Independent Liquor puts Mill on the block to focus on brands

Friday 26th June 2015

Independent Liquor (NZ), the liquor company owned by Japan's Asahi Group, has put its Mill Retail Holdings chain of liquor stores up for sale after just two years to focus on building its beverage brands business.

Since buying the retail network for $18.2 million in 2013, Papakura based Independent has transformed it from a discount liquor group to a mainstream retailer, the company said in an emailed statement. With the store transformation underway, Independent has put the Mill business up for sale to focus on its branded beverages, such as Boundary Road beer and pre-mixes, including Woodstock Bourbon and Vodka Cruisers.

“While no decision regarding a sale of The Mill has been made at this point, discussions are under way and Independent Liquor has received keen interest from a number of potential buyers,” said Scott Hadley, chief commercial officer, alcohol, for Asahi Beverages, Australia and New Zealand.

Independent wrote down the value of The Mill's goodwill by $6.2 million and its brands by $2 million in the 2014 financial year, leaving the unit with assets worth $15.1 million and liabilities of $9.2 million, according to financial statements lodged with the Companies Office. The statements say Independent's management decided to sell the unit in December last year, with a sale expected by September.

The liquor group's Boundary Road brand claims 11 percent of pack beer sales, while its suite of ready to drink beverages hold 60 percent of that market, according to Independent's website.

Independent reported a loss of $52.6 million in calendar 2014, widening from a loss of $41.6 million a year earlier, as $255.1 million of impairment charges offset a $208.6 million gain from former owners Pacific Equity Partners and Unitas Capital to settle Asahi's claim that it overpaid for the business.

Independent boosted revenue 5.8 percent to $378.3 million, a slower pace of growth than its cost of sales, meaning gross margins shrank to 24.2 percent from 24.7 percent in 2013.

Independent cut its sales and marketing spend by 16 percent to $33.9 million, while ramping up spending on administration by 34 percent to 30.1 million. Finance costs, which are largely to related parties, edged up 1.6 percent to $19.6 million.

BusinessDesk.co.nz

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