Endeavour sales miss market expectations as focus switches to returns
Endeavour chief executive Steve Donohue says the hotels and liquor retailing group will wind back the purchase of new pubs and cut investment in its rapid delivery service as it tries to lift shareholder returns.
Mr Donohue made the comments as Endeavour disclosed sales growth across its business of 2.1 per cent in the 14 weeks to October 1. The company operates 354 hotels and the Dan Murphy’s and BWS liquor chains.
Endeavour Group chief executive Steve Donohue is under fire from major shareholder Bruce Mathieson.
The company told investors on Monday that retailing revenues had increased 1.9 per cent in that period to $2.54 billion while hotel revenues had grown 2.8 per cent to $553 million. Despite the growth, both divisions reported sales lower than many brokers had expected in the quarter.
Endeavour has been under pressure from its largest shareholder, billionaire publican Bruce Mathieson, to lift returns and sales. Mr Mathieson is pushing for former Woolworths executive Bill Wavish to be appointed to the board, and for the company to reconsider its retailing strategy. He has also called for Endeavour chairman Peter Hearl to resign.
On Monday, Mr Mathieson said the trading update “once again vindicated my questioning of strategic direction and calls for Hearl to go. Another quarter of revenue not even near to keeping pace with inflation.”
Mr Mathieson said the purchase of wine companies and speciality wine businesses was damaging overall returns. Endeavour owns several wineries including Margaret River’s Cape Mentelle and McLaren Vale’s Shingleback.
“Hearl’s hobbies in the retail business have failed spectacularly, and it’s clear for all to see. Speciality revenue is going backwards and is in absolute free fall,” Mr
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