Moa shares crash 28% on sales warning
Moa Group is the worst performing stock on New Zealand's benchmark index, dropping to a record low, after the boutique beer maker said it will miss its 2014 sales forecasts as volumes sold in New Zealand and Australia lag expectations.
Shares [NZX:MOA] slumped as low as 80 cents, and recently traded at 85 cents, dropped 28 percent on the day - slicing its market cap to $25.5 million. [UPDATE: In late trading, shares had recovered to close 22.03% down for the day at 92c]
Four months into the 2014 financial year, Moa expects to miss its full-year target of 195,000 cases by 30 percent, largely due to a shortfall in the New Zealand market where it is negotiating a new distribution model, the Auckland-based company said in a statement.
"It's quite a big shock because it is a large decrease in what their guidance was and the market has reacted very badly to the announcement," said Grant Williamson, a director at Hamilton Hindin Greene. "It is quite an illiquid stock so movements can be exaggerated somewhat but probably the decline is warranted given the very disappointing sales figures."
Moa, headed by the founder of vodka maker 42Below Geoff Ross, has bought its Australian sales agency rights and intends to manage that business directly after sales volumes lagged forecasts, the company said. Meanwhile, the US and other global markets are performing in line with volume expectations, the company said.
"They are taking action, they are looking at distribution and they are making changes," said Hamilton Hindin Greene's Williamson. "Geoff Ross has a very good history of growing these types of early start companies so I think there obviously is room for a lot of improvement.
"You would hope the company can turn things around from here but it is going to be a relatively long process," Williamson said. "You wouldn't expect too much improvement in that share price until there is a clear sign that they have got sales growth on the right track."