Australia's largest pub owner aims to grow hotel earnings before interest and tax by more than $150 million over the next five years as it attempts to see off a protracted boardroom revolt from its biggest shareholder.
Endeavour Group unveiled its plan to increase shareholder value by more than 10 per cent each year from 2025/26 at an investor day in Sydney on Wednesday.
The hotels and alcohol retailer, which also owns Dan Murphy's and BWS, believes operational optimisation and property investment will drive growth at its network of more than 350 hotels across Australia.
"With an unparalleled portfolio of assets, we're excited about the potential to create great guest experiences and generate growth across all aspects of our hotels, from food and beverage to functions, gaming and accommodation," chief executive Steve Donohue said.
Analysts questioned Endeavour's roadmap, given regulatory pressures mean growth is unlikely to come from gaming revenue and fall largely on food and beverage sales.
Chief financial officer Kate Beattie said Endeavour would specifically target the "laggard" 20 per cent of its hotel portfolio with operational optimisation, renewal or redevelopment or divestment.
E&P Capital retail analyst Phillip Kimber said Wednesday's comments would prove attractive for long-term investors.
But in the short term, Endeavour would have to overcome modest sales growth in a rising cost environment, concerns around gaming regulation and major shareholder Bruce Mathieson's campaign for board renewal.
Mr Mathieson, the billionaire pub baron who controls 15 per cent of Endeavour shares, has criticised the company's leadership for its underwhelming performance compared to hospitality rivals like Australian Venue Co.
At the company's annual general meeting, Mr Mathieson failed to elect former Woolworths boss and ally Bill Wavish as a non-executive director in an attempt to gain more control over the board.
Endeavour shares had climbed 2.6 per cent to $5.21 shortly before noon.
