Cost of residing pressures apparently have not dented Australia’s love of grog, with the chief of the nation’s greatest liquor retailer saying gross sales stay resilient regardless of inflation and rising rates of interest.
“We’re not seeing down-trading … those that have been buying premium products continue to,” Endeavour Group CEO Steve Donohue advised analysts on Wednesday because the BWS and Dan Murphy’s proprietor introduced its web revenue rose 6.9 per cent in 2022/23.
“The amount of money that people are spending on an individual shop remains the same. Of course, they’re getting slightly less because things cost a little bit more.
“But issues simply proceed to be resilient. We’ll wait and see what occurs by means of the course of the yr forward, however folks proceed to benefit from the easy pleasure of a stupendous drink.”
Endeavour Group said sales at its more than 1700 bottle shops fell 1.8 per cent to $9.9 billion for the 12 months to June 30, but that’s compared to the same period a year earlier when sales were elevated because of COVID-related pub closures.
Sales momentum improved in May and June and has been resilient in the first six weeks of the new financial year, the company said.
Mr Donohue said some liquor categories with the biggest price increases, such as pre-mixed “able to drink” (RTD) cocktails, were still seeing strong sales.
“If you take a look at what is going on on within the premix RTD area in the meanwhile, it’s going sooner and larger than it ever has earlier than, significantly in relation to lemon-flavoured drinks,” he said.
Endeavour Group announced a $529 million profit for the 12 months to June 30, from $495 million in 2021/22, with sales at its 354 hotels up strongly in their first period of unrestricted trading since 2019.
Hotel sales were up 31 per cent to $2 billion, while hotel earnings rose 35.9 per cent to $428 million.
Endeavour Group said it made progress during the year on pub+, a new app for hotel customers set to roll out in the first half of 2024.
It represented a “step change” in both guest engagement and guest experiences, Mr Donohue said.
The company also began using a new activity-based rostering system across its retail network that uses AI and other initiatives to optimise store rosters and keep costs down.
The Dan Murphy’s program called My Dan’s grew to 5.2 million active members, a 15.6 per cent increase.
The company will pay a fully franked final dividend of 7.5 cents per share, taking its total dividends for the year to 21.8 cents per share, up 7.9 per cent from a year earlier.
E&P Capital retail analyst Phillip Kimber said the results were overall a positive for Endeavour Group, but a high effective tax rate of 33.5 per cent in the second half had caused it to miss analysts’ profit estimates.
At 2.54pm AEST, Endeavour Group shares have been down 4.1 per cent to $5.75, on a darkish day for the market.
Source: www.perthnow.com.au
