Posted on: September 28, 2023, 06:55h.
Last updated on: September 28, 2023, 06:55h.
Bruce Mathieson, Sr. Isn’t pleased with the current state of affairs at Endeavor Group, Australia’s largest hotel and slot machine operator. Given that Mathieson is the company’s largest single shareholder, it’s highly probable that his desire to shake up the executive ranks will be fulfilled.
Mathieson, whose portfolio includes a significant interest in the gaming industry, is demanding a complete restructuring of Endeavor’s board, according to The Sydney Morning Herald. With a 15% ownership stake in the company, he has expressed dissatisfaction with the current leadership, specifically targeting Chairman Peter Hearl and CEO Steve Donohue.
Mathieson has strongly criticized their “disgraceful” leadership decisions, which he believes have resulted in billions of dollars in losses for the company. In order to drive the company towards success, he insists on injecting fresh talent.
Continuing Losses
In its latest financial report, Endeavor revealed a 2.5% increase in group sales, reaching AUD11.9 billion (US$7.58 billion). EBITDA (earnings before interest, taxes, depreciation, and amortization) also rose by 10.7% to AUD1 billion (US$637 million).
However, the company has experienced a significant decline in market capitalization of over AUD4 billion (US$2.54 billion) since ending its partnership with Woolworths in 2021. Additionally, its share price has dropped by 20% over the past year.
Mathieson has expressed major disapproval of the team’s performance under Hearl and Donohue’s leadership, stating that it would be unlikely for anyone in the country to approve of it. He views their decisions as disgraceful and considers many of them to be tragic.
While acknowledging Endeavor’s significant investments, which include various bars, hotels, and gaming machines, Mathieson laments the company’s inferior performance compared to its industry counterparts.
Mathieson has particular dissatisfaction with Endeavor’s introduction of gambling restrictions in Victoria, such as reduced operating hours, implemented ahead of state reforms. He claims that this approach has resulted in significant financial losses for the company.
Endeavor, listed as EDV on the Australian Securities Exchange, reached its highest share price of the year on February 13, trading at AUD7.10 (US$4.52). As of this morning, it is currently trading at AUD5.27 (US$3.36).
Time For New Talent
Mathieson believes he knows what it takes to turn the company around. Bill Wavish, an influential figure in the retail industry, has gained Mathieson’s support as he aims to become an independent director at Endeavor Group.
Wavish, a former Woolworths chief financial officer, is well-known among Endeavor’s upper management. However, his nomination for the position remains uncertain at this time.
Endeavor plans to release details soon regarding its annual general meeting, implying the renomination of Bruce Mathieson Jr. and Rod van Onselen, who currently serve as directors. The board of directors has recommended these nominees for shareholders’ voting approval.
The company has also initiated a plan to appoint two non-executive directors. However, regulatory authorization required to work in the gaming industry is currently being secured.
Wavish has expressed that the existing leadership lacks the necessary expertise to effectively manage the business’s retail and pub sectors. He has also voiced dissatisfaction with Endeavor’s decision to abandon its brand strategy and the rising expenses, including a significant 11% increase in spending in 2023.
If Wavish receives the necessary approvals, Mathieson is in a favorable position to achieve his desires; having his son and van Onselen on the board and in his corner may tip the scales.