Endeavor Group and Dan Murphy Win Drinking at Home


Steve Donohue, Managing Director of Endeavor Drinks Eamon Gallagher

The retail liquor business generated a 10% increase in earnings before interest and taxes to $461 million for the six months ended Dec. 31, while hotel EBIT fell 0.8% to $121 million. million, with 40% of hotels closed between July and October. due to pandemic restrictions. Gross margins in the alcohol retail sector increased by 141 percentage points.

Endeavor operates 251 Dan Murphy liquor retail outlets and 1,392 BWS outlets, as well as 342 hotels and clubs, with 12,400 indoor poker machines. The company was spun off from supermarket giant Woolworths and listed as a separate entity on the ASX at the end of June.

This makes it the largest owner of poker machines in Australia and the third largest gaming operator in Australia after Crown Resorts and The Star.

Woolworths still retains a 14.6% stake in Endeavor Group, which also announced on Monday that it has appointed Mario Volpe as managing director of its hotel business.

Barrenjoey analyst Tom Kierath said first-half results “were well above expectations, with retail group margins significantly stronger and industry-wide rebates remaining weak.”

Mr. Donohue said that while the promotional environment in the industry was still quite subdued, it jumped into various pockets with surprising discounts sometimes emerging from rivals. The group would not back down from a fight.

“We’re not going to hand over market share,” he said.

Online sales soared 24.8% to $603 million.

The company is likely to make more acquisitions through its Paragon Wine Estate division, which owns a series of small wine businesses, including Chapel Hill in McLaren Vale in South Australia, Riddoch in the Coonawarra district of South Africa and Oakridge in the Yarra Valley of Victoria. Oakridge’s sales increased 70% after he joined the stable in March. He said the group had gaps in its portfolio on a geographic basis and was considering Tasmania and the Margaret River region of Western Australia.

Mr. Donohue said customers are usually always on the lookout for something new. It also helped profit margins, as the new ranges were launched at a more premium end. He said about 40% of the products carried by liquor chains simply didn’t exist eight years ago.

Endeavor Group positions itself as an improver when it comes to environmental, social and governance issues. It is increasing the amount of non-alcoholic or low-alcohol drinks it stocks on its shelves, as part of a pilot program with the DrinkWise organization, and Mr Donhoue said demand is growing rapidly as people were looking to buy alcohol-free or low-alcohol products. for different occasions, and at full power for other times.

Mr Donohue said the group’s gaming operations had been fairly stable and it had upgraded 838 poker machines, with the average machine age now at 7.9 years from 9.6 years at the start of the year. 2020-21.

“The game was pretty solid,” Mr. Donohue said.


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