Dan Murphy’s owner gets a boost from its pubs
People returning to the pub from January onwards as pandemic restrictions eased helped push Dan Murphy’s and BWS owner Endeavour Group’s profits up 11.2 per cent in 2021-22, with solid trading continuing in the first seven weeks of this financial year.
Endeavour, which was split off from supermarket chain Woolworths last year had a boom first half in liquor retailing when people stuck at home in Sydney and Melbourne sought out Dan Murphy’s and BWS stores online. The group’s 344 hotels then took over as the main driver of growth in the June half.
Overall, Endeavour generated an 11.2 per cent jump in net profit to $495 million in its first full year as a separate entity. It lifted its final dividend to 7.7¢ from 7¢.
Chief executive Steve Donohue said in the first seven weeks of the new financial year the strong revival in the hotels sector was continuing, while the liquor retailing chains were making solid headway. The company is watching inflationary pressures and labour shortages carefully and says there is still the potential for supply chain disruptions.
For the first seven weeks, retail sales are 12.7 per cent higher than the same comparable period in 2019-20 before the pandemic started, while the hotels business is up 13.4 per cent.
“We expect the retail drinks and hospitality markets will continue to return to normal over the course of FY23,” Mr Donohue said.
For the full year, retail earnings before interest and tax fell 0.4 per cent to $666 million, while EBIT from the hotels division was up 20.7 per cent to $315 million.
“Australians are returning to socialising in hospitality settings, and the trend towards discovering new drinks is continuing,” he said.
There had been strong growth in the sale of spirits, ready-to-drink pre-mixed alcoholic beverages, alcoholic seltzers and a raft of no-alcohol beer and wines.
Dan Murphy’s, with 258 outlets, is the most high-profile of Endeavour Group’s liquor-retailing chains, which also include 1417 BWS liquor outlets. Across the business, a total of 32 new stores were opened.
The Dan Murphy’s business is going through a management change, with Dan Murphy’s managing director Alex Freudmann returning to his native England, and Agnieszka Pfeiffer-Smith to assume the role. She has been Endeavour’s chief strategy officer since April 2020.
Endeavour Group also owns 344 hotels hosting more than 12,400 poker machines. It is the largest owner of poker machines in Australia, and the third-largest gaming operator in Australia after Crown Resorts and The Star.
Woolworths retained a 14.6 per cent stake when Endeavour was listed. The Mathieson family holds a 15.1 per cent stake in Endeavour Group.
Endeavour announced two weeks ago that it had acquired Shingleback Wines in South Australia’s McLaren Vale region. It will be part of Endeavour’s Paragon Wine Estates stable which already includes Oakridge Wines from Victoria’s Yarra Valley, Chapel Hill in the McLaren Vale region in SA, Krondorf in SA’s Barossa Valley and Riddoch in the Coonawarra district in south-east SA. In Tasmania, Endeavour also controls Josef Chromy Wines, and owns Isabel Estate in New Zealand’s Marlborough region.
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How about having some good old fashioned sales Uncle Dans?
