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Acquisition costs push Moa to $3 mln loss

Thursday 30th May 2019

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Brewer Moa Group reported a full-year loss of almost $3 million, with business acquisition expenses driving an 11 percent increase in costs.

The firm, forecasting profit in the current year following its purchase of Savor Group, saw its March-year loss widen to $2.98 million from $2.55 million a year earlier.

Sales increased by almost 16 percent to $15.9 million, but all costs other than administration also rose.

The operating loss, excluding $134,000 of impairments and $435,000 of acquisition costs, improved marginally to $1.99 million. Moa’s net operating cash outflow doubled to $3.57 million.

Auditor KPMG noted the firm’s reliance on complying with its financial covenants to continue operating and the material uncertainty that exists as to the firm remaining a going concern.

Moa acquired bar and restaurant group Savor on April 1 for $13 million upfront, rising to $21.4 million if earnings targets are met. It borrowed $5.5 million from BNZ and also raised a further $4.7 million through a share placement and rights offer.

Executive chairman Geoff Ross cited the firm’s “topline momentum” during the past year as the company enters into a "new vertical phase” with Savor.

He says the acquisition will boost group revenue to more than $40 million and “more importantly into profitability in FY20.”

Moa shares were unchanged at 42 cents, having fallen about 15 percent the past year.

The firm, which had almost $2.6 million of cash on its books at March 31, has so far accumulated losses of $24.06 million.

(BusinessDesk)

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