Am I being too harsh/cynical in thinking this kind of stuff is a red flag?

Maybe it's overly simplistic, but when the CEO is bringing in consultants it feels like a tacit admission that they are bereft of any ideas and are essentially outsourcing their job.

Why are shareholders paying Hrdlicka a base salary of $2m, with an low bar STI bonus that can boost that to over $4m per annum, if she is just going to turn around and hire someone else?

I'd have more sympathy if the big consultants had a great track record, but that's a rather dubious assertion:

From the London Times in 2024:

Now, a fresh pair of eyes can certainly help. And there are some super smart cookies at these consulting firms, but they operate under different incentives, and dont have any skin in the game.

Anyway, i'm probably just a grumpy old man who likes to shake his fist at the sky :)

Another Woolies sell off in Endeavour, reducing its stake to 4.1%. Proceeds will be returned to Woolies shareholders.

https://insideretail.com.au/business/woolworths-agrees-to-sell-5-per-cent-of-endeavour-group-for-468-million-202405?utm_source=brevo&utm_campaign=IRAU-NB-2024-05-02&utm_medium=email

Woolworths selling off $600m stake in EDV. Bit of a drop in SP that hasn't been seen in quite some time. Perhaps worth another look into the new year.

Good brief writeup in The Australian highlighting some of the updates with Endeavour group including a few pokies that weren't set up properly and supposed purchasing of more pubs.

One could presume Woolworths might have made the sale to free up some cash and diversify further and further away from the tainted non-ESG lien of the business.

One of my team just called, telling me he was stressing over the weekend about a customer opportunity as he thinks we are providing a less than ideal solution. He is stressed as he cares. I knew he was out on Friday and Saturday nights over the weekend, so I asked how he was stressed when he was boozin’. Apparently, it is while lying in bed the next day tending a hangover.

Why did I mention this? It was ‘cause he was out, and that matters as it means things are opening up again. H1 did still have restrictions, especially in NSW and Victoria which impacted the hotel business.

Endeavour has now been operating as an independent business from big brother (or is that sister) Woolworths for six months. In that time they have managed to present some decent results, including:

• Flat overall sales
• Significant increase (almost 25%) in online sales
• EBIT up 3.2% to $556M
• Net profit after tax up over 15% to $331M

The company is continuing to dominate in the packaged sector and is not standing still. In the half they:

• Opened 24 new stores
• Renewed 49 stores
• There are now 1667 packaged outlets and 342 hotels

Apparently, as a nation, we are drinking less, although it seems, not my colleague. When we do, we are going to Dan's or BWS, or into one of the company hotels.

Looks like the team is doing the right things in the face of challenging conditions. They call out some headwinds, but at least that means they are thinking about them. Held in SMSF.

In the words of the great philosopher Homer J Simpson – “to alcohol the cause of and solution to all life’s problems"

Woolworths has separated itself from boozing, likely to bolster the ESG profile. The added benefit is it also means they get out of owning hotels and all the other nasties like poker machines, and other gambling such as Keno and TAB. In Queensland to have a bottle shop, the bottle shop needs to have an associated pub. To facilitate this, Woolworths were one of the largest owners of pubs in the state.

This new brand holds all the familiar outlet brands. Dan’s, BWS, Cellardoors, Jimms plus a few others in over 1500 stores and 300 something pubs. The pubs contain more than 12,000 of the aforementioned pokies.

Despite being chucked out of Woolies, they are not completely against boozing and gambling, they will continue to hold just under 15% of the company. The two will also stay friends, well paid up friends, sharing supply chain and logistics, some branding, and business support. Compensation to Woolworths will be circa $550k per annum.

With approximately 40% of Australians consuming alcohol weekly and over 5% daily there is a ready market although the consumption levels have been on a slow decline for years.

Interestingly, according to Roy Morgan consumption increased in 2020. We got on it during lockdown it seems.

If you can get over the ethics of the business, this is one for the watchlist.