28 February 2025 – Endeavour Group (ASX: EDV) has delivered a steady first half for FY25, reporting $6.6 billion in sales, broadly in line with the previous year. While consumer spending remains under pressure and supply chain disruptions in Victoria impacted retail sales, strong Christmas trading helped keep revenue stable. The company’s hotels business also performed well, with all key segments—food, bars, gaming, and accommodation—seeing growth.
Financial Snapshot
- Revenue: $6.6 billion (-0.7% YoY)
- EBIT: $595 million (-10% YoY)
- NPAT: $298 million (-15.1% YoY)
- Cash Flow Realisation: 168% (up 28 percentage points YoY)
- Earnings Per Share: 16.7c (-14.8% YoY)
- Interim Dividend: 12.5c per share (-12.6% YoY)
Retail Performance: Navigating Challenges
Retail sales fell slightly by 1.5% to $5.5 billion, reflecting both softer consumer spending and the Victorian supply chain disruptions, which cost the company an estimated $40-50 million in lost sales. Despite these setbacks, December was a standout month, with Dan Murphy’s posting a record sales week before Christmas and BWS achieving its highest-ever sales in the lead-up to New Year’s Eve.
A more targeted promotional strategy helped boost gross margins, with the company reporting its most profitable Black Friday week ever. Meanwhile, cost management remained a priority, with the EndeavourGO program delivering $40 million in savings.
Hotels: A Bright Spot
Endeavour’s hotels business saw sales increase 3.3% to $1.1 billion, with all key revenue drivers in positive territory. Gaming was particularly strong in Queensland, while food and bars benefited from the pub+ loyalty program, which helped drive higher engagement around key social occasions. Accommodation revenue also grew, supported by acquisitions and redevelopments.
Cash Flow and Balance Sheet Strength
Endeavour Group’s strong cash flow generation enabled a $273 million reduction in net debt, bringing the leverage ratio down to 3.2x—comfortably within the company’s target range of 3.0x to 3.5x. Given this financial strength, the board declared a fully franked interim dividend of 12.5 cents per share, representing a payout ratio of 75%.
Strategic Initiatives and Outlook
The company is progressing with its One Endeavour program, designed to separate from Woolworths’ systems and simplify its technology infrastructure. Investments in AI and other digital tools continue to improve cost efficiency and margin expansion.
In terms of sales momentum, the second half of FY25 has started with mixed results—retail sales are down 0.8% so far, while hotel sales are up 4.7%. However, Endeavour expects conditions to improve as inflation moderates, and the company remains focused on price leadership, efficiency gains, and disciplined capital allocation.
For FY25, the company forecasts:
- Capital expenditure: $375-425 million
- Finance costs: $305-315 million
With a strong balance sheet, a growing hotels business, and disciplined cost management, Endeavour Group remains well-positioned to navigate the current economic environment while delivering value to shareholders.
