Australia’s biggest pub group will undergo a major, accelerated refurbishment program on 75 of its hotels as parent company Endeavour looks to rebound from a changing market and poor results.
ASX-listed Endeavour (ASX:EDV) broke from majority Woolworths ownership in 2021, equipped with the Dan Murphy’s and BWS liquor store chains, making it the largest liquor retailer in the country, and the ALH portfolio of pubs, currently totalling 350.
On Monday Endeavour CEO Jayne Hrdlicka announced the ambitious renovation plans, projected to cost $130-160 million, and intention to upgrade 1,900 of its national EGM fleet.
Hrdlicka said not doing the works delayed shareholders getting “the sort of returns” expected of the company.
“We have a big opportunity for growth with our pubs, and it requires investment,” said the new CEO.
The program is a doubling of recent efforts, with only 38 of its hotels refurbished in FY26.
The strategy is aiming to “get more patrons into pubs” following lacklustre sales growth in the company’s hotels division and spend down per patron.
To date for FY27 ALH’s revenue is up only 2.2 per cent compared against the same period last year, while overall FY26 saw an annual increase of 4.2 per cent.
This financial year to date sees sales at Dan Murphy’s and BWS up 4.6 per cent, although this has been driven predominantly by temporary discounting. Hrdlicka admitted Endeavour has made considerable effort to determine “which customers BWS is serving and which customers Dan Murphy’s is serving”.
A strategy to turn the company’s profits around and improve long-term revenue growth now centres on increasing the appeal of the pubs, even as cost of living pressures continue and as the company concedes closures will see venues lose market share to other pubs.
Australian Venue Co (AVC), the second-largest pub group in Australia, recently announced revenue up nearly 20 per cent and EBITDA up 27 per cent for FY26, predominantly through foodservice, as it works to attract financially pressured families looking for value options.
Endeavour reported a major decline in annual profit, falling 88 per cent, from $426 million in FY25 to $52 million, slashing its final dividend from 6.3c to 1.2c per share. The fall was largely driven by write-offs; it is currently divesting Oakridge Wines in Victoria and vineyards in South Australia.
The mixed results have had further impact on EDV shares.
After a high of $8.33 in August 2022 the company has seen a steady decline, shedding 66 per cent of its value to reach a low of $2.84 in June of this year. A slight rally has seen EDV close today at $3.11.
