Gage Rds enjoying margin boost

Despite a decline in sales, Gage Roads Brewing has achieved a more than 100 per cent increase in earnings for the quarter ended September 30.

The brewer’s sales were down 12 per cent on the previous corresponding period, with sales from contract brewing division Australian Quality Beverages (AQB) declining 33 per cent on last year, a result the company said looked worse than it actually was.

“It should be noted that the [previous corresponding period] had unseasonably high sales as the business was restoring a one-off depletion to customer stock levels during that time,” Gage Roads said.

“In addition, this year, due to a price increase effective 1 July 2015 a number of our customers brought forward orders into Q4 FY15 that would have otherwise been fulfilled during Q1 FY16.”

However, the company said EBITDA was up more than 100 per cent off the back ofimproved operating efficiencies and a 240 per cent increasein sales ofits proprietary brands, the most profitable segment of its portfolio.

“This is a strong indicator that the marketing and branding efforts that we are applying to the company’s brands are showing early success,” Gage Roads said.

“The rebranding of our proprietary products was a major strategic milestone and is expected to make a significant contribution to the company’s growth expectations.

“Draught sales have also improved by 469 per cent as the company’s on-premise strategy achieves good traction,” it said.

Managing director John Hoedemaker said: “Whilst we expect to develop and achieve incremental sales during the year, through both our Australian Quality Beverages contract division, export opportunities and through new proprietary product and line extension opportunities, we are taking a more considered approach in FY16, targeting tactical opportunities that present both strong margins and category growth.”

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