This article is from the Australian Property Journal archive
Endeavour Group, the operator of liquor retailers Dan Murphy’s and BWS as well as pubs across Australia, saw its share price fall after posting soft interim numbers, as Australians spent less on alcohol amid cost-of-living challenges and the Woolworths workers strike disrupted supply chains.
It posted a 15.1% year-on-year fall in net profit after tax to $298 million, while group EBIT was down 10% to $595 million.
Earnings per share fell 14.8% to 16.7c and interim dividend per share by 12.6% to 12.5c.
Group sales dipped 0.7% to $6.6 billion, which it said reflected operating deleverage from lower sales and the impact of $13 million of one-off restructuring costs relating to optimisation initiatives including the new Jimmy Brings partnership with Milkrun, the integration of Shorty’s into Dan Murphy’s and support office restructuring.
Retail sales fell by 1.5% to $5.5 billion reflecting subdued consumer spending in Q1, and an estimated $40 million to $50 million in lost sales due to the Woolworths workers strikes that caused chaos with Victorian supply chains and which reduced stock availability in stores during the peak end-of-year trading period.
However, Dan Murphy’s achieved a record sales result for the week preceding Christmas and BWS recorded its best ever sales performance for the week preceding New Year’s Eve.
Hotel sales grew by 3.3% to $1.1 billion with sales momentum increasing throughout the half. Higher sales results were achieved across all four key business drivers of food, bars, gaming and accommodation.
Strong growth in gaming was achieved in Queensland, while food and bars benefited from the successful launch of its pub+ loyalty program as well as strong performances around Father’s Day and Christmas. Accommodation returned strong growth through acquisitions and redevelopments.
Endeavour has a $1 billion-plus property portfolio, which the it said it continues to pursue opportunities to unlock value in. During the half it realised $38 million from asset and business sales as part of its capital recycling program, while mixed use development applications were lodged for sites in Camberwell and Chelsea Heights in Melbourne, with three more applications expected to be lodged in the second half. The five sites have been independently valued at between $100 million and $150 million.
Group gross margin as a percentage of sales increased to 34.9% reflecting improvements in both Retail (by 11 basis points) and Hotels (16 basis points).
A “more tailored approach” to promotional programs during the key cyber sales period saw its retail business deliver its most profitable Black Friday week to date.
Its share price dropped by nearly 6% on the back of the results announcement, and was trading at $4.23 on Friday afternoon.
