Endeavour Group has announced the shock resignation of its Executive Chairman Ari Mervis and confirmed it will consider splitting its retail liquor business from its ALH operations.

In an announcement to the ASX, Endeavour Group said Mervis (above) had resigned as Executive Chairman effective 3 August 2025, “citing disagreements with the Board”, just four months after appointing himself to the role.

Lead Independent Director Duncan Makeig will assume the role of interim Chairman while overseeing the recruitment of a permanent Chair. Makeig has been a Non-Executive Director since June 2021 and has acted as Lead Independent Director since March 2025.

During an analyst and investor conference call Makeig said the conversations that led to Mervis’ resignation would remain confidential, but a source told the Australian Financial Review the board had lost confidence in him.

“The dilly-dally of appointing a new CEO, the entire process was frustrating for the board and getting him back to a non-executive role was also proving to be a problem,” they said.

In the wake of Mervis’ resignation, Makeig said the Board and management were undertaking a “strategy refresh” that will include a portfolio-wide examination of the group’s performance, key business drivers and execution across retail, hotels
and the Pinnacle business “with the clear aim of maximising long-term shareholder value”.

Endeavour Group’s portfolio currently includes 350 hotels and 1700 bottle shops, plus a number wineries.

“It is a very open-ended strategic review and includes all possible outcomes,” Makeig said when asked if the strategy review could result in the separation of the company’s hotels and liquor retailing businesses.

The possibility of splitting Endeavour Group’s assets was first reported by the AFR earlier this year.

“It is a review of the strategy, which makes sense. Everything is on the table,” one person briefed on the matter anonymously told the publication. “It’s ripe for being pulled apart again and sold to private equity.”

According to The Australian the company’s biggest shareholder, the Mathieson family, would welcome the carve up.

“Pokies king Mathieson would favour this as he has long eyed the buyback of the ALH, and now that his other project – casino operator Star – remains in deeper trouble than most anticipated, Endeavour’s pubs and pokies arms would represent a stronger tangible prospect to turn around,” the newspaper reported.

New acting CEO appointed

Kate Beattie has been appointed interim Endeavour Group CEO, effective immediately, until new CEO Jayne Hrdlicka commences in the role on 1 January 2026.

Hrdlicka is currently consulting to the Board and senior management ahead of her commencement date, contributing the equivalent of two days a week on the strategy refresh process.

Beattie has been with the company for for eight years and has been its Chief Financial Officer since 2023. Endeavour Group said it is also intended that the new Chair will be in place before 1 January 2026.

“Kate has worked closely with the management team to ensure that operational performance and momentum is maintained across our business,” Makeig said.

“We are confident in Kate’s ability to continue leading the business as interim CEO through to Jayne’s commencement in January.”

Former Endeavour director Bruce Mathieson Jr told the AFR Hrdlicka should be brought in to run the business as soon as possible.

“One definite that we are very hopeful about, and can’t wait for, is Jayne’s arrival. We’re very, very confident about Jayne when she comes in and gets this thing pointed in the right direction.”

Endeavour Group gives FY25 trading update

During its analyst and investor conference call, Endeavour Group gave a trading update, revealing FY25 sales are expected to be $12.06 billion. Group FY25 statutory net profit after tax is expected to be between $420 million and $425 million, down from $512 million in FY24.

The FY24 results were impacted by a challenging trading environment and a softening consumer environment. 

The group’s statutory net profit after tax result includes the impact of a number of one-off items incurred in H2 FY25, including restructuring and redundancy costs and an impairment relating to the closure of the group’s Prowine bottling facility.

The company said further details would be provided in its FY25 full-year financial results presentation on 25 August 2025.

What the analysts are saying

Bank of America analyst David Errington said it would be problematic for Hrdlicka to continue consulting to the Board on a part-time basis.

“You can’t expect us as shareholders to think that a future CEO who’s consulting to the board two days a week is acceptable,” he said.

“I just don’t know what’s going on in Endeavour. I’ve never seen a situation like this in my life where a company just doesn’t have a clear direction if you like over a lengthy period of time.”

He added to the AFR: “Listening to the company and watching you over the last 12 months, right now, there’s a distinct lack of accountability. I don’t know who’s running the company. There’s an interim chair, there’s an interim CEO, there’s an interim consulting future CEO. I don’t know who’s accountable for the first-half result.

“I don’t know who’s accountable for the strategy. I’m just really concerned that this company – and I don’t want to use terrible words – but the company just seems to be rudderless, and it’s been rudderless for a little while.”

Bell Potter has retained a “hold” recommendation on Endeavour Group shares, which closed yesterday at $4.16. The broker has a 12-month price target on Endeavour Group shares of $4.50, a modest 8.2% uplift.

It sees some potential for liquor sales to improve if interest rates fall and encourage more consumer spending. However the broker anticipates profit margins will come under pressure, particularly in FY26, due to increased competition from Liquorland.

“While trading at an historically low 12x EBIT / 15x PE and a 25% discount to COL, we see this as warranted given: Gross margin pressures; sticky wage inflation; implementation risks around the One Endeavour program; upcoming management change with a potential strategy pivot; and the possibility of a retightening in the EGM regulatory environment,” Bell Potter said.