Thank you for standing by, and welcome to the Endeavour Group's F24 first quarter trading update. All participants are in a listen-only mode. Endeavour CEO, Steve Donohue, will provide some opening remarks, followed by a question-and-answer session. All participants will need to press Star 1 to ask a question. Only one question per person will be permitted. However, if time permits, participants are welcome to rejoin the question queue. I'd now like to hand the conference over to Mr. Steve Donohue, CEO. Please go ahead.
Thanks, and thank you everyone for joining us this morning. I'm joined here today by our CFO, Kate Beattie. My plan today is to make some quick opening comments before turning to questions. But before I begin, I'd like to acknowledge the traditional custodians of the land on which we're conducting this call today, the Gadigal people, and pay my respects to their elders, past, present, and emerging. Now, turning to our trading update. During the first quarter, the group delivered sales of AUD 3.091 billion, up 2.1% on the prior corresponding period. This reflects solid sales performance across both our retail and hotel segments. Firstly, a few comments on our retail performance.
In the quarter, BWS and Dan Murphy's sales grew by 2.6% at the top line and by 1.8% on a comparable basis, with the average item price and shopping frequency in both brands growing, which more than offset lower items per basket. Sales growth continues to be supported by product innovation, including through our Pinnacle Drinks portfolio, which again grew its share of our retail sales in the quarter. The strong performances of Dan Murphy's and BWS were partially offset by lower sales in our specialty businesses. When you include the specialty businesses, retail sales growth was 1.9% at the top line and 1.2% comparably. Dan Murphy's remains the top destination for customers seeking the best value and widest range, reflected in a value perception score that's almost double that of the nearest competitor.
Similarly, Dan Murphy's Voice of Customer score saw a 2-point year-on-year uplift, while BWS's offering of both convenience and value also continues to resonate with customers, maintaining a steady Voice of Customer score. Of the total retail sales in the quarter, 8.7% were transacted online. Online sales of AUD 221 million represents year-on-year growth of 2.8%. Dan Murphy saw double-digit online sales growth, driven by the convenience of pickup at store, which comprised a record 70% of Dan Murphy's online orders placed in the quarter, remembering that about a third of our total sales are digitally influenced, and that runs at about 50% for Dan Murphy's. In contrast, sales for Jimmy Brings declined as we reduced our investment levels in that business in response to continued market consolidation in that space.
Sales growth in both BWS and Dan Murphy's accelerated through the last two weeks of the quarter, coinciding with the footy finals and favorable weather conditions, and this positive sales momentum has continued into the second quarter. Now, on to our hotel segment. Hotels recorded sales growth of 2.8% in the quarter, supported by major sporting events, including the achievements of the Matildas in the Women's FIFA World Cup, and then later, the footy finals. Weekly sales throughout the quarter remained stable, with no new hotels added in the quarter. Our food offer continues to perform particularly well, serving 4.5% more covers in the period than the prior year. Bars and accommodation were also in growth, while gaming revenue for the first quarter was very slightly lower than Q1 F2023 levels.
At the end of August, as we previously informed the market, we moved early to introduce reduced hours in our gaming rooms in Victoria, in line with the planned changes announced by the Victorian Government. As anticipated, the early introduction of these trading hours has had a nominal impact on hotels' revenue in the quarter, which was in line with our expectations. Heading into the current quarter, the steady sales momentum in hotels has been sustained, and we anticipate continued strength in food and bars as customers seek affordable value during the entertainment season. Pleasingly, Christmas bookings are already breaking records. At the end of Q1, 40% of covers have been booked at 266 of our hotels nationwide that are hosting Christmas Day events. We anticipate that close to 46,000 Australians will enjoy festive celebrations at our hotels this year.
Looking ahead, across both retail and hotels, we continue to closely monitor customer choices in context of rising cost-of-living pressures. We remain confident that we offer a great breadth of options and value for customers however they choose to shop, socialize, and celebrate. I'd also like to take this opportunity to voice our support for the Commonwealth Government's progress regarding tariffs on Australian wine into China. As one of Australia's largest wine industry participants across retail, winemaking, and industry services, this is very encouraging in light of the uncertainty Australian winemakers have faced in recent years. Finally, I'd like to take the opportunity to thank all team members across Endeavour Group for their efforts in the quarter and for the key role they'll play in supporting our customers' social occasions again this festive season. Now I'd like to open up to any questions.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the headset to ask your question. Your first question comes from David Errington from Bank of America. Please go ahead.
Morning, Steve. Steve, if I could, I suppose let's address the elephant in the room. Let's get it out on the table. The view out there is that you guys have lost your mojo in Dan Murphy's and BWS. Now, the numbers don't reflect that because you're growing ahead of the market. But at the end of the day, Dan Murphy's probably needs to be doing better than 1.8% if you're gonna be able to grow profit in the future. So my question is, given all the events, what can we expect to see from you in terms of being able to generate stronger growth from Dan Murphy's? What? Because you've clearly said, the chairman's come out and said, "You can do things better." What are we looking at now in terms of? 'Cause investors wanna see you do better.
They, you-- Dan Murphy's is such a great brand. I mean, there's three great brands: Dan Murphy, Bunnings, and JB Hi-Fi. Dan Murphy should be growing a lot better. So what can we expect from you in the next three to six months as investors, to really believe that you haven't lost your mojo in those two key businesses? Now, it's a bit of a broad question, but it's the elephant in the room, and it's what I think all investors need to hear from you.
Yeah, thanks, David, and appreciate the acknowledgment of the performance. I think, as you've called out, growing our core retail brands at 2.6%, is positive momentum, and appreciate you recognizing that. To your question about what to expect from us going forward, we released some materials to the market over the last couple of weeks, which talked about how we intend to unlock the next phase of growth, which goes to exactly what you're talking about. And the first of those was that we're gonna continue to drive earnings through a balance of sales growth, gross margin management, and cost control. That won't change. So we'll continue to seek to grow top-line sales, but we'll do it in a way that reflects profitable growth.
So, you should expect that from us in the quarter and years ahead, actually. To this question of Dan Murphy's, I think we've outlined very clearly in this quarterly announcement, the position that Dan Murphy's has and will continue to have in relation to its lowest price guarantee, its EDLP, its resonance with customers, whether that be My Dan's members or its price perception, or the fact that it is the preferred place to shop for most Australians and continues to grow in that respect. So we'll continue to leverage that as we seek to grow our top-line sales. We did also, though, say that we know we need to go back and pursue the enhancement and optimization of our hotels portfolio.
So in the materials, we shared the returns that we get from retail relative to that we're achieving in hotels. We acknowledge that there is some work to do to improve the returns that we get out of the capital that we're investing in our hotel business. You should expect us to talk to that in more detail at our December Investor Day, and to deliver on it, which is absolutely our intent. We also talked about the need for us to continue to focus on our cost management program, Endeavour Go, and that will continue. We're working hard on managing our working capital, our inventory, and we're making good progress in that respect, I might add, as we come into the peak trading period.
And then the last thing we talked about in that update was the need to continue to engage directly with government and regulators, given the relative uncertainty as it relates to gaming regs in the market. So, stand by all of those focus areas, but do point out, as you have, that we have, you know, grown our retail sales by 2.6% across the BWS and Dan Murphy's businesses in the quarter.
Thanks, Steve.
Your next question comes from Shaun Cousins, from UBS. Please go ahead.
Great. Good morning, Steve. Just a question regarding retail. I think your inflation seems to be running a little bit below where excise is. I'm just wanna ask a few questions around premiumization. That didn't seem to be called out at this time, where that has arguably been a feature of recent years, and then also promotions. Has promotional intensity risen, and what's been the net impact on sales? Conscious that might mean lower prices, but your volumes also seem to be falling there. So just the questions around retail, please.
Yeah, thanks, Shaun. So on the inflation side of things, yes, it's moderated to in the vicinity of 5%. It was sort of well almost a percentage point above 5, and it's come back a little bit. So that, that's the reality. That is ahead of excise, though. So the excise increase was less than that. So there's some manufacturers' price increases in that number as well as our margin. So there's a combination of factors, of course, that play into inflation, but it has come off somewhat in the quarter. The other... Just remind me, the other part of your question, Shaun?
Premiumization.
Premiumization.
[crosstalk]Are you still seeing premiumization? Yeah.
Look, we are still seeing premiumization across all categories, but we're seeing more category shift than we have perhaps so previously. So, we still see strength in categories like glass spirits and wine, but we're also seeing movements across those categories. So, you know, the wine space, you're still seeing premium white wine selling, but given the weather conditions, we've seen a bit less premium red wine selling. Father's Day, as we've referenced, had some impacts on premium wine sales, but for gifting more than for consumption. So, there is some shifts going on, I think is the message that we're sharing here, and they're happening as much at a category level, and they're related to the nature of customers' social occasions.
So we're seeing some changes in the nature of social occasions, which are then reflected in those category shifts that I talked about.
Great. And then just promotional intensity, and how's that playing out? 'Cause your volumes seem to be falling.
Yeah, promotional intent, well, volumes are falling across the market as they've always done, so that's the long-term trend. No, no change to the fact that volumes have fallen, notwithstanding the rate of inflation having some impact on that.... We've seen promotional intensity across the market pretty sustained from the prior quarter, I would say. There's been some switches from some competitors in terms of which categories they're focused on, but overall, the frequency and depth of activities are round about the same.
Fantastic. Thanks, Steve.
Thanks, Shaun.
Your next question comes from Ben Gilbert from Jarden. Please go ahead.
Morning, Ben. Just interested in some of the trends across liquor. We've got a situation now where sort of working age population's at record highs, as you said, so we've got warmer weather, and it feels like a value shopper should benefit Dan's in terms of probably people doing more mission-based as opposed to impulse, where they might be paying a bit more. I'm just wondering around how, when you sort of talk to those comments around improving trends towards the end of September into October, do you think that the business, in terms of how it's structured, in terms of the value play is benefiting, i.e., are you gaining share, or do you think it's more of a market phenomenon? And I'm sorry, second part of it is the volume story.
Given the strength of population growth, is there an expectation that rate of volume decline starts to ease across the market over the next sort of three to six months?
Yeah, thanks, Ben. There's a few bits to that. So I'll just go back again on this point about the volume change and customer behavior. The volume declines have been consistent over a long period of time. They've accelerated somewhat in line with the increase in inflation. So it's been a long time since these categories have seen inflation at that level. And what people are doing is spending the same amount, but they are obviously getting less because prices have gone up, so. But in terms of shopping patterns, people are shopping more often and buying a little bit less each time they shop. So we could read into that what we will, I suppose, in terms of the psychology of the customer living through cost of living pressures, but that's the overall change in behavior.
As it goes, as far as Dan Murphy's is concerned, what we're seeing is the strength of that brand really coming to the fore under the current circumstances. So, we've talked about the fact that the total sales being generated by My Dan's members are in the vicinity of 90% these days. That is, people using My Dan's membership to access our proactive price beats of every competitor in the market. You can imagine that that is very appealing when people are trying to save money. Our customers tell us that their preferred place to shop continues to be Dan Murphy's. In fact, not just our customers, but all customers would prefer to shop at Dan Murphy's. For a lot of people, the challenge is having one nearby.
So, Dan's and the lowest liquor price guarantee, with the underpinning everyday low prices that it's always had, continues to be a real driver of its growth and success. And like you, I think based on the nature of your question, we think that stands Dan's in continued good stead, particularly coming into peak trade. Because Dan's has always been the big event business, and, I think as people come into Christmas, they'll be looking to save the maximum amount of money on the big shop that they do for Christmas, and Dan's will absolutely make sure they've beaten everybody else's prices to deliver on that promise.
Great. Thank you.
Thanks, Ben.
Your next question comes from Michael Simotas from Jefferies. Please go ahead.
Good morning, Steve and Kate. So you've called out the numbers or the growth rate for the BWS and Dan Murphy's specifically, and I understand the reasons for that. The drag from specialty businesses is quite large. Can you sort of talk us through a little bit more detail on what's driving that? I mean, you've called out Jimmy Brings, but I'd be surprised if Jimmy Brings could move the numbers that much. So what else is in there, please?
Yeah. Thanks, Michael. So our specialty businesses comprise Jimmy Brings and then Shorty's and Langton's at the retail level, and then we've got some wholesale business, I suppose, which we roll up into, historically rolled up into the retail number, which is our Pinnacle Drinks business. That is our external sales, and that comprises bottling and packaging out of our Vinpac business in South Australia, as well as the sales that we make of Pinnacle products to through our partners, to other retailers and restaurants in Australia, as well as our export sales for Pinnacle. So one of the things we wanted to do was give real clarity to the performance of Dan's and BWS, which is why we pulled all that out.
In terms of Jimmy's itself, we referenced Jimmy's because there is a change going on in the market, I think, as it relates to the way people are shopping for ultra-convenience, and there's some consolidation happening in that space, and Jimmy's has been a contributor to that decline. That's the reason why we've pulled back some of the investments that we've made in Jimmy's historically, to reflect the need for us to sort of trim that up in relation to our position in the market. Does that help you?
It sort of gives us a little bit more context on what's in there. But just to understand the dynamic, has that drag been consistent for a number of periods, or is there something that accelerated in this quarter?
No, it has actually been pretty consistent. In fact, it's probably moderating in the future, we would expect, but it has been consistent historically.
Okay.
And then it's one of the reasons why I referenced the opportunity with export increasing potentially, because that's an opportunity. It may not be a scale opportunity at the level of our retail businesses, obviously, but it's something that we're conscious of.
Yeah. All right. Thank you.
Your next question comes from Bryan Raymond from JP Morgan. Please go ahead.
... Just interested in the, hi, can you hear me?
Yeah, got you.
Yep, great. Sorry. Just on hotels, just interested in the mix of the business and how that's shifting. I think on gaming, you mentioned it's slightly lower year-on-year in the September quarter. I just noticed Victorian market is down about 5%. Queensland's broadly flat year-on-year. Just wondering if you could give any more context around that. Are you gaining share? And then also, when you talk about nominal impact from opening hours, would that be less than 1%? I assume it's a small impact, but if you could give us a bit more color around how that might be impacting your business. And then just finally on the food side, you mentioned cover's up 4.5%, I think. Is that consistent through to sales?
Are you seeing that sort of uplift in the food side? Thanks.
Thanks, Bryan. Yeah, look, it is low single digits, like the lowest of single digits in the gaming space. So, and it's oscillating marginally. So, you've called out Victoria. Victoria is one of the more challenging markets, no doubt about it. But overall, with some puts and takes, we see it performing at that level. So I think, your observations are valid, but I would say again, that the reduction is very small. And again, I won't talk to the specific dollar or percentage amounts of the decision we made in Victoria, other than to reiterate that it's bang on what we expected and is nominal in its scale. So, that's the situation as it relates to gaming.
On food, yeah, I think a good question as to what's happening with food. I think you, you—what you're definitely continuing to see is this appetite, no pun intended, for the experience of the hotel and the quality that a hotel food experience offers. We're seeing the sales accelerate above the covers a little bit, because obviously you've got a little bit of inflation in the product. We're very, very careful to ensure that we've got the lowest prices in town, and you'll see that reflected in $2-$3 cheaper across parmigiana or rump steak or fish and chips in our pubs, relative to a cohort of around 800 pubs that we check regularly around our own.
So we're very focused on delivering value and quality in food and bars, I might add, in our hotel business, and we think that stands us in really good stead coming into this key trading period.
Just to follow up quickly on that. Would liquor be similar to food, like mid-single digit kind of run rate at the moment within hotels?
Yeah, bar sales are tracking well. Yeah.
Okay, thanks.
Your next question comes from Richard Barwick, from CLSA. Please go ahead.
Good morning, Steve and Kate. Can you-- Following on from that discussion around the, you know, sales and the, and different parts of the hotels business, just occurs to me that you don't disclose the, the Voice of Customer within hotels. I mean, you give some pretty granular detail from the retail business. So can you talk to give us a bit of a sense of that, as to how you're performing and perhaps are, are you considering actually introducing that, that level of disclosure?
Yeah. Thanks, Richard. I think it's a, it's a great and probably a really important question in context of, of the current trading environment and where we go from here. I think we did reference that it had improved, and, and it has. It's not quite the same metric, or gathering of data that we do in the retail business. What we do in hotels is gather, customer feedback from digital platforms like Google Reviews and the like, across both our food and accommodation experiences, and roll that up into a number. And as I say, it's good that it continues to track well. I think we'll, we might come back at a later date and provide a little bit more color on, on how we do it.
But in essence, it's a reference to the food experience and the accommodation experience that we track off those platforms. We're very careful to track customer metrics across both hotels and retail, particularly given the inflationary pressures that both our customers and our PNL has right now. So we wanna make sure that not only are we offering the best value, we're also offering the best service experience, but particularly in an environment where we've had to put so much effort through our Endeavour Go program, in optimizing processes in both stores and hotels. It's critical to stay focused on your customer experience at the same time as you're focusing on your cost management and your process management, so as not to decrease the customer experience whilst you've had to pull labor out of your store or your hotel.
They're very, very important correlated data points that we use to make sure that our customer experience doesn't dip.
How do we get a sense then, Steve, of the... So I take your point exactly. And how do we get a sense of how hotels is performing across, you know, those sort of metrics? And in the context of retail, obviously, you'd be measuring different things because there's different outcomes and so on. But you know, can you, for example, tell us if you think that the hotel's performance on these metrics is doing better or worse than the way you're achieving on retail?
Yeah, yeah. So I'll give you the stat that we use just for your reference. So our Voice of Customer in hotels was 8.63 in the quarter, versus 8.46 in the corresponding quarter a year ago. So you know, I think that's a testament to the efforts of the management of our hotels and the teams in our hotels, being able to find ways to manage their costs in a world where our wages have increased 5.75%, and still be able to offer customers that sort of experience. So that's the stats, just so that you've got them.
Yeah. Okay, that's helpful. Thank you.
Thank you.
Your next question comes from Craig Wolford, from MST Financial. Please go ahead.
... Hi, Steve. Hi, Kate. Just a question if I could, around the hotels, I guess, contribution from acquisitions. So two parts to it. One, the, you know, there were no hotel acquisitions in the quarter. Is that just an aberration, or should we expect some coming through? And in terms of the hotels that were acquired last fiscal year, would you say they were representative? It just feels like they—it looks like on the numbers, that the contribution from those last year acquisitions is at a slightly lower average sales per store than the group average on hotels.
Lower average hotels than the group average? [crosstalk]Potentially.
So yeah. Yeah, they're smaller. Maybe they're smaller hotels or something.
Yeah, that, that's probably the case. But we-- there's, you know, I think the thing to remember in hotels, there's no... I mean, there is a numerical average, but no hotel is average. So, it's a bit hard to sort of take it back the other way. On the question, though, of where we stand on acquisitions. Yeah, there were none in the quarter, as you've observed, and we've communicated. We do have a few on the go at the moment that we're considering, but it is the case that we've said that we're gonna be very prudent all along with our use of capital, and that remains the case.
That probably means in the year we are going to buy, I would expect, considerably less hotels than we did in the prior year, where we did ramp it up. And while we do have a few on the go at the moment, the prospects, I think, of us doing anything like what we did in the last year are, are very low to, to nil. So we're gonna be very, very careful with hotel acquisitions. And when we get together, in December, we wanna give, investors a bit more clarity on how we're improving the existing network and demonstrate where we've got better returns on our capital from investing in our own network rather than expanding it, which is probably more of our focus right now.
We're really pleased with some of the outcomes that we've had in a couple of hotels, which we referenced in the materials as well. We're looking forward to explaining more there because, as I said in response to David's first question, we recognize that we've got some work to do in improving, particularly our hotel network and the returns therefrom, and that's an area of real focus for us right now.
Thanks, Steve.
The next question comes from Lisa Deng from Goldman Sachs. Please go ahead.
Oh, hi, Steve. Hi, Kate. Just a question on retail in online. So we grew 2.8%, but our key competitor grew over 30% during the period. I think you talked a little bit about Dan's still doing double-digit, and Jimmy Brings things down. So does that, by implication, mean that BWS is, like, tracking back a lot? Can you give us, like, an explanation of kind of what's going on there in terms of competitor dynamics, pricing, structural versus cyclical, sort of moving bits? Thank you.
Yeah. Thanks, Lisa. No, no, it's not the case that BWS is going backwards. Both Dan's and BWS grew their e-com in the quarter. I think our e-com is about 4 times the size of our next largest competitor, so that's probably worth acknowledging as well. You know, what's actually happening across our business is that our bricks and mortar sales are really underpinning a lot of our growth right now. You know, when you actually deal back the very high pickup penetration that Dan Murphy's has, you see that we're getting enormously positive utility out of stores. Not to mention the fact that we have the most efficient sales level out of our stores of any operator in the market.
So, that's what's happening in that space. The growth in e-com was off the back of what is already a very, very high base. So that's the way I would think about that one.
Okay, so just to follow up on both Dan's and BWS grew, but Dan's grew double digit. Like, what are we missing then to get the e-com to be only 2.8, like numerically?
Oh, that, that includes the specialty businesses. Yeah, so you have to, you have to back... What we're trying to say is that Jimmy's has got-
Okay.
Some challenges. So when you, when you back out Jimmy's, both BWS and Dan Murphy's grew their e-com.
So most of the AUD 69 million in specialty is Jimmy's, and that's part of the online?
Yeah, it's not most though-
Most of specialty is Jimmy's. Oh, okay.
Not, not most.
Can you tell us how much, roughly, in specialty is Jimmy Brings?
Oh, look, I'm not gonna break it all down on the call today. I'm sure we can provide you a bit more color separately, but it is Jimmy's, Shorty's, Langton's, and our Vinpac and Pinnacle Wholesale Export. So there's quite a lot in that. But, Kate, do you want to make a further comment?
Yeah, Lisa, just for clarity, the specialty business sales dollars is not mostly Jimmy's, but the year-on-year decline in specialty is primarily sitting in e-com channels and therefore-
I see.
-a material drag on that 2 point-
I see.
On that 2.8% number.
Okay, I got it. Thank you.
Your next question comes from Ross Curran from Macquarie. Please go ahead.
Hi, team. I might just go right back to the very start around David's question. Are you up to-
[audio distortion]... more color around the relative performance of Dan's and BWS. Are they both growing at a similar rate, or are you seeing customers prefer the big box stores or the convenience stores at the moment?
Thanks, Ross. Relatively similar, I would say. And I think it kind of goes back to this dichotomy of changing social occasions and the demand for value. So as customers are inclined to shop more frequently with smaller baskets, it probably provides some support to convenience channels or BWS, for example. Whereas we're seeing customers seeking that real value that Dan Murphy's brings. So you've got it happening at both ends of the spectrum. I think it's also important to remember that Dan Murphy's is a real event type of store, so people that are near Dan's use it as their everyday shop, but everybody uses it as their event shop. And that's what distinguishes it from a convenience channel, where it's just the nearest store that I can get to.
One of the benefits, apart from the great service, price, and range that BWS has, is that we've got more of those than any other competitor, so it is the most convenient channel in the market.
Okay, thank you.
Your next question comes from Phil Kimber from E&P Capital. Please go ahead.
Hey, Steven. Kate, I just had a question on hotels. You, you mentioned before to Craig's question that the acquisitions this year will be, probably, you know, not like they were, in a numbers sense compared to last year. So if we think about renewals, and you did 12 in the quarter, should we assume that there'll be a step up relative to the last couple of years in renewals on hotels?
Yeah, thanks, Phil. Look, I think our track record's about 49, 50-odd renewals a year across hotels. That will move around a bit because they're not all created equal, and this is something that we're gonna dip into more detail at our Investor Day on. We talk about the drivers of the hotel, whether that's bars, bistros, gaming, e-comm, retail, et cetera. We know that the more elements of the hotel you touch, the bigger, bigger the returns you get in terms of customer response. So what we'll talk to when we get together in December is the way we're approaching that and what it means for the numbers. But as I said, it historically tracked around that 45-50 mark per annum.
I think our opportunity, and we'll talk more about it, is to deploy our capital back into our network and leverage those returns up, because as we said in that investor material we shared a couple of weeks ago, the returns from hotels do sit below those of our retail and Pinnacle business. But, Kate, can you just add to that?
Sure. Thanks, Phil. I think the important thing for us to note in hotels is that unlike retail, where you can kind of count the returns based on the number of renewals, no hotel is the same as any other, and therefore, the opportunity is very different by hotel. And so rather than look at the number, what we'll be looking at is what's the return on capital we can deploy and what kind of earnings growth can we deliver. And I think we've said before that we're particularly focused in this next phase of rebuilding the renewal pipeline on enhancing the, the multi-revenue drivers of our venues, rather than doing small licks of capital scattered across the network on small improvements.
We're really focused on deploying capital, in light of all of the data we've been able to gather on what our customers are looking for in our venues at a venue-specific level to drive earnings growth across the year.
Great. Thank you. And just, one follow-up on the, specialty business. I just wanna double-check when it sounds like it's the big driver of the percentage change is Jimmy Brings. But I did wanna check when you own some of the external or the external sales from some of the Pinnacle brands, when you buy those businesses, do you get sort of a one-time step down because, you know, other channels, other retailers that might be selling that product, you know, given the change of ownership, you know, stop ordering, and then you rebuild over time? Is that something that goes on or is that not really relevant?
No, it's actually been upside for us, Phil. We've been... the biggest surprise we, we had in that whole, building out of the Paragon Wine Estates portfolio was the Oakridge acquisition, where when we, we brought it into the portfolio, a lot of actually retail customers and certainly on-prem hotel, restaurant customers, were still keen to carry the product. Which I guess is understandable given, you know, it's just again, taking out the number one winery from Halliday's Wine Companion in the last couple of weeks. So I think it, it's, it's-- You can't think of our Pinnacle portfolio as you would a private label portfolio that might exist in others' businesses or a supermarket environment. This is a branded portfolio of products that has real history and a real brand owned by real people.
And the same goes for businesses like Cape Mentelle. In fact, Cape Mentelle has one of the most significant international exposures of any of our brands. And the team, our international export team, are working hard on building on that. So no, it's the case that actually we've been surprised on the upside in relation to those brands, not the contrary.
All right. Thank you.
Thank you.
Your next question comes from Lisa Deng, from Goldman Sachs. Please go ahead.
Oh, hi. Thanks for taking one more. I just wanted to understand a little bit about the opportunity of some adjacencies. So for example, you know, what does the change in potential tariff in China give us in terms of potential opportunity and any challenges on the local cost line?
... You know, what about retail media that we've briefly touched on previously? Like, how should we think about some of these adjacent opportunities, again, in the sort of next six-12 months?
Yeah, thanks, Lisa. Look, on the export and China opportunity, there is that element that I was just talking to Phil about, but we've already got an existing business in our Vinpac bottling business in South Australia, which serves 500 different customers that come to us to have their wine packed, and they buy their labels and their bottles and their capsules, et cetera. And then we have that packaging service. And that historically has run at about 10 million nine-liter cases per annum, and a lot of that was going up into China. So I think there's that existing business that we've got there in South Australia that has that opportunity to take advantage of any pending changes.
Alongside, as I just said, to Phil, the opportunity that we perhaps have with our own brands, and we've got an export team that will seek to take advantage of that in due course. I would note, as I think others have, that it's probably going to be a slow build in the event that the change that people are anticipating does take place in relation to China. But we're right there, and we're keen to participate at both levels, the industry services level and also the actual export of our own brands. Your question on the retail media platform with MixIn is a good one. I think we'll come back, perhaps, at the half with some more information there.
The team has done a really good job in building it, and there's been some really good progress made, particularly with selling advertising across our peak trading period into Christmas. So it's becoming a tighter product, as the team has done such a great job in getting it out there. But we'll definitely come back with some more info after the half's transpired, post-Christmas.
Thank you.
Your next question comes from Q Super. Please go ahead.
Hi, Steve and Kate. My name is Rob from Q Super. Is there any reason why you choose not to report equivalent case volumes for Dan and BWS?
Hi, Rob. When you say case volumes, do you mean separate the trade for those two businesses?
No, I just mean, physical volumes of equivalent cases that you sell through BWS and Dan.
Right, uh-
On an equivalent case basis. You mentioned, in the last answer, you talked about nine-liter equivalent cases.
Ah, sorry. So the nine-liter equivalent cases that I was talking about referred to our Vinpac business. So that's a packaging business that we provide to the wine industry, and they produce. They pack off about 10 million nine-liter cases for various customers, and that sits inside our specialty number that we've been referring to. We don't talk to a nine-liter case equivalent, and it only relates really to the wine category in the retail businesses. So they're quite different businesses. One of them is a wholesale packaging and services business, and the other is a retail business. And so in the retail business, we tend to focus on the total sales and the category shifts that I touched on earlier as it relates to beer, wine, and spirits.
Yep. Yep, I understand that, but, is there any reason why you choose not to report equivalent cases for retail?
It's not generally been our practice. So it's not an industry practice to talk to 9-liter case equivalents for retail, so.
Thank you.
There are no further questions at this time. I will now hand back to Mr. Donohue for closing remarks.
Thanks, everybody, for joining the call today and for your ongoing interest in Endeavour. I appreciate there is a lot of that at the moment, and we look forward to welcoming those of you who are gonna join us tomorrow for our AGM. And certainly, perhaps more importantly, hope to see you in a pub, winery, or bottle shop between now and Christmas. Thanks, everyone.
That does conclude our conference for today. Thank you for participating. You may now disconnect.