Moa widens FY loss, gets letter of support from shareholders
By Jonathan Underhill May.
27 (BusinessDesk) - Moa Group, the boutique beer maker which
raised $16 million when it went public in 2012, posted a
wider full-year loss and said major shareholders Pioneer
Capital and the Business Bakery have committed to providing
enough financial support to allow the company to keep
operating for at least the year ahead. The net loss was
$5.8 million, or 19.2 cents a share, in the 12 months ended
March 31, from $1.9 million, or 7.3 cents a year earlier,
the Auckland-based company said in a statement. Sales jumped
88 percent to $4.6 million but was outpaced by a 137 percent
jump in cost of sales, trimming gross profit to $792,000
from $848,000. Expenses soared 135 percent to $6.5 million,
as costs of distribution, administration, and sales and
marketing all rose. Moa warned in November that the
full-year loss would be between $5 million and $6 million,
bigger than was projected in the prospectus, with
lower-than-expected sales blamed on problems with its
distributor, which it has now replaced with a more direct
distribution deal. At the time the company said it was
embarking on a strategic review to improve
performance. Yesterday, Moa said it signed a long-term
contract to have much of its beer manufactured by McCashin's
Brewery in Nelson, while higher-margin specialty brews would
be made at its Blenheim site, where expansion has been
bogged down by a protracted resource consent process. While
it initially gained consent top expand its brewery at
Jackson Road, Blenheim, it was subsequently appealed by a
number of parties and Moa has opted to try to resolve the
issues by mediation rather than what it calls "an expensive
appeal process."
Moa had $4.1 million of cash reserves as
at March 31, down from $11.5 million a year earlier and in a
note to its accounts say it is "looking at a range of
financing alternatives and timing to ensure adequate capital
resources are available to support the group's growth plans
and capitalise on opportunities." Pioneer Capital, which
owns 24 percent of the company, and The Business Bakery, on
23 percent, have provided Moa with "a letter of commitment
to provide financial support that the directors believe is
sufficient to allow the group to continue to operate and
meet its obligations for at least the next year," the
company says in its accounts. "The details are still being
determined." Chief executive Geoff Ross, who is also a
director of The Business Bakery and drove the creation of
both 42 Below and Ecoya, now renamed Trilogy International,
said contract brewing at McCashin's adds "significant
brewing capability" for high volume brands. "In short this
gets us the efficiencies of scale without significant
capital investment," Ross said. Moa shares last traded at
62 cents, valuing the company at $18.7 million, about half
the $1.25 sale price in its 2012 initial public
offering. (BusinessDesk)