Viva Energy has reported its FY2024 results, with a 5 per cent increase in EBITDA to $748.6 million, driven by strong growth in its Commercial and Industrial (C&I) segment.
However, the company’s Convenience and Mobility (C&M) division has faced challenges, impacted by cost-of-living pressures and a decline in tobacco sales, with overall convenience sales declining by 4 per cent. Though, excluding tobacco, convenience and QSR sales increased by 2 per cent and convenience gross margin improved to 38.8 per cent.
Scott Wyatt, CEO and Managing Director of Viva, acknowledged the difficulties but expressed confidence in the company’s long-term retail strategy.
“Notwithstanding these challenges, I am pleased with the progress we have made on transforming our business over the last year.”
Viva Energy has made significant moves in the convenience sector, completing the acquisition of OTR Group and receiving regulatory approvals for the Liberty Convenience acquisition. Early results from the conversion of Express stores to OTR branding have been promising, with strong sales and earnings uplift.
The company plans to add 40 to 60 OTR stores in 2025 through conversions and new openings. While the store conversion process has been slower than anticipated due to town planning delays, Viva has a large number of applications underway which will drive its efforts in the year ahead.
The integration of OTR Group is expected to deliver more than $90 million in annual synergies by 2026. This will be achieved through transitioning fuel supply to Viva Energy, rationalising supplier terms, and reducing overhead costs across the combined Express and OTR businesses. The company is also accelerating cost-saving measures, aiming to cut $50 million in operating expenses in the second half of 2025.
Viva Energy expects to complete its acquisition of Liberty Convenience by 31 March 2025, following approvals from the ACCC and FIRB. The acquisition will add 92 operating sites and five planned locations, with a net cash consideration of approximately $115 million. Liberty Convenience generated $36 million in EBITDA in 2024, and its regional focus is expected to complement Viva Energy’s broader retail network.
While the retail environment remains challenging, Wyatt is optimistic about the company’s future.
“We expect synergies, overhead cost reductions, and a lower inflation environment to drive earnings growth in the second half of the year with store conversions increasingly driving growth into 2026.”
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