Brewer posts $5.8 million loss, but chief executive says distribution change is boosting sales.
Moa Group has turned a corner following a sales slump last year, with a new distribution model driving increased revenue, says chief executive Geoff Ross.
The craft beer brewer reported a net loss of $5.8 million for the 12 months to March 31, up from a $1.9 million loss a year earlier but within the guidance of $5 million to $6 million provided in November.
Moa forecast a loss of $2.5 million for the period in its 2012 listing prospectus, but was forced to scrap many of the projections published in the document following a drop in New Zealand sales - which the company blamed on its former distributor, Treasury Wine Estates - and its subsequent move to a new distribution model. The company said yesterday that sales volumes increased from 40,000 cases in the first six months of the last financial year to 96,300 cases in the second half.
Ross said some of that increase was the result of seasonality - the Christmas period is included in the second half.
But it was largely a result of the new distribution model, he said, which has moved responsibility for sales to internal Moa staff while warehousing and logistics are now provided by wholesaler Tasman Allied Liquor. "A corner has been turned," he said.
Revenue for the year was $4.6 million, up from $2.4 million a year earlier, Moa said.
New Zealand sales rose 42 per cent to $2.7 million, while Australian sales lifted 160 per cent to $562,000. Revenue in the US rose from $87,000 in the previous year to $771,000, while sales in other markets increased from $197,000 to $575,000.
The company - which raised $16 million in its 2012 sharemarket listing - had cash reserves at March 31 of $4.1 million, down from $11.5 million a year earlier.
Chairman Grant Baker said Moa's major shareholders, the Business Bakery and Pioneer Capital, had given their commitment to provide the financial support required for the brewer to continue its growth plans.
"The company is looking at a range of financing alternatives and timing, and we will keep the market abreast of plans as soon as they are finalised," Baker said.
Ross said it was too early to comment on whether Moa would have to carry out a capital raising. "That's not on the consideration set at the moment."
Losses were expected to decrease given the strengthened sales momentum the company was now experiencing, Ross added. He said the Australasian beer market was changing rapidly. "There is a race on to become the dominant craft player, with [retail scan] data confirming we are now moving the fastest."
New Zealand craft brands Stoke and Tuatara were two of Moa's strongest competitors in that race, Ross said. Moa shares closed down 11.3 per cent yesterday at 55c.