Moa Brewing’s seventh profitless year
Moa Group says it narrowed its trading loss in the second half of the financial year as it works towards breaking even after seven years of red ink since the beer brewer listed.
The company said it's trading loss was $600,000 in the six months ended March 31, excluding one-off costs, such as the undisclosed bill associated with the $13 million acquisition of hospitality firm Savor Group. That implies Moa will report an annual trading loss of about $2 million, compared to a loss of $2.5 million in the March 2018 year.
Sales were up 15 percent for the year, implying revenue of $12 million compared to the $10.5 million a year earlier. The company said three of the last six months of trading were in profit.
"Moa Brewing Company continues to build toward break-even on a standalone basis, as demonstrated in recent summer months," executive chair Geoff Ross said in a statement.
The company has yet to turn a profit since its controversial listing in late 2012, when it included advertising in its investment statement and photographs of young women in skimpy outfits drinking beer. It sold shares at $1.25 apiece, raising $15 million to expand its Nelson brewery. That expansion was blocked and it outsourced production to nearby McCashin's Brewery.
The beermaker had issues with its then-distributor Treasury Wine Estates the following year, dumping them for failing to meet new targets. After several years of direct distribution, it decided more recently to team up with multi-national Constellation Brands on distribution.
Moa's latest attempt to reinvigorate the business was the acquisition of Savor for $13 million upfront in cash and shares, rising to $21.4 million if earnings targets are met.
The shares recently traded at 38 cents, matching the recent issue price to Savor's vendors.
"Moa Group acquired Savor Group on April 1 - a vertical acquisition of bars and restaurants in Auckland which will more than triple the revenues of the company, and is intended to ensure sustainable future profitability, and provide several synergies," Ross said.
The expanded beermaker and hospitality firm will give an indication of trading for the full group when it formally reports in late May.