By Gavin Evans
Nov. 13 (BusinessDesk) - Brewer Moa Group is expecting to be close to break-even in the six months through March on the back of strong recent sales growth and a seasonal lift in volumes during the summer.
The company says the underlying growth rate for Moa brands was more than 20 percent in the six months through September and the company also expects to report an “improvement” in earnings for the period - in other words, that the loss won't be so bad.
Executive chair Geoff Ross said the firm’s core strategies are in play for the key summer season.
“We feel we are in a strong position,” he said in a statement filed with NZX. “Our core business has some great momentum of late which we plan to build on this summer. On the back of this growth and the summer lift, Moa expects the second half of this year to be near break-even.”
Auckland-based Moa was founded in 2003. It has reported losses consistently since listing in November 2012 after an initial public offering at $1.25 a share that raised $15 million.
In May the firm raised an additional $1.92 million. That month the firm reported full-year revenue of $10.45 million and a loss of $2.55 million, with both figures up slightly on the previous year.
Ross today noted the firm’s reported half-year revenue will likely show only a minor increase from last year, due to the firm halting distribution of Parrot Dog product late last year.
Moa shares rose 2.4 percent to 42 cents today, trimming their loss so far this year to about 12 percent.
Ross said the firm is “very encouraged” by results from the firm’s six-month old New Zealand sales and distribution venture with Constellation Brands.
The venture, and new products, have seen the firm’s sales through grocery chains increase 25 percent, according to the latest quarterly data from AC Nielsen. That is up from a six-month growth rate of 16 percent, Ross said.
“Moa is now experiencing the strongest growth of the top four craft brands at a rate three times the craft beer category,” he said.
Ross said increased volumes and greater efficiencies are enabling the company to reduce costs in materials and packaging. It has also recently moved more of the company’s higher volume brews to third party brewers with more efficient equipment to reduce cost.
Bars and restaurants are important places to build the firms brand, he said, noting the new strategic waterfront venue the firm recently secured in Auckland. Moa will be the exclusive craft beer and cider at the 10-restaurant venue where it will be working with one of New Zealand’s top hospitality companies.
“We are excited about the prospect of further opportunities. We are working on two further large hospitality deals to close before the end of the calendar year.”