At the Endeavour Group Annual General Meeting social connection was the day’s message despite ongoing dissension amongst the ranks triggered by Endeavour Group’s falling share price.
In his address to shareholders at the Endeavour Group Annual General Meeting, Chief Executive Steve Donohue noted it was the first year of operation without pandemic restrictions, but the business continued to navigate an unpredictable market and an evolving regulatory landscape.
Shareholder concerns
Donohue first acknowledged the concerns of investors regarding the Group’s share price performance.
“We have more to do to deliver the performance and shareholder returns that investors expect,” said Donohue.
Although Retail EBIT declined by 1.2% to $658 million, EBIT margin improved by four basis points. Donohue said this was a testament to the strength of their brands and the benefits of strategic investments alongside operational cost control.
“We intend to continue our successful strategy of balancing sales growth and margin management to deliver profitable growth,” Donohue said.
The Hotels segment achieved record sales of $2.0 billion in F23, representing growth of 31.0%, as the business celebrated its first year of uninterrupted operation since the pandemic.
In hotels, the business also saw a 35.9% increase in EBIT to $428 million compared to the prior year.
“We will increase our transparency in relation to the returns we generate from these investments and continue to take inspiration from global operators like Walmart, Costco, Amazon and our former parent Woolworths Group, with the knowledge that underinvesting in digital capabilities is a path to failure in this new, dynamic and connected age,” said Donohue.
“Investments through endeavourX in our digital and loyalty capabilities and the upcoming pub+ app rollout for our Hotels are all examples of our response to these fast-evolving trends.”
Board chaos
Playing out in the background was the board battle involving key shareholder Bruce Mathieson snr, former Woolworths chief Roger Corbett and former Woolworths executive Bill Wavish. The Mathieson party has been vocal in what has become a media circus about its concerns around the falling of Endeavour shares by 25 per cent in the past six months and 40 per cent since August last year.
The hostile attempt to place nominee Bill Wavish on the company board has failed, but it didn’t stop the words flying in the AGM with Corbett calling for the resignation of Chairman Peter Hearl, saying, “You need to go forthwith; I call for your immediate resignation.”
Hearl has made it clear he has no intention of stepping down, while Steve Donohue reiterated his experience for the top job amongst the chaos.
“I’ve spent 30 years in this business. I joined Dan Murphy’s when it comprised just two stores in Melbourne. I worked directly for Mr. Murphy (as we called him) and benefited from his and Tony Leon’s coaching over many years. I was there when Woolworths acquired the business in September 1998, and I now have the privilege of leading Endeavour Group as a standalone business,” said Donohue.
Social connection message
Donohue said that while EDG operates in a complex environment, its purpose of ‘creating a more sociable future together’ remains as relevant and important as ever. In previous shareholder addresses Donohue has expressed the importance of this key pillar because it is ‘the business we are in.’
“As people turn to places and moments of social connection in challenging times, we’ll be there to bring them together. We operate some of the most iconic and loved retail brands in Australia and an ‘impossible to replicate’ network of Hotels across the country – we don’t take any of this for granted, and we’re committed to driving continued performance and shareholder returns as we enter F24,” said Donohue.
The CEO concluded his address by saying that the Group always sets the pace of change, but there was “much more to do.”
F23 Performance details announced at AGM
F23 delivered Group sales up 2.5% on last year, to $11.9 billion, and EBIT up 10.7%, bringing the Group to its first milestone of over $1.0 billion in EBIT.
The Hotels segment achieved record sales of $2.0 billion in F23, representing growth of 31.0%. In hotels, EDG also saw a 35.9% increase in EBIT to $428 million compared to the prior year.
