Endeavour Group Limited (EDV) Earnings Call Transcript & Summary

Ladies and gentlemen, fellow shareholders, good morning. My name is Peter Hearl, and I'm the Chairman of the Board of Endeavor. Before we commence today's meeting, I'd like to introduce Auntie Donna Ingram to deliver the Welcome to Country. Auntie Donna's First Nation family connections are the Wiradjuri of Central West New South Wales, and she was born and raised here in Sydney on Gadigal land. Auntie Donna is proud to be a cultural representative of the local indigenous community in Sydney and has worked in aboriginal affairs, government and community organizations for the last 35 years, predominantly in education. I thank Auntie Donna for making the time to be here with today. Auntie Donna, would you like to come up.

Good morning, everyone. It's my great pleasure to be here today with permission from my Elders, to offer you welcome to country for the Endeavour Group AGM 2023. It gives me pride to represent my community in this important cultural protocol. It shows respect for and recognition to the unique position of aboriginal and Torres Strait Islander people in Australian culture and history. We are gathered on the traditional land of the Gadigal, who are 1 of 29 clans of the Eora Nation, which is bordered by the Hawkesbury, the Georges and then the Napean Rivers. I'm an aboriginal woman who proudly identifies with the Wiradjuri through my family connections from Central West New South Wales. I was born on Gadigal land, and I've had the privilege to live, work and raise my 4 children on this land for most of my life. My family has grown, and I'm now a proud grandmother to Aliya, Elijah, Kalala, [indiscernible], Jake, Jr. Aki and baby Cade recently joined the family. My wish for my grandchildren is to grow up happy and healthy in a safe and inclusive society where they believe that their dreams can come true. I hope that their voices are heard. I acknowledge the Gadigal, their spirits and ancestors, who will always remain with the landmother Earth and I thank them for their ongoing custodianship. I'm also very proud to be part of the older sleeping culture in the world, the aboriginal culture of Australia. We have maintained our carryover and connection to country and culture for over 65,000 years and will continue to do so into the future. We will ensure that our next generations are proud of their heritage. I pay my respects to our elders, both past and present. We must never forget the sacrifices made by our leaders to create a better future for aboriginal people. I did as a reminder and as a tribute to Elders and those who have gone before us to fight for land rights, justice and equity for our communities. We will continue to honor their work and the fight for equality. I extend my respects to Aboriginal and Torres Strait Islander people from all clans and nations who are present this morning. I also recognize our non-aboriginal sisters and brothers from all backgrounds who walk beside us to share good times. I now offer you a warm and sincere welcome to the land of the Gadigal of the Eora Nation, wish you a safe stay on the land and safe travel from the land. I have the same wish for those of you joining online for whichever country that you're viewing. On behalf of my community and the Gadigal, I wish you an interesting and informative day hearing about the successes and challenges of the past year and the priorities of the year ahead to contribute to your purpose of creating a more satiable future together, of helping people get together, making memories and leaving a positive imprint across this not so little island of ours. In closing, we remember that this is, was and always will be aboriginal land. Thanks, everyone. Have a beautiful day.

Thank you, Auntie, Donna, for that Welcome to Country. I, too, acknowledge the Gadigal people and pay my respects to their elders past, present and emerging. I also extend this acknowledgment to any First Nations people who are joining us on the call or in the room today. On behalf of my fellow directors, I welcome all shareholders to Endeavour's Annual General Meeting. As we have a quorum, I declare the 2023 Annual General Meeting open. For those of you who are not able to be here in person, we are pleased that technology allows us to connect with you through our live webcast as well as the online platform and via telephone. Instructions to participate in today's meeting via the online platform and telephone, including how to vote and ask questions are in the virtual meeting online guide available on our website. If you have issues during the meeting, please call Link on 1 (800) 990-363. This number is also in the virtual meeting online guide. Before introducing my colleagues, I will outline the procedures for today's meeting. Only shareholders, proxy holders and corporate representatives may speak and vote during the meeting. All others are welcome as observers. Shareholders submitted a number of questions prior to the meeting. I will endeavor to cover most of the issues raised by shareholders as we proceed. I will introduce each item of business separately and then invite questions and comments. It's my intention to run an orderly meeting and give shareholders a fair opportunity to ask questions and make comments. I ask that these are confined to the business of the meeting. If your question relates to a particular item of business, I will address the question when we come to that item, even if you've submitted your question earlier in the meeting. For specific questions relating to your experience as an Endeavor customer, I ask you speak to one of our customer service representatives at the desk located in the foyer outside of this room. To ensure that all shareholders and proxy holders have an opportunity to comment and ask questions, I will take one comment or question at a time. Please be as concise as possible with your comments and questions. And limit your questions to no more than three per item of business. For each item, I will take questions in the room first, then move to telephone questions. And finally, we'll take online questions. If you are in the room and wish to ask a question, please move to one of the microphones, and one of the registry attendants will introduce you. [Operator Instructions]. I'll endeavor to answer all relevant questions during today's meeting. However, I reserve the right as Chairman to determine that questions on a certain topic have been answered adequately and should no longer be asked. For a discussion on each item of business, valid direct and proxy votes will be displayed on the screen. I will then ask you to vote on the item. You can vote at any time once the poll is open. Shareholders, proxy holders and corporate representatives can vote by marking for, against or abstain on the voting card you are handed upon registration or through the online portal. For those [indiscernible] are for shareholders and proxy holders who may speak and vote. Blue cards are for shareholders who may speak but not vote. All other attendees with a red visitor card or green media card are welcome but may not address the meeting or otherwise participate. As Chairman, I intend to vote all available undirected proxies on and in favor of Items 2, 4, 5 and 6 and against Item 3. The voting exclusions for items 4 and 5 are set out in the notice of meeting. Voting on the resolutions will be conducted by way of poll, which I now declare open. The poll will close 10 minutes following the meeting's completion. Please place your voting card in the poll box as you leave the room or if you're voting online, click the submit vote button to lodge your votes. As the results of the poll will not be available before the meeting closes, they will be released to the ASX later today and on our website. Every effort has been made to ensure the meeting runs smoothly. If we do experience a significant technological issue during the meeting, I will call a short recess of the meeting until we are able to recommence or if we're unable to recommence within a reasonable period of time, I will adjourn the meeting to another day and time. We will provide shareholders with details of the adjournment via the ASX. I'd now like to introduce your board and the Company Secretary. From my far right or your left, we have Rod van Onselen, Joanne Pollard; and our Company Secretary, Taryn Morton. And to my immediate left, and your right, Steve Donohue, our Managing Director and CEO; Duncan Makeig, Anne Brennan, Colin Storrie and Bruce Mathieson Jr. Members of Endeavour's management team are seated in the front two rows. Jamie Gatt from our auditor, Deloitte, is available to respond to any specific questions you may have on the conduct of the audit. The notice of meeting has been distributed, and I will take it as read. The agenda for today's meeting is as follows: Firstly, I will address the meeting. Our CEO, Steve Donohue, will then speak, and after Steve's address, we will proceed with the formal items of business as set out in the notice of meeting. At Endeavour, we're guided by our purpose of creating a more sociable future together and our values, which are: we're real, we're inclusive and we're responsible. Embedded in Endeavour's culture is a commitment to Endeavour for better. The pandemic and post pandemic period has resulted in a volatile market backdrop for our first 2 years as a public company. with the team delivering a solid performance, but we recognize there's much more to do. The Board is conscious of the recent volatility in Endeavour's share price, and we, like you, are disappointed. In this regard, we face an increasing cost of capital with rising interest rates impacting the value of our very significant real estate exposures. As well as lower levels of consumer confidence as household discretionary incomes are put under pressure by those same interest rates, rising petrol prices, utility costs and food inflation. And while we may have achieved strong performance through our first 2 years as a listed company, with more to do, your Board is laser focused on delivering shareholder value through capital discipline and prioritization as well as cost optimization. While we'll never use it as an excuse, the reality is we also face regulatory uncertainty in the gaming sector. And we have been and will continue to work with legislators and regulators to bring clarity, consistency and certainty to investors in the area of gaming regulations. It will also be remiss of me to ignore the significant disruption to the business, our shareholders, our team and customers have suffered from the ongoing Board dispute with Bruce Mathieson Group. I'm sure we'll hear from representatives and affiliates of the Bruce Mathieson Group and other shareholders today. But let me first address a number of items. We are definitely committed to ensuring the Board operates effectively and managing the renewal of the board in a way that ensures the right skills are brought to bear for the benefit of all shareholders. We consider it appropriate that the Bruce Mathieson Group with its current shareholding be represented on the Board and have stated so publicly. While we're focused on our share price performance, we prioritize long-term value creation. Many of the observations of the Bruce Matheson Group and some others are reflected in our strategic focus going forward. including the importance of sales momentum in our retail businesses, cost discipline across the group, lifting capital returns in hotels and more transparency in relation to capital management. However, it's more helpful if this debate can be grounded in fact. While we continue to seek a constructive resolution to the shareholder campaign, we are focused on delivering value for all shareholders. And with this in mind, with this in mind, we believe that while the Bruce Mathieson group should have appropriate representation on the Board, this right does not extend to disproportionate control. While much has been made through this recent campaign regarding the performance of retail, our retail business continues to perform. Most notably, our Q1 F '24 results demonstrate momentum with Dan Murphy's and BWS delivering 2.6% growth, 2.6% growth and the total Retail segment delivering sales growth of 1.9%. We believe that the most significant opportunity to accelerate growth in our portfolio is to drive higher returns on hotels invested capital. To enable greater focus on this opportunity, we will going forward be more explicit in our strategy to specifically focus on hotels and capital optimization. We'll be introducing objective scorecard metrics across each of our strategic pillars. Which we will discuss further at our Investor Day scheduled for November, December, I should say, December 6, I think, in fact. Let me now turn to our F '23 performance. Our teams drove the delivery of a strong result in F '23, our first full year of operating without disruption from the pandemic, demonstrating the resilience and stability of the group. Endeavour continues to lead the market in liquor retail and hotel operations. We have a portfolio of leading brands and businesses with a proven track record of growth and profitability. Notably, this year, we have also achieved our first ever $1 billion EBIT result, up 14% since demerger. This year, the business grew group sales by 2.5% and while growing group earnings before interest and tax by 10.7% when compared to F '22, which is our first full year operating as a demerged entity. We delivered a group profit for the year after tax of $529 million, an increase of over 6.9% on F '22 and operating cash flow of $760 million. We also delivered a total dividend of $0.218 per share, fully franked, up 7.9% on F '22. We've seen a lot of media coverage about business performance, and Steve will cover this in more detail in his address. I'd also like to note though that since demerger, we've been focused on delivering stability and value. We've driven growth in our core businesses through our leading omnichannel customer offers and strong customer engagement with our brands. We've also continued to optimize our retail and hotels network to deliver EBIT growth ahead of sales and invested in our hotels portfolio to position it for growth. However, we are very aware that we have more to do to deliver to our shareholders. We'll continue to drive earnings growth through a balance of sales growth, gross profit margin management and the execution of our cost optimization program. We're particularly focused on deploying capital in line with our strategy to maximize returns across the business. Our vision to become the leading platform enabling social occasions guides our strategy. We deliver strong returns for our shareholders by operating as an interconnected group using our assets, customer understanding and industry partnerships to achieve this vision. Our strategy has 5 pillars: one, creating leading customer offers and brands; two, driving an efficient end-to-end business; three, optimizing capital allocation to accelerate growth; four, delivering a positive and sustainable imprint. And five: and perhaps most importantly, enabling and encouraging our One team to live our purpose and values. We remain laser-focused on our customers and our guests. Our team create meaningful omnichannel experiences, bringing together retail and hotel formats customers love, innovative web and app assets and trend-leading products. We're equally focused on the need to continue optimizing our business end-to-end and accelerating profitable growth. We'll do this through disciplined capital investments, operational optimization and cost control. The One Endeavor technology transformation to transition and simplify our business is underway and will ultimately unlock significant simplification and optimization opportunities for productivity and costs. We're also continually focused on progressing our sustainability ambition with emphasis on responsibility and compliance and ensuring we have the talent and capability to deliver Endeavour's strategic goals. I'll now say a few words on Endeavour's remuneration framework. This framework is designed to align performance with reward. The Board sets targets for both short- and long-term rewards to encourage performance. The Board is confident that the determinations made facilitated the right alignment between performance, reward and stakeholders' interests. Equally, we recognize the need to review this framework to ensure it aligns with lines management's focus with shareholders' expectations. And we will consider appropriate adjustments as we look to F '25. We continue to make considerable progress against our sustainability strategy on our key pillars of community and responsibility, people and planet. While we're pleased with the progress we've made, we recognize that we don't have all the answers as yet. We'll continue to listen, adapt and reflect stakeholder feedback as we mature our approach. Aligned with that approach this year, we've completed our first extensive independent materiality assessment aimed at identifying and prioritizing our most material environmental, social and governance issues and opportunities. This work confirmed that our focus on responsibility and compliance can make the biggest social impact and is the strong foundation we need for the positive imprint we're creating. Of course, over the year, we've had some changes to the Board. Bruce Mathieson Jr. joined the Board in November last year after receiving the required regulatory approvals. In June, we welcomed Rod van Onselen as an independent Non-Executive Director, who brings a wealth of knowledge and experience in digital innovation and technology, business transformation and business growth strategies. Holly Kramer, a nonindependent NID step down from the Board in August. And Colin Storrie, another nonindependent NID will leave us at the end of this calendar year. Both Holly and Colin have made significant contributions to Endeavour since demerger. And in the case of Colin going back to 2018 when he joined the old ALH Board, and subsequently, the pre-demerger Board of Endeavour. We're focused on adhering to the highest standards of corporate governance as we consider board composition and cohesion for the benefit of all Endeavour shareholders. This includes having appropriate diversity, experience and skills and comprising a majority of independent directors. In seeking replacement directors for Holly and Colin, an externally facilitated Non-executive Director search is well underway, and we're currently engaging with prospective candidates. We intend to be in a position to announce the outcomes of our search process in the first quarter of the 2024 calendar year. We're focused on establishing a Board that can operate constructively and collaboratively and provide a level of governance and oversight in the interest of all shareholders and to deliver shareholder value creation. On the day, the direct nominations closed, we received a nomination for Mr. William Bill Wavish, seeking election as a as an independent Non-executive Director. Mr. Wavish declared he meets Endeavour's independence criteria despite being strongly linked to the Bruce Mathieson Group. While Mr. Wavish has rejected our offer for him to participate in the Board renewal process, Endeavour continues to extend that offer to Mr. Wavish. The resolution to elect Mr. Wavish will be voted on later today. And thanks to the effort of our team, particularly our Company Secretary, we've been able to procure all necessary regulatory approvals for Mr. Wavish's appointment from the gaming and liquor regulators where prior approval is required. And that's in the states of South Australia, Western Australia and Victoria. Turning now to Bruce Matheson Jr., who is the current representative of the Bruce Matheson Group on the Board. The Board endorsed Bruce Mathieson Junior's nomination to be put forward to shareholders prior to the release of the notice of meeting and the commencement of the campaign conducted by the Bruce Mathieson Group and Bruce Mathieson Sr. As I said earlier, even if shareholders choose not to support Bruce Junior's election, the Board intends to extend the Board seat to the Bruce Mathieson Group assuming the maintenance of at least their current level of shareholding. The Board remains committed to and recognize the importance of working constructively together and it remains our genuine hope that we can move quickly to resolve the current dispute between the Board, Bruce Mathieson Group and Endeavour. In closing, I'd like to acknowledge and thank you for your continued support of our business and brands and assure you that our focus remains on delivering the best results for our shareholders. Your Board is absolutely committed to working together in the interest of all shareholders. I'd also like to thank Steve and our team of 30,000 dedicated and passionate customer enthusiast or customer [indiscernible] I call it, as we continue to make Endeavour a strong and better business led by our purpose and values. Most importantly, I'd like to thank our customers and the communities of which we're a part and who have supported our journey as we work on creating a more sociable future together. As we look forward, we do face changing and challenging macroeconomic conditions normalizing the higher capital costs and ongoing gradual evolution of our regulatory landscape. The Board and management will continue to focus on supporting our responsibility initiatives, adapting our business plans to meet the evolving market and delivering profitable growth through our compelling offers, disciplined capital investment operational optimization and focused and disciplined cost control. While we still have work to do as a business, we have a clear purpose, a strong commitment to making a positive imprint, a 30,000 strong team of exceptional people, a portfolio of leading brands and a customer-focused strategy. I have no doubt, no doubt that going forward, we are well placed and ready to deliver for all stakeholders and all shareholders. In closing, I thank you for your time and attention, and I look forward to answering your questions shortly. I'll now ask our CEO, Steve Donohue, to address the meeting. Thank you.

Thank you, Peter, and good morning, everyone. I'd also like to acknowledge the traditional owners of the land on which we're meeting today, and pay my respects to elders past, present and emerging. Like Peter, I'd also like to reflect on our F '23, our financial performance, the progress we've made against our strategy, the challenges we faced and our focused on the opportunities ahead to drive operational performance and returns. In F '23, we operated for the first time in 3 years without pandemic-related disruptions. However, we, like other companies, continue to navigate an unpredictable market and an evolving regulatory landscape. Against this operating backdrop, I'm proud of what the Endeavour team has collectively achieved by maintaining momentum in our core businesses while still progressing our strategic initiatives to expand and modernize our customer offers and to separate from the Woolworths Group. However, I also want to be clear that we acknowledge and share the concerns of our investors regarding our share price performance. We clearly have more to do to deliver the performance and shareholder returns that investors expect. The key principles behind successful retail and hospitality businesses are enduring. Deliver your customers a best-in-class offering that meets their need for value and convenience in the most frictionless way, but the demands of customers today are changing very rapidly. Driving change in our business to meet these shifting expectations is critical for all of us in these sectors and can only be delivered by having the best capability, focused on improving customer experiences at a faster rate and more seamlessly and conveniently than ever before. Our investments are Endeavor X, our digital and loyalty capabilities and our upcoming pub+ app rollout for our hotels are all examples of our response to these fast-evolving trends, and our acknowledgment that we must know our customers individually and connect with them in whichever way they would prefer. We will increase our transparency in relation to the returns we generate from these investments and continue to take inspiration from global operators like Walmart, Costco, Amazon and our former parent in the Woolworths Group. With the knowledge that under investing in digital capabilities is a path to failure in this new dynamic and very connected age. I spent 30 years in this business. I joined Dan Murphy's when I comprise just 2 stores in Melbourne. I work directly for Mr. Murphy, as we called him and I benefited from his and Tony Lyons coaching over many years. I was there when Woolworths acquired the business in September 1998, and I now have the privilege of leading Endeavour Group as a stand-alone company. This is a group that's always set the pace of change across the sectors we operate in, but there is much more to do. That said, overall, in F '23, the group delivered a strong result, reflecting our focus on delivering stability and value since the demerger. We've driven profitable growth across our core businesses with group sales up 2.5% on last year to $11.9 billion and EBIT up 10.7%, bringing us to our first milestone of over $1 billion in EBIT. In the Retail business, we generated $9.9 billion in sales, a slight softening of 1.8% from the prior financial year, reflecting the cycling of a strong first half as we normalize from pandemic-driven [ hires ]. Despite macroeconomic factors being more challenging in the second half of the year, sales momentum actually improved with sales increasing by 0.71% in H2, supported by very strong customer metrics. While EBIT -- retail EBIT declined at 1.2% to $658 million, our EBIT margin improved by 4 basis points, a testament to the strength of our brands and the benefits of our strategic investments alongside strict operational cost control. We intend to continue our successful strategy of balancing sales growth and margin management to deliver profitable growth in the future. Our Hotel segment achieved record sales of $2 billion in F '23, representing growth of 31% as we celebrated our first full year of operations since the pandemic. In Hotels, we also saw a 35.9% increase in EBIT to $428 million compared to the prior year. While our sales and EBIT growth was supported by the relaxation of pandemic-related trading restrictions when compared to the first half of the prior year, it also reflects the positive impact of our newly acquired hotels, and the appeal of our hotels to customers looking for great quality and value. Around 50% of our capital expenditures deployed to our hotels business. However, we acknowledge the need to improve the returns generated from these investments. Lifting returns from Hotels is our most significant opportunity and is something we're very focused on. Our F '23 financial performance reflects the strength and stability of our earnings derived from our core businesses, it confirms the customer appeal of our brands, particularly Dan Murphy's and the resilience of our business as we continually navigate change. We delivered that F '23 result by focusing on key priority initiatives across all 5 of our strategic pillars. Our leading customer offers drive growth across our businesses. We've continued to grow customer reach, leveraging our iconic brands and strong capabilities to create compelling offers that cater for all customer occasions and needs. This store is growing, My Dan's membership by 15.6% to 5.2 million active users, growing our BWS app active base to a peak of 400,000 users and reaching 2 million social media followers of our ALH hotels. Additionally, Pinnacle Drinks has contributed to our continued delivery of high-quality and award-winning products at competitive prices, achieving $1.7 billion in retail sales in F '23, backed by 730 innovative Pinnacle owned and exclusive brands. Supporting this, we've made advancements in our digital and omnichannel capabilities that enabled us to better understand and engage with customers at the right place and at the right time. My Dan's continues to lead the market with a 79% scan rate. And our Hotels -- and in our hotels, we now have 343 venues that are equipped with contactless order and pay technology. In September, we launched our new retail media platform Mixing by Endeavor, which uses our significant data sets to provide suppliers the opportunity to better communicate and engage with customers through our media channels. We remain focused on optimizing our business across the value chain. The group's optimization program, endeavourGO has been effective driving sustainable cost out across the business delivering $60 million in cost savings in F '23 as we faced headwinds driven by inflation. We've also invested in step changing our advanced analytics capabilities to drive margins and cost benefits. And progress the One Endeavour technology transformation program to transition and simplify our business as a foundation for future growth. Notably, this year, we've implemented a stand-alone group-wide spend management system and progressed the consolidation of our people systems. We continue to drive growth in our core business through the prioritized deployment of capital. We've invested in improving our market-leading network, executing 122 store renewals and 46 hotel renewals throughout the year, including the rollout of the innovative BWS 4.0 store format. We further expanded our network adding 8 Dan Murphy's stores, 18 net new BWS stores and acquiring 11 new Hotels. We also added to our Paragon Wine Estates portfolio with the acquisition of Shingleback wines in McLaren Vale and Cape Mentelle in Margaret River. As I mentioned, we're reviewing our Hotels portfolio with the aim of lifting our returns on capital deployed in line with our group targets. And we'll update the market in relation to the status of this work at our Investor Day in December, as Peter referenced. And also, as Peter referenced earlier, we'll, our continuous focus on sustainability and team actually underpins everything we do. I'm pleased with the progress we've made against our sustainability commitment across the 3 pillars of responsibility and community, people and planet. Our commitment to responsibility and community goes beyond merely meeting our regulatory obligations. It extends to strengthening our responsibility culture and driving compliance through every part of our operations. This year, we launched Player Protect, an evolution of our approach to responsible service of gambling across our hotels throughout Australia. And separately, through our Darwin Community Advisory Committee, we signed a landmark partnership with Larrakia Nation, signaling our long-term commitment on community issues and supporting positive change in the Darwin Community. On the topic of people, we're pleased with our progress in relation to inclusion and activated our reflect level reconciliation action plan, which focused on enabling team engagement with First Nations peoples in our business and beyond. And finally, on Planet, we've continued to invest in driving efficiencies and innovation as we remain committed to better understand the environmental impacts of our operations to inform our climate change strategy. and action our progress towards decarbonization. In F '24, we expect macroeconomic conditions will continue to be challenging. With heightened inflation, increase in the cost of labor, supply chain, lease and energy costs. As consumers faced continued cost-of-living pressures, we expect that they'll continue to seek out value, which -- while also looking for new opportunities to enjoy new quality products and experiences. So we'll, therefore, stay very focused on delivering our lowest price proposition at Dan Murphy's. Outstanding value, service and convenience at BWS and our unique local offerings across our hotel network. Our Retail and Hotels businesses are well positioned to continue to grow in this environment, and reflecting this, we've seen good momentum in the first quarter of F '24. In retail, we grew sales by 1.9% in the first quarter of the year. And Dan Murphy's and BWS recorded combined sales growth of 2.6%, continuing to be the most preferred brands by customers. Dan Murphy's has the strongest value perception of any liquor retailer in Australia. Due to the lowest liquor price guarantee, it also has the widest range and expert service. Over 600,000 active members joined the My Dan's program in the past 12 months, gaining access to our proactive price beats and reflecting the program's importance as cost of living pressures impact customers. Our Hotels remain well positioned as an affordable destination for social occasions with sales up 2.8% in Q1. Food and Bar sales were particularly strong as customers gathering our venues for major sporting events and for Father's Day. We, along with the rest of Australia celebrated the [ materials ] with the [ materials ] and our hotels actually sold 1.2 kgs of beer every minute during the semifinals and the final in August. We also welcomed 65,000-plus guests on Father's Day. As we look forward, we're maintaining our trading momentum with continued improvements in October and with the all-important months of November and December ahead. But as I said earlier, I do recognize the need to deliver improved shareholder returns, and we remain focused on that too. So to our priorities, we'll continue to connect with our customers through our brands supported by increasingly integrated omnichannel experiences, which drive earnings growth. We'll further improve our existing retail and hotel networks and undertake innovation through examples like the new BWS 4.0 format and concept stores like the seller by Dan Murphy's to provide pathways to future growth. Alongside this, our Pinnacle Drinks business, will remain responsive to fast-changing customer needs and continue to deliver returns on the capital that we invest in it. We always aim to deliver profitable growth that efficiently balances sales, gross margin and cost control. We've committed to delivering at least $200 million in savings between F '24 and F '26 from our endeavourGO or Group Optimization Program. And that's supported by a zero-based approach to our above store and venue costs, optimizing in-store and hotel operations and driving supply chain efficiency. We'll continue to progress the ONE Endeavour technology transformation, transitioning to stand-alone technology capabilities to simplify our business and lay the foundations for future growth. We recognize the need to bring greater transparency to how we plan to optimize capital across the group. In particular, we know we need to enhance the performance of our hotels portfolio and drive improved returns. We're also committed to maintaining a net debt level, net debt at a level, I should say, that supports future growth and shareholder distributions, including by driving a reduction in working capital. We understand that shareholders are seeking more information from us on our strategic plans for F '24 and beyond. And we're looking forward to sharing in more detail our plans for hotels in particular at our planned Investor Day in early December. We will, at that form, also provide greater transparency for investors on the metrics and measures that we use to hold ourselves to account as we deliver our strategy. In particular, as previewed by Peter, we'll be introducing objective scorecard metrics across each of our strategic pillars that will enable us to articulate the shareholders in greater detail exactly what our ambition looks like and how we'll measure performance. The progression of our sustainability and team ambitions, in particular, responsibility and compliance will also remain a key focus for us. We continue to work with governments and regulators to bring clarity, consistency and certainty to the market and to ensure that we're well prepared for any proposed changes to regulations in all jurisdictions. And as always, we remain focused on ensuring we've got the talent and capabilities to deliver on our strategic goals. In closing, while we are operating in a complex environment, our purpose of creating a more sociable future together remains as relevant and as important as ever. As people turn to places and moments of social connection in challenging times, we'll be there to bring them together. We operate some of the most iconic and large retail brands in Australia and an impossible to replicate network of hotels across the country. We don't take any of this for granted. And we're committed to driving performance continued performance and shareholder returns as we enter F '24. To conclude, on behalf of our 30,000 team members around the country and in New Zealand, I'd like to thank all shareholders for their continued support, and I'll now hand back to Peter.

Thank you, Steve. We'll now move to the first formal item of business, which is to discuss the financial report, the director's report and the auditor's report for the year ended June 25, 2023. While there's no resolution on this item, it's important, it's an opportunity for shareholders to ask general questions. I highlight that this is the time for questions on the report, excluding the remuneration report. Which we'll deal with separately, the management and operations of Endeavour generally as well as the conduct of the audit. Prior to taking questions, I'll respond to a number of questions and comments raised by shareholders prior to this meeting. First question we had was, why was the dividend reinvestment plan or DRP announced but not activated in the F '23 final dividend? We understand that the DRP is important to some shareholders. So we've implemented one during the year to activate when appropriate. The Board considers each dividend recommendation carefully as well as all other factors, which may impact the payment of a dividend and the DRP. In August, the Board determined that the DRP would not be activated for the F '23 final dividend. With each dividend, the Board will consider the DRP, and if appropriate, at the time, we'll look to activate it. The second question was that was high on shareholders' mind was what are you doing about the drop in the share price? Well, we all share that pain. As mentioned in my opening address, the Board is very conscious of the recent share price performance, which is driven by one, increasing cost of capital with rising interest rates as well as uncertainty around consumer resilience when household incomes are under pressure. And while it should never be an excuse, there's also uncertainty around the regulatory environment. And upon which we're working to bring clarity, consistency and certainty to investors in the area of gaming regulations. While our first 2 years as a listed company have yielded a strong performance, we know there is much more to do. As a Board, we are focused on long-term value creation for shareholders. We're committed to driving shareholder value by taking a disciplined approach to both capital and operational cost optimization and working collaboratively with regulators and industry. Another question asked was, can you address the performance critique of Bruce Matheson Seniors letter to shareholders and explain Endeavour's next steps? BMG's campaign has used selective and incomplete information in a manner which was designed, in my opinion, to destabilize the Board and management and to exert disproportionate control over the business. Endeavour continues to lead the market in liquor retail and hotels. We've delivered strong growth in F '23, and we achieved our first $1 billion EBIT result. Our focus is on delivering profitable growth through compelling offerings, coupled with disciplined capital management, cost control and cost optimization. Dan's and BWS are powered by our customer-first strategy, enabled by our very strong digital capability, designed to deliver personalized, market-leading omnichannel experiences and loyalty. That said, we know we will always have more to do, and we're getting on and doing it. I now invite you to ask a question or make a comment relevant to this item of business. As I indicated at the commencement of the meeting, I will take questions from those in the room first, followed by the telephone and then those online. For those in the room, if you have a comment or question, please move to the closest microphone. Are there any questions in the room? Please approach a microphone nearest to you.

Chairman, I would like to introduce Julianne Mills as a proxy holder and a shareholder.

Julianne, are you?

Good. Thank you. Thank you, Chair. Julianne Mills from the Australian Shareholders' Association. I just have one question. I actually have more than one question, but one at a time. The death of the 20-year-old employee at Darwin BWS is a tragedy. And while we appreciate that there are ongoing investigations and an ongoing court case, we'd like to know what Endeavor has done since this event to implement a safer workplace for its employees? We acknowledge the voluntary 5% reduction in STI, the CEO and MD of BWS and another executive. We also note that the safety metric is considered in the short-term incentive, and we commend this. However, the metric seems to ignore deaths should and could this be improved is a 0 fatality gateway appropriate. Given that not everyone acts in a predictable way, not everyone acts in a predictable way in these situations, what other measures have you considered to prevent a repeat of this outcome?

Thanks, Julianne, for your question. Well, first of all, I'd like to acknowledge the tragic incident that occurred at the BWS Airport Drive store in the Northern Territory in March of this year. It unfortunately resulted in the loss of a team member Declan Laverty's life. Our Northern Territory community will never be the same. And the memory of it sits heavy on the hearts of every member of Endeavour. Following Declan's tragic death, we immediately moved to commence a full review and investigation of the matter. And not just in that store, but across our whole operations in the Northern Territory. We looked at every measure of safety and security that we took. We found nothing that was systemic in our operations that gave us cause for concern. Unfortunately, our processes were not followed in this particular instance. And I have to say that currently, this matter is before the courts. It's a murder investigation. And I can't comment much more on the specifics of the incident. But I will tell you that we've gone through all of our stores, and we've looked at things like store design, safety and security processes. We've put security guards in all of our BWS stores in the Northern Territory. We've put in -- locked the spirit cabinets, auto lock doors, and we're looking at safe haven areas in our stores. So we're taking as much action as we possibly can. And we're looking at stores outside of the Northern Territory as well to see whether we can enhance the safety and security of our team members and our customers. Thank you for your question.

Thank you. Can I continue? Or would you prefer [indiscernible]?

I think you'd like to share it around, so feel free to come back up.

Chairman, I'd like to introduce Dr. Jonathan Tyler, a shareholder.

John, how are you?

Well, thank you for the opportunity to ask questions. When you talk of misinformation, it's always interesting that it's the people who are against you who give it rather than the people who are for you. Now I'm not suggesting in any way that you've provided misinformation. But with an inflation rate of 6.0% in 2022, '23, a 2.5% increase in sales is actually a 3.5% decrease in sales. Your increase in earnings was similar, but again, a decrease. Your increase in comprehensive income was 0. In fact, comprehensive income in real terms were back 6%. Just to comment. I'm not looking for an answer.

Okay. We'll note your comment. Microphone 2.

Chairman, I would like to introduce Weir Rowan, a shareholder.

Hello. Good morning. I'm Rowan Weir, and I'm a shareholder. And it's more a comment because back to the Hotels, I was just interested on how extensive because I date back to the days when you used to cross the Murray to play the pokies and you're opening them in Margaret River, which is Western Australia and Darwin. So we're mainly are the hotels all spread throughout Australia. Are they still mainly in New South Wales or...

Well, we have 350-odd hotels spread around Australia, and we are actually in all states and territory well, not the [indiscernible]. And most of those outlets or hotels, venues as we call them, a concentrated on the Eastern Seaboard in Queensland, New South Wales and Victoria. We do have, I think, 28-odd hotels in Western Australia, none of which, by the way, have gaming machines in that. They operate without gaming machines, and they operate profitably. And we also have, what half a dozen or so in Tasmania?

That's good. As I say, you were thinking you crossed [indiscernible] and then you're talking.

We're a national operator of hotels. Thank you very much. Be careful.

Mr. Chairman, introducing Ross Blair Holt, proxy holder for BMG.

Thanks, Peter. I represent BMG Group, obviously, with 15%. Unfortunately, Bruce Mathieson Sr. has some health issues this week and cannot be here in person. But he asked me to ask a few questions. If I can just make two comments on your speech, Mr. Hearl, one the customers didn't seem to get much of a run in your speech. And the second one was the use of the words, disproportionate control or influence. I'm not sure how you can justify those comments when Bruce Mathieson Jr is 1 of 8 directors. And Bruce Mathieson Sr as a major shareholder is trying to help all shareholders by pointing out some obvious bits and pieces. And I wouldn't call it a lot of misinformation. My first question, and I've shortened it considerably Mr. Hearl, I've taken out the swear words for those that know Bruce. In light of the significant shareholder value destruction of over $6 billion since listing, will the Chairman step down from his role. Or will it take the Bruce Mathieson Group to call an AGM at a later date to finally, so that you can finally accepts, he has lost the trust of the shareholders as reflected in the share price below $5?

Well, thank you, Ross, for those kind words. And please give Bruce Sr. my best wishes for a speedy recovery. Look, the independent NIDs and I act in the interest of all shareholders, not a selective and noisy few. As Chair, I'm very committed to resolving the current dispute with BMG and to the board renewal process that we've had underway for some time. BMG's public campaign supported by other former Woolworths executives is an attempt to elect Mr. Wavish, and gain greater control than the 15% of BMG would warrant. Their aim appears to me to be disrupt the Board and management to exert disproportionate control over Endeavour without paying for it. As Chair, I've been very transparent about the governance around and our commitment to Board renewal. The Board is very focused on share price performance. And as Chair, I take my responsibility seriously and acting in the interest of all shareholders. Thank you for your question.

Thank you. I ask another one?

Well, I want to move it around Ross, if there's a microphone 6?

I'd like to introduce Ms. Jane Mark a shareholder.

Hello. Look, I'd just like to say that the two big demographic groups are baby boomers and the millennials. Are the millennials drinking less alcoholic drinks, less alcohol content because they're being more sensible. And the other thing I wanted to ask about that they're thinking of bringing in labeling on alcohol like they did with cigarettes? And what do you feel about that alcohol is dangerous and blah, blah, blah?

Okay. Look, in terms of drinking trends, there is a general trend in most Western countries where people are drinking less, but they're drinking better, and I'll let Steve elaborate on this in a little bit. But what's happening is that people are probably drinking less volume, but they're drinking better quality wines. And that's why luxury and premium grade wines and indeed spirits as we're seeing growth in those categories, and that's indeed why we've invested in a couple of wineries, which provide premium and luxury grade wine. So yes, there is that trend, but we also provide an extensive range of low and 0 alcohol products as well. But I'll let Steve perhaps elaborate a little bit more on that.

Yes. Thank you, Jane, for the question. Historically, traditionalists and baby boomers have accounted for the majority of the spend in the alcoholic beverage category. But that has changed pretty considerably over the last couple of years, so that now generation x accounts for the majority of purchase demand, but they don't really drive the trends. The trends are being driven by millennial and Gen Z customers. And they're accounting for almost 50% of the spend now. So we know that very soon they're going to account for the, more than half of the spend in the category. And our businesses were really built to serve the needs of baby boomers as a matter of fact, as was a lot of what Gen X, I suppose, has been working on over the last decade or so, but we're very much focusing now on servicing the needs of the emerging consumer, and they are, of course, a very connected consumer, but they're equally a very health-conscious consumer. And while there has been a long-term trend in the reduction of leaders of pure alcohol consumed by all generations, actually, we are seeing a little bit of an acceleration of that at the moment. But people continue to drink better is what we observe. And that's why Dan Murphy's particularly, and to a degree, BWS, are very focused on meeting that customer need.

And what about the labeling?

Yes. Well, I think what we do with labeling is continue to work closely with all regulators in relation to changes there. There's obviously been in most recent times, change to labeling as it relates to pregnancy warnings and that's been rolled out across the industry. As I said in my remarks, we continue to engage very closely with regulators and community groups on their expectations in this regard, but there are no plans to change from that point at the moment as we understand it.

Thanks for your question. I think microphone 4 might have been up before 3, and then we'll come back to 5.

Chairman, I would like to introduce Mr. Kaz Kazim a shareholder.

Thank you. In your opening remarks or you mentioned why the dividend reinvestment plan wasn't introduced. It was introduced, but not implemented. And yet when you followed up, you said, you talked about the high cost of capital. Now how many dividend people signed up for the dividend reinvestment plan, and why did you not implement the DRP, but clearly, you were getting interest-free money? I mean you're talking about higher cost of capital. And here you are, the shareholders are offering you interest-free [ body ], and you're not accepting it. So there seems a bit odd for you to have rejected the implementation of the dividend reinvestment plan. How do you explain that?

Well, we didn't think it was appropriate at the time. We have significant headroom in our debt coverage, and we've got a lot of headroom there. So we simply didn't need the funds from the DRP. We're looking at reducing our working capital down, as Steve has already indicated, and we had some one-off payments in F '23 that drove our debt level up a bit, but it's coming down. We just didn't need -- we didn't need the extra capital.

If you say your debt is increasing?

Went up. A lot of it was onetime, and we've got a lot of headroom left. We just didn't think it was an appropriate way to manage the capital. Julianne, and then back to Ross.

Thank you, Chair. The ASA notes your early adoption of the new closing times of 4:00 a.m. to 10 a.m. For gaming rooms in Victoria. Can you comment on the changes? Your sales results for the first quarter of F '24 released yesterday, mentioned softness in gaming revenue. Was this caused by recent restrictions placed on gaming when will you publish gaming revenue as a separate item in your financial reporting?

Thanks, Julianne. Look, let me deal with the last point first. We hotel revenue is made up of a number of different revenue streams, food, beverage, accommodation, gaming. And a lot of our venues also have live event and entertainment activities and revenues. So to split it out, would not necessarily mean a lot, and it also could be to the detriment of endeavor in terms of giving a competitor -- competitors' knowledge of our revenue streams. That said, look, we'll continue to review our disclosures and make sure that stakeholders are adequately informed of any material business information that they required. In terms of the early move on reforms in Victoria, we've moved ahead to accelerate the early closing hours in Victoria. A lot of the reforms that, or changes that the Victorian government are considering. And again, a couple of more considering of announced for impact on, in June of next year. we're already doing. But we did take a decision to accelerate the early opening of our early closing of our hotels in Victoria, and we assessed the commercial impact on that. And we've taken mitigating steps to reduce or minimize that impact. And to date, we're in line with those assessments. I don't know, Steve, do you want to add anything?

Yes, I'd just say that the gaming data is available publicly on, in most states, so you can track it there. We said yesterday that the impact of the changes we took early in Victoria was in line expectations and nominal. So, and that is the case. So there is variation in gaming performance on a state-by-state basis, which is all publicly available.

And the only other thing I'd say is, look, we took those decisions because we aspire to lead in the area of responsibility. We're a big organization. We're a big target, but we, and we recognize that we've got the opportunity to impact how industry behaves. And we'll take that role very seriously.

Thank you, Chair. Can I just?

You want to ask another question? Or make a comment.

Can I make a comment?

Yes, sure.

Given the regulatory changes that are about, that are happening and likely to happen with gaming, don't you think that it is appropriate to provide those financials so that shareholders can at least make up their own mind? Whether they want to take that risk.

I'll take that as a comment, and thank you for it. Ross?

Bruce, wanted to comment on the early closures in Victoria, but we said, and I got Bruce's comments when he called me and I was overseas. Probably with a few swearwords as well. But we see it as an own goal, 12 months ahead of all the other hotels and they're taking advantage of it. Bruce's second question was that about 5 weeks ago, the CEO, Mr. Donohue rang him and talked about Endeavour selling the hotel chain? And what did you think about that? And would he be interested. And Bruce lost it, obviously, and said, you don't sell flagship assets. There were some talk in the market that it was speculation, but Bruce said, you wanted to confirm that he did take the phone call and it's not speculation. My question is, did Mr. Donohue had board approval to make that approach to Bruce?

Look, I'm not going to comment on every piece of speculation and the accusation that appears in the press if I did that, we'd probably be here for a week. Look, suffice to say that hotels are a critical part of Endeavour's portfolio and our future growth, and we're committed to their future.

Okay, I've got one more, and then I'll.

There's one over here. So can you just hold on?

I would like to introduce Mr. Freeman Sang a shareholder.

Yes, Freeman is my name. I just want to make a comment and a subsequent question for that. First of all, I agree with the Chairman and also Steve about the customer first for retail business is really, very important that the customers have a good experience when they come to the store and purchase the products and they're happy to go home. I'll just say about my experience, okay? First of all, I get involved in constructing the first Dan Murphy's store in Melbourne and Sydney and also I put the LED lighting in all BWS stores. So I do have a little bit experience and no objective about the business, okay? That's my background. And my experience in the Dan Murphy's’ store is, store is big. And there's a lot of products put in the store. So when I go to purchase the product, and first of all, sometimes it's difficult to locate the products I found because it's such a big store. Second thing is there seems no map to help me to find, so at least I can go to the [indiscernible] and can find or certain porter can go in fine. It's very hard sometimes to fund in some Dan Murphy’s store i found. Second thing is when I asked the staff in the store, some of them, not all of them, obviously, I found they did not have the experience to introduce what the best of the product and where you can find the product. And sometimes, even they don't aware of their advertise online products that are on sale at the time as find it difficult. And the other thing is because of that reason, didn't get the experience to find easy and present in shopping experience, and that's my concern because as a shareholder, I want every customer to come to the store and buy the bottle easily to find and good price and enjoy that is experienced by far. And I just want to ask probably Steve can answer. How you provide the training? Because I found some of the staff is very young, inexperience in the store alone. And there's not enough staff. I can find to ask the question. So that's my comment and question.

Look, thanks, just before Steve answers the detailed question about training and store layout. Dan's has a leading, I mean, by country mile NPS scores, Net Promoter Scores, we research our customer experience daily, weekly, monthly, and we track it, and the Board has line of sight to that. And all the data we've said that nationally, Dan's is got incredibly market-leading scores around customer satisfaction. But I'll let Steve answer specifics around training and store layout.

Yes. Thanks, Mr. Sang for the question. And firstly, can I just say my apologies for us not meeting your expectations. It's never our intent as any part of our business. And as Peter says, we do focus very closely on our customer service. So I might like to take the topic up with you separately after the meeting, if possible. We put a lot of effort actually into training our team. We do serve millions of customers every week, and there are tens of thousands of us, as we've said. So I acknowledge that we don't always get it right. And actually, our team is the people that we rely on to help people navigate the store, notwithstanding that our latest store format, the 2.0 format, we've put a lot of effort into wayfinding to make it easier for customers to find the products that they're looking for through signage and those sorts of things. So again, I appreciate the opportunity to have a chat about your specific experience after the meeting so that I can address those concerns directly. But as Peter says, we are very, very focused on responding to customer feedback in a real-time basis and do invest heavily in training our teams.

Thank you. Ross?

One last question. Mr. Chairman, on Dan Murphy's, actually. I'm a very happy customer. I'm one of the 27 million, members.

5.3 million.

I do find the service and delivery is very good. However, what I'm noticing is that Dan's was built on the everyday low-price retailer and category killer. How do we explain the first 8 quarters of listing when Coles Liquor beat us every quarter. And I know that the quarter just gone yesterday or today. We actually beat Coles Liquor for the first time for 9 quarters, but hardly shooting the lights out with 1.9% versus Coles Liquor 1.8%. Have we lost the mojo in Dan's, and it's no longer the everyday low-price retailer?

No, not at all. I mean, Dan's has got incredible value scores. As Steve has already said, our surveys and research say that Dan's scores 60%, having best value next competitor is like 40%. We have 600,000 price checks being done daily to ensure that we beat competition in real time. So, and the low-cost guarantee is well understood by customers. Coming back to your point about competition and how we've performed. We're going to start with some facts. Retail revenue has grown over the 4-year period from F '19 to F '23. Bear in mind that F'21 and F '22 were all impacted by distortions in the marketplace via COVID. So we've grown at a compound average growth rate of 4%, which is right in line with our next nearest competitor, the 1 that you mentioned. And that's off a much larger base. Our retail sales are about 2.5x greater than the next nearest competitor. Our margins are stronger by 200 basis points to the next nearest competitor. So we're doing that. We're managing sales, GP margin, and costs, and it's going to the bottom line. And we're doing that through better buying, premiumization, people are drinking better. They might be drinking a little less, but they're drinking better, and that means higher margins. And we've got the advantage of having our Pinnacle Drinks, not Peniche drinks as somebody referred to them recently. But Pinnacle Drinks provides us with tremendous opportunity to innovate, and we've driven our margins through the Pinnacle range without detracting from the ranges that we offer on well-known other brands. Thank you for your question, Bruce.

I'll pass you on to Bruce Sr.

Julianne. This is your third one.

I know, I know. Australia is apparently in the middle of a Wine Glut up sales to China disappeared. And although that now looks more promising, inventory buildups currently hurting the industry. Can the chair expand on Endeavour's strategy for this part of the business? Do you intend to grow the wineries and why? And what does it add to Endeavor?

Look, let me start, and I'll let Steve add to it. But not all wines are created equal, okay? Just that's where I'd start. There's luxury, there's premium and there's commercial. And the glut that you referred to is largely around commercial grade wine. And we're not about to go out and buy commercial-grade wines. There is a shortage of luxury and premium grade wines. And the acquisitions we've made in the wineries that we've bought over the last couple of years play right into that trend. It's not just a trend here in Australia, but it's a trend internationally. And companies like TWE are growing their premium and luxury portfolios quite extensively. So we see the focus on premium grade wines, the luxury grade wines is accretive to margins and shareholder value. Steve, do you want to add anything to that?

I'll make a couple of brief remarks. I think the first thing I'd say is that we recognize that role in the wine industry in Australia, whereas significant a producer is anybody else of domestic wine to be sold in the domestic market, and that's through our Pinnacle Drinks business, which historically is overweight the commercial end of the category. So it's what prompted us to embark on a premiumization strategy, which included the acquisition of a number of wineries, all of which are intended to focus on the higher price points that are in such demand. And in fact, we cannot supply sufficient wine to meet the demand that we have for the majority of our Paragon Wine Estates portfolio. So we're working through how we can do that better. But we do see opportunities to continue to increase the penetration and relevance of the wine category to Australians, but also overseas. And we've begun with very small steps to export our wines internationally. We look forward to growing that.

The only other thing I would add is that wineries, hotels, retail outlets all have to deliver upon their business case investment return levels. And we target a 15%, minimum 15% on any growth investment that we make. And so far, the wineries we've acquired are meeting those hurdle rate return targets. I think 5 might have been next, no 2, and then we'll go to one.

Chairman, I'd like to introduce Toshiba a shareholder.

I would like to refer to your quote that you started with, which was that what consumers or household discretionary incomes are under pressure. And knowing that Dan Murphy's entire model is on cheap alcohol, have you and the Board failed to realize that younger people have been switching from cask wine to spirits and premixed drinks. And will you consider coming with your own home brands such as your own wine 196 or your own Endeavour Group Vodka to lower the prices amongst young people?

Steve, I might let you answer that other than to preface it by saying that we take our responsible service of alcohol very seriously, and we have a whole range of programs in place that ensure that we do adhere to our responsible service of alcohol. So, but in terms of the product offering itself, I'd like Steve to answer that.

Yes, thank you for the question. I think it's really relevant in the modern context, and I made remarks about the material shift towards millennial and Gen Z consumers accounting for almost 50% of the spend. Their appetite for our product is very different to that of Gen X which I'm a part of, and certainly baby boomers and traditionals that preceded us -- and traditionalists. Anyway, the reality is that there are huge shifts taking place in the nature of consumer demand off the back of that generational change. What we've tried to do through our Pinnacle Drinks portfolio is keep pace with that. In fact, our largest selling vodkas are our own, and they are produced for us by producers around the world, most notably in Europe. So we've already got a base there. One of our brands is called [indiscernible], and we also produce it in an RTD or premixed equivalent. More recently, we've partnered with the supplier in Japan to take advantage of the phenomenon that is lemon-flavored shochu base drinks. We'll just launched a [indiscernible] equivalent of something akin to the Suntory minus 196, which is hugely popular with those younger adult customers.

Thank you. I think I should have asked for your ID too. Microphone 4, sorry. 1 first? Yes, go 1.

Chairman, I'd like to reintroduce Dr. Jonathan Tyler, a shareholder who has another question.

Chair, I would like to thank you and the board for inviting Auntie Donna Ingram here today to Welcome us to Country. So I won't acknowledge I won't go on by acknowledging the Gadigal people of the Eora Nation. But I noted that Auntie Donna finished by saying this land is, was and always will be traditional owner land. Can I take from this that the Board has an intention to hand back all property in Australia to the traditional owners? And if that is an intention, is it a decision of the Board? Or will it be a resolution at an Annual General Meeting.

I don't think the intent of Auntie Donna's remarks was to take back land that is owned by people around the country side. But I'll take that as a comment. We've got no plans to conduct an AGM around that matter. We respect the First Nations people, and we'll continue to do so. Thank you. Microphone 4.

Chairman, I would like to reintroduce Mr. Kaz Kazim a shareholder with another question.

Thank you. I've been following the dispute between the different parties vying for power in the, for control of the Board. Now that's suggest some sort of turbulence in management terms because, as a consequence, are you seeking advice from our traditional consultants, 1 of the 4 consultants that were found to have engaged extremely disgraceful behavior and gauging the package of the punters around the country?

I'm not sure to which advisers you refer?

I'm talking about, I've been following the disputes, different parties trying to control the board or increase their influence on the board, et cetera, et cetera, suggest that is discomfort in the administration and management of Endeavour. So are you using any consultants any of the 4 major consultants, EY, KPMG or the other 2 [ pages ] whose behavior was found to be extremely disgusting. And if you are, which capital did you use and how much did you pay? Or are you using funds to develop your own management skills within the company?

Well, I think the adviser you're referring to the accounting audit firms that are out in the marketplace. Our audit is Deloitte. We have a representative here today, Mr. Jamie Gatt. And, there's been no, we've had no issues with Deloitte's in the conduct of their business. We do use advisers outside of the accounting firms to help us with matters like we're dealing with the Bruce Mathieson Group. That's quite common in our industry, but I can assure you that the costs are not out of the ordinary for this sort of work. But we also have our own internal staff that experience in these matters as well. So it's a combination of using external advisers and our own internal resources to make sure that we're representing the best interest of all shareholders.

I understand the auditing work is very different to other management advice that's being provided by consult. I was thinking more of the consulting advice next to the [indiscernible].

Are -- they're not like non-audit services?

Yes, that's correct.

Okay. Yes. Well, look, we, I think Deloitte's from memory, their non-audit services account for about 6% or 7% of the total fees that we pay them. And we use from time to time, other. I think we may have used Ernst & Young on occasions for 1 or 2 things. Kate Beattie is here. I mean maybe, Kate, you could elaborate on that.

Thank you, Chair, and thank you for the question. We do.

Stand up, Kate. Sorry.

As in the room I am Kate Beattie, I'm the CFO of Endeavour Group. Thank you for the question. We do from time to time use multiple of the big 4, as you've called the 4 various services to the group, largely advisory services in relation to things like technology transformation program, where we do rely on external expertise to support us in making sure that we implement those programs judiciously and with the right expertise underpinning how we design the outcomes that we are executing.

Have you considered universities who have a much greater research facility as well as the capacity to provide such advice because they're consistently teaching and expanding the research interest to the students that are attending the universities?

Well, to my knowledge, we haven't considered universities, but we'll take that suggestion on board and give it to due consideration. Thank you for it.

Okay. Just one other question when I asked you about the dividend reinvestment plan. And I meant to ask you how many shareholders had signed up at the time? Do you have any figures?

I don't have that number. Yes. About -- Terence just told me -- our Company Secretary has told me that there's about 4.8% or 420-odd thousand shareholders.

And if they had participated the dividend investment plan, how much money would have been raised as a consequence?

I don't know. It depends how many shares each of those shareholders had. So I can't give you an answer on that, but I'm happy to take it on notice and come back to you.

Terrific. Thank you.

Thanks a lot. Number two, sorry, was four next or -- no? You are up? Two, sorry.

Chairman, I would like to reintroduce [indiscernible].

As previously you said that responsibility and governance is sort of your problem as you may focus. I personally think that this is ridiculous for this company. But I would like to point out that will you lobby the Western Australian government and further put pressure on the ministers to allow Endeavour Group to put gaming machines in your Western Australia hotels?

We have no plans to do that.

Is this because of your responsibility or you believe it's morally wrong or is it...

No. which just -- it's the law of the land in Western Australia. So we're adhering to the law of the land.

Are you going to pressure the existing government to change this law?

No.

Is there any reason for that?

We just don't think it's appropriate. We've got 20-odd hotels in Western Australia and the major part of our operations on the S&C board. And we operate those 28 hotels in West Australia profitably as they are.

That's -- are you not interested in increasing your profit margins?

Absolutely. And we're doing it through a range of means. Hotels are more than just about gaming. It's an important part of it and that we hope will be for a long time. But we've got food. We've got beverage. We've got accommodation. We've got events and live acts. In fact, pre-COVID, we're the largest employer of live acts in Australia. It's gradually coming back. It's not where it was but pre-COVID. But, yes, we see our hotels as multifaceted sources of entertainment, discretionary spending amongst the community. And we'll continue to do so. We'll tailor our offerings according to the laws of the land and the communities with which we're operating. Thank you. Number five?

Mr. Chairman, introducing [indiscernible] as a shareholder.

Thank you, Chairman. So my question is just a small drag. All right? So if you take a big -- take a look at the big water there, we are like a big enthusiast on recycling. And I'm just wondering why like the beer bottles and the drink cans, they all got $0.10 recycling level. And the big bottles like wine and white wines and one like that, they are not worth any cent at all for recycling. So where do they end up? Do they end up in landfill? So there would be a rest. So I'm just wondering if that can be promoted as a greening effect to promote the environment, can and -- beer bottles and the cans. I'm always wondering why this is -- one big bottle, I think it's like 3 or 4 sizes of the 375 milliliters of beer bottle, they could be very beneficial to the environment. So I just wanted to find out why is -- why are those bottles are not recyclable?

I have no idea, Dan, but I'm sure Steve does, so I'll hand over to Steve on that one.

Thank you for the question. Container deposit schemes are conducted on a state-by-state basis. And as it stands, they only apply to those smaller vessels that you were talking about. However, in Victoria, they're about to launch on larger bottles, so wine and glass spirits bottles, and there is an intention for that to take place in Queensland as well in the future. So there are changes in food, but they are led by the state governments. I would add that we pursue a number of recycling initiatives in our retail outlets as well. So things like cokes and carton dividers and those sorts of things are very actively recycled by our teams, and we encourage customers to return them to our stores so that we can reuse them.

Okay. Thank you. We'll go six, three and then four and back to five to make it easy for work our way around the room.

Thank you, Mr. Chairman. I would like to introduce Mr. Allan Lehmann, a shareholder.

Mr. Chairman, in addition to being a shareholder, I'm also a customer, particularly of Dan Murphy's, and I'm a very regular customer, I must say. I would ask a further question while I asked the previous annual general meetings, and it's probably directed more to Mr. Steve Donohue. My question really is, is the company prepared to take on an educational role in addition to its sales roles of quality wine by having tasting rooms or some sort of equivalent at their various stores. That way, particularly in my case, I'd be interested in trying different wines, particularly of higher quality. And I just wondered again at this Annual General Meeting, whether there could be some steps taken towards that Endeavour?

Well, I'll let Steve elaborate but quite a number of our Dan's stores do have tasting areas in them. But...

Thank you, Allan, for the question. If I may, I might just clarify my former answer. The Queensland container deposit scheme on the large format starts tomorrow. So that is already a foot, just to clarify that point. Regarding team and customer education, we invest very heavily behind our team education, and I'm very proud of the fact that we would lead the Australian market in the Wine and Spirits Education Trust or WSET training for the maximum number of people that is appropriate in our business. And in particular, in Dan Murphy's, we focus on providing customers access to tastings on a regular basis as is appropriate, generally at the higher foot full times over the weekends and so on. We also invest behind what we describe as wine merchants in our stores. And these folks are experts in the topic but affable experts, folks that you can have a proper conversation with without getting too highfalutin or if you'd like it to be very highfalutin they're also able to do that. So I'd be happy to take up the topic with you separately as to where you're shopping and what aspirations you might have to participate perhaps in something like WSET.

Chairman, I would like to reintroduce Julianne Mills as a shareholder at this time.

Sorry, I'm speaking purely on a personal basis here because a lot of my members may not agree with my views here. But I would like to commend you on your bringing forward those closing hours because I really do believe that it's a good indication of how you are leading in responsibility. And that's all I have to say. Thank you.

Thank you for your comment. Now, five?

Mr. Chairman, introducing Peter George as a shareholder.

Just to clarify or add to your previous answer regarding gaming in Perth pubs. I understand the legislation that established Crown Casino, basically, meant that they were the only venue in Perth, that's why you have gaming machines. And I know there's no plan to change that. And just with regard to the investment in the hotel, in wineries and vineyards and so forth in a capital expensive world. Do you seriously think you can get a 15% return on those assets?

Yes. On the premium and luxury wineries, which we're focused on, the business cases are that they're going to deliver 15% plus return. And so far, they're tracking towards that. And I guess we'll be held accountable if they don't deliver. A very different economics in premium and luxury wines versus commercial grade wines, and most of the problems in the wine industry are driven by commercial grade wineries. Thank you for your question, though. Three?

Chairman, I would like to introduce [ Daniel Chen ], a shareholder.

I am just interested to know our hotel business also involve accommodation. Am I right?

Yes, correct. We're not everywhere, but in a large number of our hotels, we...

Are we making any profit from this accommodation business?

The short answer is yes. Yes, we do. We -- we've started to expand our accommodation focus, and we're very pleased with the occupancy rates and so forth that we're getting out of our hotels. So it's another way of increasing the revenues per square foot in our hotels. Rest assured, we wouldn't be doing it if we weren't going to make money out of it.

What is the occupation rate?

Off the top of my head, but I think it's in the order of 70% or 80%. Around that order. I stand to be corrected on that number. But look, rest assured, we're very focused on making sure that the rooms that we have for accommodation in our hotels, and I've stated a number of them, and they're well patronized. Thank you. Number six?

I would like to introduce Ms. Eileen Hays, a shareholder.

Chair, I'll just start to say that this is clearly a multifaceted complex business. And I would like to commend the way you've been inclusive, honest, sincere, confident in your strive to improve the business for all of us. The interest that's been generated is quite clear. Look at the number of people you have here.

Well, thank you for those kind words.

So the other thing is that in being transparent, I would like to see, and I think pat others, that the name certainly along the top table also show your role in the business. That is part of transparency so that later on, when there are lots of people to see the person we want to speak to. Not only that, but I think badges should be worn. Name and role. We can then go to the person who is probably best able to answer the question or we can be directed by that person to say, well, this person might be more appropriate.

Thank you for that suggestion. Appreciate it.

The other thing is maybe -- this is the answer to another lady's question that maybe a map would help to show where the stores are in other states or around the country, accommodation. I think there was a comment from Chair about not giving too much information away to competitors.

We're not trying to hide our locations from our customers. But I actually think a lot of that information is on our website, isn't it? It is available on our website, but...

No. I'm talking about here in the meeting. This is our chance to see and to hear.

Okay, good thought. We'll take that on board.

And the other thing is, as we mentioned, Page 4, Page 8, this Endeavour go. It's also been mentioned in the meeting, but what is it? I still don't understand. Maybe it needs a definition and then an example.

Okay. If you'd like, I can ask Steve to give a very brief explanation of our group optimization program, which is all about cost optimization and rightsizing the organization for...