Endeavour Group’s underlying net profit fell 14.8 per cent to $363 million in preliminary FY26 results, with the drinks retail and hotels group booking $372 million in pre-tax significant items as it puts numbers against the strategy review unveiled in May.
Total group sales for the 52 weeks to 28 June rose 1.3 per cent to $12.2 billion, with retail up 0.7 per cent to $10 billion and hotels the stronger performer, up 4.2 per cent to $2.2 billion. Underlying EBIT fell 8.7 per cent to $845 million.
|
FY26 Snapshot (preliminary, unaudited) |
FY26 |
Change on FY25 |
|
Total group sales |
$12.2b |
up 1.3% |
|
Retail sales |
$10b |
up 0.7% |
|
Hotels sales |
$2.2b |
up 4.2% |
|
Underlying EBIT |
$845m |
down 8.7% |
|
Underlying NPAT |
$363m |
down 14.8% |
|
Significant items (pre-tax) |
$372m |
$311m after tax |
The divisional split shows where the pressure sits. Retail EBIT fell 17.6 per cent to $464 million, while hotels EBIT rose 4.1 per cent to $462 million, leaving the two divisions contributing almost identical earnings despite retail generating more than four times the sales.
The significant items, which are predominantly non-cash at $311 million after tax, follow the strategy review CEO, Jayne Hrdlicka, handed down at the group’s investor day, which axed its winemaking operations and cut the dividend in pursuit of $300 million in cost savings by FY29.
Where the $372 million lands
The largest component is $194 million in portfolio rationalisation and asset impairments. That includes $78 million against Pinnacle, covering winery and vineyard assets reclassified as held-for-sale or for closure and inventory write-downs from range rationalisation, along with the impairment of 25 hotels ($67 million) and 75 retail stores ($45 million), plus $4 million in retail range rationalisation.
A further $80 million covers non-cash write-downs of legacy technology systems, intangibles, and property, plant and equipment no longer in use following the review.
Restructuring and strategy review costs totalled $58 million, including the establishment of a centralised Business Services function, outsourcing of back-office functions, broader support team restructuring, and advisory fees, partly offset by $8 million in gains from property and other asset sales.
The remaining $40 million is a provision for the cessation of the group’s supply chain services contract with Woolworths Group at the Melbourne Liquor Distribution Centre, which Woolworths has decided to close in September 2028. The provision reflects one-off cessation costs Endeavour is contractually required to reimburse.
Hrdlicka said the group had reassessed the carrying value of assets including legacy technology systems, wineries and vineyards, and a small number of retail stores and hotels.
“Following the reset of our asset base and simplification of our portfolio we are now well placed to focus our capital and resources on maximising the value of our core businesses through our multi-year business transformation strategy,” Hrdlicka said.
The result confirms the trajectory flagged at the half, when the group reported weaker earnings as price investment and capital spending stepped up. Final audited results and further detail on trading performance will be provided at the group’s full-year results presentation on 24 August.
