Endeavour Group’s full-year profit tumbles on hefty writedowns linked to turnaround strategy

Dan Murphy’s owner Endeavour expects to report a sharp drop in full-year profit after flagging a $311 million hit associated with boss Jayne Hrdlicka’s restructure of the business.

The nation’s biggest liquor store operator, which also owns the BWS chain and hundreds of pubs across the country, reported a preliminary and unaudited net profit of $363m in the year to June 28.

But once the $311m in charges from asset writedowns and restructuring are included, Endeavour’s profits plummet from $426m in 2025 to just $52m in 2026.

Following a review of the business by Ms Hrdlicka, Endeavour has slashed the value of several assets, including old technology systems, wineries and vineyards, as well as some retail stores and hotels.

Wednesday’s update revealed that of the writedowns, $40m would come from the slated closure of a Melbourne distribution centre and $58m on restructuring and strategy review costs.

Another $80m will flow from the writedown of non-current assets, like old technology systems.

Endeavour said a rationalisation and value adjustment of retail stores and other assets would see a non-cash charge of $194m, which includes a $78m hit from costs associated with putting wineries and vineyards up for sale or closure, as well as clearing stock.

There would be $67m in writedowns coming from 25 hotels and another $45m in 75 liquor stores, as well as $4m in retail range rationalisation.

The former Virgin Australia boss in May first announced her plans to restore growth to Endeavour, which included plans to sell most of its vineyard portfolio — including high-profile assets Chapel Hill and Oakridge — as part of a three-year cost-reduction program that is targeting $300m in savings.

“After a comprehensive review of our portfolio, we have reassessed the carrying value of some of our assets including legacy technology systems, wineries and vineyards and a small number of retail stores and hotels,” Ms Hrdlicka said on Wednesday.

“Following the reset of our asset base and simplification of our portfolio we are now well placed to focus our capital and resources on maximising the value of our core businesses through our multi-year business transformation strategy.”

Group sales for the 2026 financial year rose only 1.3 per cent to $12.2 billion as it wages a pricing war with competitors, like Coles’ Liquorland, and invests in lower prices to lure more shoppers to Dan Murphy’s.

Revenue from Endeavour’s 1700-plus liquor stores grew less than one per cent, with weak sales offset by a 4.2 per cent rise from its pubs business.

RBC Capital Markets analyst Michael Toner said the update was mostly in-line with his expectations.

Earnings in the retail business were marginally softer, which Mr Toner said likely reflected margin pressure, while the hotels division was stronger on higher revenue and market-wide trends for poker machine revenue growth.

Endeavour will release full-year results on August 24.