Endeavour Group has released its financial results for the first-half of the 2025 financial year, with performance challenged by the economic conditions as retail fell slightly, while hotel sales increased and the group reporting ‘stable’ sales for the first-half.
Group sales were “broadly in line” with last year’s first-half at $6.6bn, down 0.7 per cent, while group EBIT dropped 10 per cent on the same period last year, down to $595m. This in turn impacted group net profit after tax, which fell by 15.1 per cent to $298m.
Endeavour Group Managing Director and CEO, Steve Donohue, said: “Group EBIT fell by 10 per cent to $595m reflecting operating deleverage from lower sales and the impact of $13m of one-off restructuring costs relating to optimisation initiatives including the new Jimmy Brings partnership with Milkrun, the integration of Shortyʼs into Dan Murphyʼs and support office restructuring.
“The Group delivered operating cash flow of $1bn representing an improved cash realisation rate of 168 per cent. Net debt fell by $273m due to improved working capital as a result of lower inventory and capex reflecting disciplined capital allocation.
“As a result, the Groupʼs leverage ratio decreased to 3.2x, within our target range of 3.0x to 3.5x. In light of the Groupʼs strong cash generation, the Board declared a fully franked interim dividend of 12.5 cents representing a payout ratio of 75 per cent.”
Speaking about category performance, Donohue said: “Retail sales fell by 1.5 per cent to $5.5bn reflecting subdued consumer spending in Q1 and an estimated $40m to $50m in lost sales due to the Victorian supply chain disruption that reduced stock availability in stores during the peak end-of-year trading period.
“Despite this disruption, detailed planning and execution from our team enabled the Group to deliver a strong trading performance in December. Dan Murphyʼs achieved a record sales result for the week preceding Christmas and BWS recorded its best ever sales performance for the week preceding New Yearʼs Eve.
“Hotel sales grew by 3.3 per cent to $1.1bn with sales momentum increasing throughout the half. Pleasingly, higher sales results were achieved across all four key business drivers (food, bars, gaming and accommodation).
“Gaming remains resilient, with strong growth achieved in Queensland. Food and Bars benefited from the successful launch of the pub+ loyalty program as well as strong performance around key social occasions including Fatherʼs Day and Christmas. Accommodation delivered strong growth through acquisitions and redevelopments.”
Looking ahead Donohue said: “Sales growth for the first seven weeks of H2 was -0.8 per cent for Retail and +4.7 per cent for Hotels.
“Retail sales in the first seven weeks have been impacted by ongoing effects of supply chain disruption. Hotel sales have accelerated in Q3. Renewals and upgrades to our EGM fleet are expected to underpin continued growth in Hotels.
“We operate in resilient categories and we expect Retail market conditions to improve as inflation moderates. Our commitment to price and value leadership is expected to drive improved sales momentum in the second half. We are continuing to prioritise operating efficiency and cost savings. Capital discipline will support continued balance sheet strength.”