Endeavor Group’s online sales rise 25% as hotels hit hard

Endeavor Group reported a slight decline in group sales for the first half of its financial year, but the company saw its online sales, group EBIT and net profit after tax (NPAT) increase compared to the previous corresponding period. .

While retail sales remained strong during the half, Endeavor Group managing director and CEO Steve Donohue said first-quarter hotel closures in Victoria and New South Wales saw the hotel business hit “particularly hard”.

Group sales during the period were $6.33 billion, compared to $6.35 billion in FY21, down 0.3%, while Group EBIT group increased by 3.2% to $556 million and group NPAT increased by 15.6% from $269 million to $311 million. Online sales were particularly strong for the group, up 24.8% to $603 million.

Donohue said: “Our first six months of operation as an independent company have demonstrated the structural resilience of the Group. We kept group sales in line with last year and improved our profitability significantly. This is a positive result in a period strongly impacted by COVID-19. These financial results were achieved through the hard work and dedication of our team who responded diligently and flexibly to many challenges related to COVID-19.

“Our hospitality business was particularly impacted in H1 F22. There were multiple and widespread impacts from COVID-19 in the first quarter, including closures in key Victoria and New South Wales markets. We have however, continued to invest in our hotels, retain core team members, roll out new digital services and create COVID-Safe environments; all of which has enabled the business to rebound strongly during times when the impact of COVID-19 has subsided.

“Unfortunately, the high levels of infection in the community since the emergence of the Omicron variant led to reduced hotel footfall in the period immediately preceding Christmas and impacted the first six weeks of H2 F22.

“With the on-site restrictions in place, the retail market remained strong during the half. We achieved retail sales in line with the exceptionally strong H1 F21 period. The profitability of our Retail business also improved considerably during the period. Retail EBIT increased by 10.0% compared to the same period last year, thanks to the improvement in the gross profit margin and disciplined cost management. »

The retail business achieved sales of $5.7 billion in the first half of F22, slightly behind the exceptionally strong sales of H1 F21 and up 18.4% year on year. EBIT increased by 10.0% to $461 million and the EBIT to sales ratio improved by 79 basis points to 8.1%.

The group said the retail market remained strong in the first four months of the financial year due to the lockdown, but after the easing of COVID-19 restrictions in October, the group said its retail sales had started to normalize as customers returned. places.

During the semester, the group’s retail store network increased by 24 net stores, with 49 store renewals. The group has also started rolling out the Dan Murphy’s 2.0 format, with five stores now operational.

For hospitality, trading was dominated by pandemic concerns and while sales rose 1.9% to $680 million year-on-year, they were down 26% on a two-year basis. (before Covid).

Despite the significant volatility in the operating environment, the gross profit margin remained stable at 84.4%, compared to 84.8% in the previous comparative period.

The total hotel portfolio consisted of 342 hotels (including five managed clubs) at the end of the period and hotel EBIT of $121 million was in line with FY21 EBIT of $122 million.

Looking ahead, the group said: “We are confident that the actions we have taken and the investments we have made in our hotels and stores, in our technology and online offering, and in our Pinnacle business Drinks has provided us with a solid foundation to navigate this next phase of COVID-19 and continue to build a strong and resilient business.

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