Wednesday 25th September 2019
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Moa Group is banking on beers sold in bars and eateries to help it move into the black, and will now look at other categories beyond craft products.
The unprofitable brewer-turned-restaurant-owner has done a licensing deal to bring Melbourne’s MoVida Tapa’s to the Auckland Fish Market and will introduce Lobster & Tap, a lobster roll and beer store concept to the supercity this summer.
Selling beer at the supermarket isn’t a magic bullet and doesn’t drive gross margin, Moa chair Geoff Ross told shareholders at the company’s annual meeting yesterday.
Having purchased the Savor Group hospitality chain after last year’s balance date, Moa is forecasting revenue of more than $40 million and earnings before interest, tax, depreciation and amortisation of $3.6 million for the year ending March 2020.
The company’s full-year loss reported in May was almost $3 million, widened from $2.55 million the previous year. Sales increased by almost 16 percent to $15.9 million, but all costs other than administration also rose.
Moa has a 27 percent market share of grocery store craft beer sales in New Zealand behind major players DB’s Monteiths and Lion’s Mac’s. Their beers are in pubs and restaurants, Ross noted, adding that “brands are built in on-premise.”
The brewer is eyeing opportunities through pouring tap beer at its restaurants because margins are better and being in the pub gives better brand awareness, Ross said. However, Ross said Moa’s restaurants wouldn’t exclusively sell Moa beer. For example, at its flagship bar, The Wreck, it made up 30 percent of tap beer sales alongside brands such as Asahi and Peroni.
As well as Savor, Moa Group has purchased Non Solo Pizza which it says is the biggest pourer of Peroni beer in the country. Hospitality chief executive Lucien Law, a new director, told shareholders that the 150-seat venue was underused as an event venue and the company would capitalise on that.
A former ad man like Ross, Law was one of two new faces to address shareholders yesterday. Stephen Smith, who heads the brewing department and became chief executive in May, also spoke.
The former Lion marketing executive said Moa was willing to sacrifice growth for margins, concentrating on higher-margin products such as cans, which are cheaper and take up less space in boxes, saving freight costs.
Ross was light on details but said Moa was considering other mainstream beers such as lager, as well as tap wines and non-alcoholic drinks.
Asked by shareholders about a dividend, Ross said it was “deliberately a growth company and even though we are going to make a profit we are going to reinvest.” The company went public in 2012 at $1.25 per share. Its stock last traded at 33 cents, down about 37 percent this year.
Moa’s executives promised shareholder specials and discounts at its restaurant portfolio, following suggestions from shareholders.
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