Good Drinks announces strong first quarter
ASX-listed Good Drinks Australia, owner of Gage Roads Brew Co., has reported strong first-quarter growth and a bullish forecast for the next quarter.
In an investor briefing, the company reported revenue growth of 157 per cent, with its own brands growing at 11 per cent, citing IRI data that showed it outperformed the Australian beer market, which declined by 9.4 per cent on a MAT basis.
Good Drinks said that its arrangements with Molson Coors and Magners Cider has ‘opened doors’ for the business nationally, leading to a doubling of distributions nationally to 25,000. The agency brands contributed to national distribution growth of 104 per cent, which the company said provided opportunities for incremental own-brand sales to new customers.
Contrasting with Cooper’s recent results which showed a decline in keg sales, Good Drinks reported strong sales growth, increasing at 31 per cent for the quarter.
Good Drinks, which was previously part-owned by Woolworths and produces a number of brands for the company’s Pinnacle brands, saw reduced contract brewing that it said was ‘in line with expectations’.
The company said the recently opened Fremantle brewpub’s earnings have ‘exceeded expectations’ and is expected to make a contribution in excess of $4 million to the company’s FY23 bottom line.
Redfern’s Atomic venue is profitable, with hospitality conditions improving in NSW. Its Queensland expansion via its Matso’s brand is progressing through council planning and is expected to open in the 2024 financial year.
Victoria’s Stomping Ground Brewery, which Good Drinks announced it had acquired in August, are yet to flow through to the results.
Good Drinks said it had secured land adjoining its current brewery in Palmyra with plans to expand its capacity to 30 million litres, up from its current capacity of 20 million litres with actual production expected to reach 16 million litres this financial year.
The company said it was expecting short-term compression of its margins this half. It cited increased competition and the need to grow market share and inflation pressures. It said that it expected a a stronger second half compared to last year, and planned to deliver higher earnings and shareholder value in FY23.
Despite a series of positive results, Good Drinks’ share price is down more than 20 per cent this year. Its shares are currently trading at $0.715, up two per cent on the days trade.