Mighty Craft sells Jetty Road/Foghorn, Better Beer on auction block
Mighty Craft’s fourth-quarter financial update has revealed that it has reached an agreement to sell its Jetty Road and Foghorn Breweries, and that the company was in negotiations to sell its stake in Better Beer amidst a cash loss of $5 million for the quarter.
The company reported that it had executed a binding agreement for the sale of 100 per cent of its Jetty Road Brewery, and entered into a non-binding agreement for the sale of 100 per cent of Foghorn Brewery.
That sale is expected to go binding in the first quarter of the current financial year.
No additional details of the sales were provided, though the company said it expected to return $3.5 million from its divestment program that included the two breweries.
The company has also said that it is received interest to purchase its stake in Better Beer. The company said that it is “considering whether a full or partial equity sale is in the best interest of Mighty Craft shareholders”.
Mighty Craft’s financial results showed while Better Beer continues to grow, with wholesale revenue growth of 138 per cent for the financial year, growth slowed in the final quarter to just 18 per cent.
Its a wholly-owned Mismatch brewery saw revenue shrink by 35 per cent for the quarter while Hills Cider also shrank by 19 per cent.
Jetty Road saw revenue shrink by 2 per cent for the quarter.
The company said growth across the second half of the financial year was impacted by “softening in the overall market as cost-of-living pressures and inflation continue to impact consumer spend.”
“Growth across craft beer and gin slowed and while overall spirits growth with steady, there was increasing shift in consumer preference observed to value-based brands,” the company reported.
The company said that Better Beer continues to perform “exceptionally well” selling more than 10 million litres for the financial year, including 2.7 million litres in the final quarter.
“Better Beer continues to resonate with younger consumers seeking a “better for you” alternative, as well as a disruptive brand.”
The company said Better Beer had invested $1.1 million into brand marketing during the quarter.
Mighty Craft’s share price closed at $0.042 on Friday, with a market capitalisation of $15.30 million.