Endeavour Group reported a 14.8% decline in underlying net profit after tax to $363 million for fiscal 2026, despite a 1.3% increase in group sales to $12.2 billion. The company’s shares fell 4.87% to $3.25 on Monday, trading near the lower end of its 52-week range between $2.77 and $4.24.
Underlying earnings before interest and tax (EBIT) dropped 8.7% to $845 million, while statutory net profit plunged 87.8% to $52 million after $311 million in significant items. Operating cash flow decreased to $933 million from $1.2 billion in fiscal 2025, with the cash realization ratio declining to 93% from 110%. Net debt rose to $1.9 billion, and the underlying leverage ratio increased to 1.9 times from 1.6 times.
The retail division, encompassing Dan Murphy’s and BWS, saw sales grow 0.7% to $10 billion but underlying EBIT fell 17.6% to $464 million. EBIT margin contracted by 103 basis points to 4.6%, and return on funds employed dropped 210 basis points to 10.2%. Dan Murphy’s online sales surged 45% year-over-year, supported by six net new stores and 17 renewals. BWS reported 10% online sales growth, with monthly active app users reaching 730,000, up 15%, alongside seven net new stores and 65 renewals.
The hotels division outperformed, with sales rising 4.2% to $2.2 billion and underlying EBIT increasing 4.1% to $462 million. EBIT margin remained stable at 21.0%, while return on funds employed improved 49 basis points to 10.6%. Revenue growth was led by accommodation at 9.3%, followed by bar at 5.0%, gaming at 4.4%, and food at 2.6%. The division completed 38 hotel renewals, including 25 whole-of-venue repositioning projects, and installed approximately 2,000 new electronic gaming machines, with 1,200 added in the second half. The Pub+ loyalty program reached 750,000 active members, achieving a 32% scan rate in food and beverage transactions.
Endeavour outlined a $300 million cost reduction program targeting completion by fiscal 2029, with $100 million earmarked for fiscal 2027, split between $85 million in retail and $15 million in hotels. Capital expenditure rose to $448 million in fiscal 2026 from $394 million in the prior year, with $160 million allocated to retail and $256 million to hotels. Fiscal 2027 CapEx is projected to increase to between $550 million and $650 million, while the One Endeavour technology separation program is expected to require $125 million to $145 million in spending.
Dividends were reduced to 12.0 cents per share from 18.8 cents in fiscal 2025.
