Good Drinks hails progress despite hospitality disruption
Good Drinks Australia, owner of Gage Roads Brew Co., reported a strong year and highlighted on-target growth in the face of industry-wide disruptions.
Full-year results were posted to the ASX this week, hailing the 16 per cent annual growth of its own-brands as outperforming the beer market.
Total revenue increased 30 per cent to $70.7 million, as annual production volumes rose 13 per cent to 19.3 million litres.
However, earnings before interest, tax, depreciation and amortisation (EBITDA) declined 22 per cent for the year to $8.4 million. Good Drinks said that this was a good result “given industry-wide disruption in hospitality and key trading periods”.
The ASX-listed beverages business suggested that fewer drinking occasions in December and “lower replenishments” in January and February led to reduced customer pull-through.
Second-half on-premise sales were impacted by capacity limits, mask mandates, staff shortages and reduced trade overall, the company said.
These trading conditions led to competitor pricing pressure, which Good Drinks said it met while continuing to grow brands and achieving its $3 per litre revenue aims.
Contract brewed volume grew 7 per cent to 6.1 million litres, as did sales across all channels. National chain sales grew 16 per cent to 4.3 million litres, draught rose to 4.9 million litres, up 25 per cent. Collectively, Good Drinks brand volumes grew to 13.2 million, above the 12-million-litre target it set.
Contract brewing will reduce “significantly” in line with its strategies, the company said.
The ASX-listed business also increased sales and marketing spending to $13.4 million.
Gage Roads Freo venue opened during the year, contributing $1 million to full-year earnings, while its Atomic Redfern venue is described as trading profitably, but losses incurred during restricted trading resulted in a breakeven for the full year.
Gage Roads also launched a non-alcoholic XPA into its core range with another addition set for a summer launch, whilst Matso’s introduced two new core brands, in addition to a proposed redevelopment of the brand’s new Queensland site earmarked for 2023.
The outlook for 2023 looks positive, Good Drinks indicated, with uninterrupted hospitality and retail channels and a return to ‘normal’ trading conditions.
Good Drinks Australia (ASX:GDA) share price sat at $0.74 at the time of writing, giving the business a market capitalisation of $95 million.
Hear more about Gage Roads Freo on the Beer is a Conversation podcast with the venue’s head brewer Simone Clements.