Bill Wavish outlines his Endeavour fix-it plan to investors
Bill Wavish has outlined his “fix-it” plan to shareholders for getting Endeavour Group back on track and recovering some of the $5.6 billion of market value lost by the pubs and liquor business over the past year to “pet projects” and diminished confidence in its strategy.
The former chairman of Myer and Dick Smith set out his agenda in a 22-page slide deck sent to fund managers on Monday. It proposed a two-phased strategy beginning with a review of the Dan Murphy’s chain, which would be led by the board, in tandem with a probe of the financial accounts, including a focus on costs, staffing and rostering.
Phase two entails drafting a plan for the business’s 354 hotels; a review of Pinnacle Drinks; the wineries strategy; and a plan for the BWS liquor chain, according to the presentation.
Bruce Mathieson (above) is backing Bill Wavish to join the board at Endeavour Group. Arsineh Houspian
The $9.4 billion Endeavour was spun out of Woolworths in 2021 as a standalone listed company. Woolworths remains a large shareholder at 9.1 per cent.
Mr Wavish, who is best known as the right-hand man to former Woolworths chief executive Roger Corbett, in September raised concerns about how Endeavour’s liquor store brands were trading. Endeavour’s biggest shareholder, Bruce Mathieson, who controls about 15 per cent, is a backer of Mr Wavish, as is Mr Corbett, setting up a bitter proxy fight.
AustralianSuper, which plans to meet with Mr Wavish’s camp this week, is the third-biggest investor. AustralianSuper has already met with Endeavour’s chairman and CEO. Woolworths is understood to have held preliminary talks with Mr Wavish, but no meeting has been set with new chairman Scott Perkins.
Woolworths so far has remained silent over the public hostilities. But the nation’s largest supermarket chain is more than a large shareholder; it helped set the Endeavour strategy and also established the board, nominating Peter Hearl as inaugural chairman. Mr Hearl remains at the helm of the board.
‘Struggling to find its feet’
Endeavour’s retail business operates 1701 stores across the country under key brands Dan Murphy’s and BWS, along with Jimmy Brings, Langton’s and Shorty’s Liquor. Pinnacle Drinks produces and distributes exclusive brands. Paragon Wine Estates forms part of Pinnacle and owns Margaret River’s Cape Mentelle and McLaren Vale’s Shingleback Wines which were purchased over the past two years by Endeavour.
Endeavour is also Australia’s largest operator of poker machines.
Some fund managers believe that Endeavour is taking quality cash flows from its liquor business and ploughing the money into higher-risk hotels and the capital-intensive wine businesses. They also think the group’s strategy needs to be better communicated.
Mr Mathieson and Mr Wavish are particularly aggrieved by what they claim is a shifting strategy at the company’s liquor stores, specifically at Dan Murphy’s.
Mr Wavish accused the board of weakened financial oversight and added that the separation from Woolworths is behind plan, with Endeavour “struggling to find its feet as an independent company”.
“The vacuum is being filled with margin-depleting, brand-dilutive pet projects. The unique brand assets of the business are diminishing as complacency/distraction from core focus areas sets in. Repeated compliance breaches regarding underage gambling at Endeavour venues,” the deck reads.
Endeavour last week hired Citi and Jarden to help with the stoush with its biggest shareholder. Luminis Partners and Arnold Bloch Leibler are advising the Mathieson family.
Mr Mathieson is spending millions on an advertising campaign to try to convince the 420,000 shareholders that change is needed. The Wavish camp has created a website “endeavourtodobetter.com” aimed at retail shareholders.
The Endeavour board is opposed to Mr Wavish’s election, which shareholders will vote on at the annual meeting on October 31.
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