In his final annual general meeting as the Chief Executive Officer (CEO) of Endeavour Group (EG), Steve Donohue has outlined the company’s priorities for the financial year ahead and beyond.
Donohue addressed shareholders at the AGM and highlighted EG’s performance over the 2024 financial year, which delivered sales and earnings growth and also EG’s first quarter results, which highlighted the impact of cost-of-living pressures on consumer spending.
In looking ahead Donohue said that while the business is facing short-term challenges, the strategy it has in place will position EG well through the economic cycle.
“Whilst the current market is particularly challenging, the underlying dynamics of the retail liquor industry have been consistent over a very long period: stable low-to-mid single digit growth, delivered through both population-driven volume growth and consistent price growth.” Donohue said.
“We are facing a significant cyclical correction after unprecedented growth during COVID.
“In light of the current challenges, it is important that we continue to deliver against our strategy. By focusing on our customers and maintaining price competitiveness and value, we will profitably grow Retail sales above market and maximise returns from our existing assets. And through a combination of operational improvement and disciplined capital deployment we will continue to work towards unlocking the $150m EBIT opportunity that we believe exists in our Hotels business.
“We will also continue delivering on our F26 cumulative optimisation savings target of over $290m, while continuing to simplify our business, investing for growth and safeguarding our licence to operate. This is reflected in our F25 priorities, and in the progress we have made in Q1 against these priorities.
“While we face challenges in the short team, we continue to make progress and remain well positioned to deliver sustainable returns through the cycle.”
EG Chairman, Ari Mervis addressed shareholders in his first AGM, and also highlighted the importance of the strategy to help guide the business through the current economic challenges.
Mervis said: “The Board appreciates the challenges that Endeavour has faced over the past financial year: an unfavourable macroeconomic environment, increasing costs of capital, and continued low levels of consumer confidence as household budgets remain under pressure. But we, like you, recognise that we nonetheless need to improve returns to shareholders and restore shareholder confidence.
“We remain committed to delivering sustainable earnings growth in our core businesses, while driving returns on investment through focus on disciplined capital management, and portfolio optimisation.
“Endeavour has extremely strong business fundamentals. We have an enviable portfolio of leading brands, an unrivalled network and licence portfolio, and a superior understanding of customer trends and tastes, and through collectively harnessing all these all, our team of talented professionals can create meaningful experiences to deliver on our strategy of putting the customer first.
“Our strategy focuses on continuing to optimise the business from end-to-end through maintaining disciplined capital allocation and investing in our team to enable them to live our purpose and values; and ensuring that they can deliver a positive and sustainable imprint, with compliance and responsibility at the core of everything we do.
“Your Board has confidence that the strategic roadmap articulated in December 2023 is focused on driving the most important pillars for future success. Success in Dan Murphyʼs and BWS in retail, and improving performance in our hotel network are critical to future prosperity. The core trading business ably supported by Pinnacle and our digitally enabled customer-relevant propositions will enhance delivery. Going forward we will focus on continually improving execution in our primary businesses, with an emphasis on streamlining and simplifying the business.
“We will continue to ensure that we deliver value, range and convenience through our retail network, and in hotels we will deploy capital to increase returns on this part of the portfolio. As a positive shopper experience is at the heart of every interaction, we will continue to relentlessly focus on in-store execution, relevant choices, digital support and great customer service.
“We will ensure a rigorous focus on cost optimisation in the short and-long term, while progressing our separation from Woolworths and simplifying our technology landscape.
“Our ultimate aim is to deliver long-term shareholder value.”
Mervis also said EG has engaged a global executive recruitment firm to conduct a comprehensive search for a new CEO and that the Board is currently considering a shortlist of credible candidates.
