The first restriction free festive season in three years was a boon for Endeavour Group, with Dan Murphy’s and BWS recording the highest seasonal sales on record.
Endeavour Group managing director and CEO Steve Donohue called it a “standout December” with a 2.6 per cent increase in group sales to $6.5 billion showing a “stabilisation of its core markets post pandemic”.
Snapshot
- Group EBIT: $644m, up 15.8% on pcp;
- Group NPAT: $364m, up 17% on pcp; and
- Group sales: $6.5bn, up 2.6% on pcp
Donohue said the 2.6 per cent increase on group sales to $6.5 billion showed a stabilisation of its core markets post pandemic.
“Pleasingly, our H1 EBIT result of $644 million was 15.8 per cent higher versus prior period, reflecting both the return of Hotels to full operation and our careful management of the deleverage impacts of lower Retail sales as we cycle Covid-19 driven peaks,” he said.
In the investor call, Donohue said Australia’s are “inherently social. I think sociability is absolutely recession-proof”.
“Our unique network of brands and partners put us at the heart of social occasions, particularly over the festive period. December saw customers return to more normal holiday activities and a full social calendar.
“Domestic travel has returned to regional and coastal towns, with stores and hotels in these areas performing strongly.
“With our physical and online network, and our digital capabilities, we were able to continue to deliver true omnichannel experiences, from new gifting services, to click and collect, electronic shelf labels and image search functionality in apps, and in Hotels via the growth of order and pay at table.”
“We continue to focus on meeting customer demand for drinks discovery: a strong new product pipeline and our extensive selection of premium and craft options has contributed to our overall earnings,” he said
Endeavour owns 262 Dan Murphy’s outlets, 1434 BWS stores and 349 hotels, which house more than 12,000 poker machines between them.
Retail business highlights
- 4.9 million My Dan’s active members in the half, up 9% on last year;
- trialled new and localised retail store formats;
- network expanded with 21 net new stores;
- grew the Paragon Wine Estates portfolio with the acquisition of the Shingleback Wines brand and an agreement to acquire Cape Mentelle;
- launched MixIn – a Retail Media business, supporting our suppliers and partners to better communicate and engage with customers;
- 1339 new lines added to our stores over the last 6 months, supporting continued product innovation and trend leadership (e.g., pre-mix spirit Suntory-196 and schochu);
- partnership with Orora, to create a new lightweight wine bottle product. It is 420 grams which is 195 grams lighter than the existing options.
- the pick-up mix (versus delivery) increased to 60.2% in Dan Murphy’s H1 F22 53.4%;
- online channel remains profitable and well ahead of pre Covid levels. Over a three-year period total Retail online sales were up 50.6%, which represents a CAGR of 14.6%; and
- My Dan’s active members grew to 4.9 million.
While December was a retail boon, the group’s Retail business dropped 9.3 pe cent in EBIT to $418 million in the 27 weeks to 1 January – linked to the previous December half being boosted by Covid lockdowns and restrictions, and people staying home and ordering online.
The Hotel business was lifted by the opposite effect, with people embracing the opportunity to meet in groups at venues. Its EBIT more than doubled (112 per cent) to $256 million.
That said, Donohue said the potential regulatory changes on gaming machines in New South Wales was “top of mind” for the management team. His position was one of working with legislators for a workable outcome.
He said a trial of digital wallet/cashless gaming trial was starting this week (w/c 13 Feb 2023) at The Crows Nest Hotel on Sydney’s lower North Shore, as well as a continuation of a Facial Recognition began this week and there is an ongoing trial at the pub of Facial Recognition Technology.
Endeavour also announced that Kate Beattie would be promoted from within to become chief financial officer in June, taking over from Shane Gannon.
