Mighty Craft takes bigger stake in Jetty Road
Mighty Craft, formerly Founders First, is growing its ownership of Melbourne’s Jetty Road Brewery as it looks to develop it into a national brand.
The rights issue will take its fully diluted ownership to 67.9 per cent, and if all notes are converted, this will equate to 72.7 per cent. The issue values the business, founded by Grant Rodgers Blake Bowden in 2017, at $7 million.
Mighty Craft had already increased its stake in the business in March this year, from 55 per cent to 64 per cent of the business.
In the announcement to the ASX, Mighty Craft explained that Jetty Road’s ‘top line’ grew by 38 per cent in its 2020 financial year, reporting $4.2 million in sales, despite the impact of COVID. Wholesale grew by a reported 228 per cent in the period.
It is expecting sales to reach approximately $6 million in the current year, and said that Jetty Road “has potential to become a significant national craft brand”.
The total cash investment will be $1 million as the balance will be existing debt held by Mighty Craft converting to equity. The funds will be used to accelerate growth and develop its Dromana and Lorne venues.
Jetty Road is ranged wholesale in Victoria New South Wales and Queensland, but there are also plans to extend its sales reach across the country,
Mighty Craft has been involved with Jetty Road since 2017 and helped fund the Mornington Peninsula’s second venue which was set for South Melbourne, announced in 2019.
However, in a major strategic move last month, Might Craft announced that these $3.5 million plans would be scrapped, and a new venue is being launched in the Victorian coastal town of Lorne, on the Great Ocean Road.
The move follows the announcement that Might Craft had the option to acquire a majority stake in Brisbane’s Slipstream Brewing Co. as it looks to grow its stakes in some of the portfolio’s ‘best performing’ breweries.
Mighty Craft managing director Mark Haysman said that Jetty Road is a “high growth brand” which has the potential to become a major player in the Australian craft beer industry.
“Jetty Road is a highly-awarded beer brand, having received a gold medal in the recent IBA Indie Awards for the brewery’s Pale Ale and a silver medal for its Draught IPA along with five bronze medals.
“The next 12 months are critical as we increase investment off the back of COVID and accelerate the path to profit.”