Independent Liquor (NZ), whose Japanese owner Asahi is locked in a court battle over the $1.5 billion price tag it paid for the booze empire, narrowed its loss in 2013, while writing down the value of the business even further, in a year where it spent $18.2 million to extend its reach into retailing.
The Papakura-based company reported a loss of $41.6 million in calendar 2013, down from the $117.9 million loss a year earlier, according to financial statements filed with the Companies Office. Revenue dropped 13 percent to $357.4 million, and the liquor company took a $24.5 million impairment charge on goodwill, adding to the writedown in 2012 of $138 million. As at Dec 31, the group's intangible assets were valued at $292.5 million, down from $324.6 million a year earlier. That includes $6.2 million of goodwill from its acquisition of The Mill Retail Holdings.
Asahi bought Independent Liquor, trading as Flavoured Beverages Group Holdings, in 2011 when it was on a spending spree, having built up a US$4.9 billion war chest. It has since filed papers in the Federal Court in Melbourne against vendors Pacific Equity Partners, Unitas Capital, certain funds controlled by the two firms, management services companies for the firms, and certain directors of both private equity companies, claiming it was misled over Independent's earnings and overpaid as a result.
Independent Liquor recognised the legal proceedings as an unquantified,contingent asset in the 2013 accounts.
The liquor company bought the 35-store Mill retail chain last year for $18.2 million, which it has previously said would operate as a standalone business.
The expansion into retail came after Independent Liquor launched its boutique beer brand, Boundary Road, in 2011 to add to its dominance in the local ready-to-drink market, with brands including Woodstock Bourbon and Vodka Cruisers.
Independent Liquor ramped up spending on sales and marketing in 2013, with expenses up 16 percent to $40.5 million. Distribution expenses increased 3.7 percent to $13.9 million and manufacturing overheads rose 25 percent to $16.1 million. Administration expenses were cut by 31 percent to $22.4 million.