Endeavour Group has reported a strong half yearly result with sales of $6.3 billion (down 0.3 per cent) and EBIT of $556m, up by 3.2 per cent compared to H1 FY21, driven by an increase in profit margin within the retail segment. Endeavour’s profit for the half-year after income tax was $311 million (up 15.6 per cent).
“Our first six months trading as an independent business has demonstrated the structural resilience of the group. We maintained group sales in line with last year, and improved our profitability significantly. This is a positive result during a period which was heavily impacted by COVID-19. These financial outcomes have been delivered through the hard work and dedication of our team who have responded diligently and flexibly to many COVID-19 related challenges,” said Mr Donohue.
Where on-premise trading suffered – down 26 per cent when compared with pre-COVID times and with only 56 days when all 342 ALH venues were trading – off-premise benefited from people celebrating Christmas at home and the trend to “drink less but drink better,” said CEO, Steven Donohue.
“With on-premise restrictions in place, the retail market remained elevated through the half. We delivered retail sales consistent with the exceptionally strong H1 F21 period. Our retail business profitability also improved considerably in the period,” he said.
Head of Commercial for ALH, Mr Mario Volpe, has been appointed the new Managing Director of ALH and he will commence in the new role next week. His appointment follows Mr Bruce Mathieson Jr’s resignation last October.
Hotels’ EBIT of $121m was in line with the same period as last year and Endeavour acquired three new hotels in the half just gone: Terrey Hills Tavern in Sydney, The Manly Hotel in Brisbane and the Commercial Hotel in Charters Towers.
Mr Donohue said, “Our hotels business was particularly hard hit in H1 F22. There were multiple and extensive COVID-19 impacts in the first quarter, including lockdowns in the key markets of Victoria and New South Wales.
“We have however continued to invest in our Hotels, retained core team members, deployed new digital services and created COVIDSafe environments; all of which enabled the business to rebound strongly during periods when COVID-19 impacts abated.”
However, Mr Donohue noted that the bounce back was hindered with high levels of community infection as Omicron spread over the summer period, leading to reduced patronage in hotels and impacting the gains that had been hoped for in the first six weeks of the second half.
Mr Donohue predicts that online sales of $603m – an increase of 24.3 per cent – puts the company on track for $1 billion in online sales this financial year. Online sales account for 10.7 per cent of Endeavour’s sales for the half and Mr Donohue said Endeavour X – the business’ digital arm – had invested $35m to improve the online customer experience and the personalisation of its digital channels as consumers continue to research online before buying in-store.
My Dan’s membership base reached 6.2m at the end of December, an increase of 21.6 per cent on the year prior.
Mr Donohue also said that Pinnacle Drinks was growing at a rate ahead of the rest of the business, launching 325 products this half, including the successful partnership with Better Beer. He said that one third of Dan Murphy and BWS seltzer sales are from Pinnacle Drinks’ own brands.
Pinnacle is designed to respond quickly and efficiently to Endeavour’s bank of consumer data so that it can see the early tendencies in trends and consumer demand and “jump in and act on data” quickly. “Rapid NPD” is how Mr Donohue described it.
An interim dividend of 12.5 cents per share – with an expected total payment of $224 million to the Group’s shareholders – will be paid on 28 March.
