Strong Fourth Quarter Performance: Gage Roads Brewing Co Limited’s (ASX: GRB) stock rallied up 13.6 per cent on July 25, 2018 after the company delivered very strong fourth quarter FY18 results. GRB in the fourth quarter 2018 has posted remarkable growth of 4% in the sales of the brands compared to the previous corresponding year (pcp). Primarily, the growth in the sales is driven by 173% increase in sales to the independent retail channel and 145% increase in draught keg sales, which was partially driven by the keg sales to Optus Stadium during the fourth quarter. However, sales to the national retail chains were down by 15% against Q4 FY17 as it contained a one-off stock build into the retailers which impacted replenishment sales Q1 FY18.
During the quarter, the company announced that it will acquire 100% of Matso’s Broome Brewing Pty Ltd which will provide a step-change for the 5-year proprietary brand strategy. At its core business, this strategy seeks to deliver improvement in margins and sustainable earnings growth through the move in sales mix towards higher-margin Gage Roads owned products. The objective of this deal is to provide an opportunity to leverage its existing national sales, marketing and distribution capability and deliver sustained earnings growth, highlighting the value created for Gage Roads through expanded national sales and marketing team. The Company is in the process of finalising formal documentation and satisfying conditions precedent and expects to complete the transaction in Q1 FY19.
Gage Roads Brewing Co Limited traded at a market price of $0.125 with the market capitalization of circa $ 111.27 Mn (AEST: 03:40 P.M.)[pluginops_form template_id='23834' ]
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