of $899m, up 22.1 per cent and group NPAT of $445m, which Managing Director and CEO Steve Donohue described as a “solid financial result”.

He said: “I am pleased to share our first preliminary results announcement as Endeavour Group, an independent listed business. F21 has been an eventful year for the Group. The creation of Endeavour Group and subsequent demerger from Woolworths Group was a significant undertaking and we are now proudly trading on the ASX as Australia’s leading drinks and hospitality business.

“With 1,643 retail stores, 339 hotels, digital assets that attract up to 18 million visits per month and a high quality portfolio of our own brands, we are excited about how we combine these elements to achieve our purpose of ‘Creating a more sociable future together’.

“The year was also characterised by the disruption of COVID-19 which had a material impact across our business. We had 169 days with one or more of our hotels closed, 83 exposure sites and over 3000 team members impacted by these closures. I’m proud of the way the team demonstrated agility and resilience over this period which not only enabled us to constantly optimise our operations but also raised the bar in terms of innovation and remaining connected to our communities.”

On the retail side of the business, sales totalled $10.2bn, up 9.6 per cent, while EBIT grew 17.6 per cent to $669m.

The group said: “All major categories of drinks were in growth in F21. The trend towards spirits continued, with this category growing at over 20 per cent in F21 following similarly strong growth in F20. The ongoing shift to premium products was also seen across many categories. There was particularly strong growth in craft beer, Champagne and gin, as well as no-alcohol and low-alcohol alternatives.”

Endeavour made targeted investments through he year aimed at improved digital customer experience, which included personalising the My Dan’s loyalty offer and improving online fulfilment through both pick-up and delivery. This saw Endeavour’s online sales grow 34.7 per cent in F21, with online now accounting for 8.4 per cent of total retail sales, up from 6.9 per cent the previous year.

The store network was expanded during the year and at the end of the financial year, there were 251 Dan Murphy’s stores and 1392 BWS stores in Australia, representing a net increase of 33 stores during F21.

Despite these COVID challenges for hotels, sales were up 7.3 per cent to $1.4bn, while EBIT grew by 49.1 per cent to $261m with COVID-19 having significant impacts on both the current and prior year results.

The group said: “Given the challenges presented by COVID-19, the quality of the result is a testament to the resilience of the business and the agility and commitment of the Hotels team. Once restrictions were lifted in each market, strong trading conditions quickly resumed as customers returned to hotels.”

During F21, Endeavour Group invested in 26 hotel renewals and five hotel acquisitions. The Hotels business also took the opportunity to upgrade a significant portion of its electronic gaming machine fleet, bringing down average fleet age, and to roll out new technology led innovation like facial recognition to facilitate self exclusion, Ticket In Ticket Out (TITO) technology to enable cashless gaming and contactless order-and-pay through me&u.

Looking ahead Donohue said: “The strength of this year’s result has demonstrated the resilience of our business model and the commitment of our team to living our purpose and values and delivering for their customers and communities. We are excited that we are entering the new year with a robust balance sheet and a significant number of opportunities to create value, including growing our digital engagement, expanding and enhancing our network and optimising our business through a focus on profitability and capital management.

“We remain committed to maintaining the efforts that saw us deliver positive outcomes for our stakeholders in F21. The recent COVID-19 trading restrictions, which began in June, make it extremely difficult for us to forecast with any degree of certainty how our businesses will perform over the next 12 months.

“We do know that our teams will continue to adjust and respond to the changing conditions and we will continue to innovate and build for the future beyond COVID-19. We look forward to keeping you updated as we progress on the journey.”

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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