Endeavour Group pubs and bottle shops take $9m hit from floods

Endeavour Group pubs and bottle shops take $9m hit from floods

The iconic Breakfast Creek Hotel in Brisbane was one of Endeavour Group's flooded properties. Photo from March 2 (via Facebook) before a reopening a couple of weeks later.

Increased foot traffic at pubs was unable to offset declining bottle shop sales for Endeavour Group (ASX: EDV) in the third quarter, with the Woolworths Group (ASX: WOW) spin-off also counting the cost of floods for some of its BWS outlets and iconic bars.

Total revenue for the quarter ending on 3 April was down 2.1 per cent year-on-year, albeit this was influenced by the timing of Easter - normally a busy sales period - which fell in the fourth quarter this year.

The group has had to contend with the impact of recent floods and adverse weather across parts of New South Wales and Queensland, which caused roughly $9 million worth of damages.

“Team members from multiple sites have been personally impacted by the severe flooding, and we are offering them additional support, including financial assistance for property damage, providing vouchers for food and offering accommodation for displaced team members and their families at our hotels,” Endeavour CEO and managing director Steve Donohue said.

“The flood events caused extensive damage to a small number of our stores and hotels in the quarter,” added Donohue, who confirmed its customers had raised $800,000 to help communities impacted by the floods via charities.

“Our Dan Murphy’s Lismore store was submerged in the flooding in the first week of March. In addition, 10 of our BWS stores as well as the Breakfast Creek Hotel (Brisbane) and Westower Tavern (Ballina) were significantly impacted.”

Endeavour Group's Westower Tavern in Ballina was significantly impacted by floods and needed a clean-up, but has since re-opened. Photo from 14 March, via Facebook.
Endeavour Group's Westower Tavern in Ballina was significantly impacted by floods and needed a clean-up, but has since re-opened. Photo from 14 March, via Facebook.

 

The Dan Murphy's and BWS owner had reopened most of its impacted sites by the start of April, but five stores and one hotel remained entirely or partially closed at the end of Q3. With the insurance claim underway, the group’s EBIT was impacted by direct costs from the floods, including clean-up costs and asset write-offs and an estimate of lost profits when stores and hotels were unable to operate.

Retail online sales increased by 16.8 per cent to $222 million during Q3, which is equivalent to 9.6 per cent of retail sales. Investment in the company’s digital platforms and engagement has seen continued growth, and there are now 1,411 BWS stores and 258 Dan Murphy outlets throughout Australia.

The group’s hotel portfolio performance was the highlight over the period, with Donohue confirming accommodations were almost at the same level as before the pandemic.  

The business delivered $405 million in total sales in Q3, up 3.8 per cent from the prior year, as momentum increased with the easing of COVID restrictions in News South Wales and Victoria.

“These results are once again delivered within the context of an uncertain operating environment with extreme weather events, ongoing supply chain disruptions and growing inflationary pressures creating new challenges,” Donohue said.

“COVID-19 continued to impact our operations. This was particularly evident at the beginning of the quarter, when consumer hesitancy reduced patronage in our hotels, while team availability was a challenge in both businesses.”

The group added two new hotels during the period, The Empire Hotel and The Grand Tasman Hotel, both in South Australia, bringing the total number of hotels in the portfolio to 344.

Donohue mentioned the gaming market performance has seen some growth over the period but was at odds to maintain that although it is performing well, it wasn’t the leading growth sector in the hotel portfolio. The business has concentrated on improving the environment of the gaming rooms and reducing the average age of the machines during the period.

Shares in EDV are down 2.54 per cent to $7.68 per share at 12.40am AEST.

Enjoyed this article?

Don't miss out on the knowledge and insights to be gained from our daily news and features.

Subscribe today to unlock unlimited access to in-depth business coverage, expert analysis, and exclusive content across all devices.

Support independent journalism and stay informed with stories that matter to you.

Subscribe now and get 50% off your first year!

SMEs urged to consider business insurance to mitigate financial risks
Partner Content
A single “bad luck” incident could cause financial disaster for many Australian sma...
Advertisement

Related Stories

Sydney open banking app Waave snapped up by UK fintech Banked

Sydney open banking app Waave snapped up by UK fintech Banked

More than a year after securing $4.7 million in a seed funding roun...

Dubber launches $25m raise to power recovery under new CEO

Dubber launches $25m raise to power recovery under new CEO

With a new boss at the helm, software company Dubber (ASX: DUB) is ...

Appen returns to underlying profitability, rattles the tin for $50m to fund GenAI opportunities

Appen returns to underlying profitability, rattles the tin for $50m to fund GenAI opportunities

After pulling itself up by the bootstraps when a major contract fel...

SLMC Property Australia purchases Sydney CBD office tower for $196.4m

SLMC Property Australia purchases Sydney CBD office tower for $196.4m

A 27-storey office building located in the heart of Sydney’s ...