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Moa shares soar after meeting sales guidance

Shares in Moa Group [NZX: MOA] soared to a three-week high after the beer maker said it met a sales target, which it was forced to cut last year when switching its local distribution.

The shares jumped 19 percent to 63 cents after the Auckland-based company said it sold 3.67 million bottles in the year ended March 31, and will announce its formal result on May 27. In December it forecast a full-year loss of between $5 million and $6 million, at least twice the expected loss of $2.5 million in its 2013 prospectus.

The stock slumped last year when sales volumes missed forecast, something Moa blamed on its now-dumped distributor, Treasury Wine Estates, for failing to deliver on the agreed targets.

Moa is using a contract brewing facility to cope with increased volumes as it goes through a resource consent appeal process to build a bigger brewery.

Last year the company's board said it will embark on a strategic review to "improve the overall profitability and viability of the business model in each of its markets and in terms of its manufacturing capability, both for the immediate and medium terms."

It expects to complete the review once the decision on the new brewery is finalised.

(BusinessDesk)

Comments and questions
6

It's a sad state of affairs when just meeting your downwardly revised guidance means an 18% lift in share price.

It has met its sales target on volume but what prices has it achieved?

I have not purchased Moa beer until recently. I drink craft beer but Moa has generally been too expensive by comparison.

It has now become cheaper in the supermarkets. For exmple, Moa Original is now the same price (and has sometimes been cheaper) as Heineken, Steinlager.

This hardly justifies its "premium brand".

So achieving its targets for volume is one thing, what was the revenue generated?

Good question. I find Geoff Ross' press releases to be marketing led, rather than fact-led. The market has lost a certain amount of patience for this approach.

Dead cat bounce for a penny dreadful

i bet the contract bottler is having a field day on increasing the costs to bottle. i doubt the new "proposed" facility will ever get off the ground - the surrounding wineries etc will oppose it all the way like they have to date. by the time it may get going (if ever) the funds raised will have funded all the loses - craft beer is very simple to describe - there is NO such thing as a loyal customer like a main stay - say like Heineken - reason being is craft beer is about trying different tastes so why would any customer stay loyal. This really has to be one of the worst thought out strategies in the beer market. Trying to be 42 below of beer is just a disaster ....... just saying. The Moa will be extinct twice..... and that will be a first!

Craft beer drinkers are a fickle lot and to build a loyalty base around one brand I personally think is nigh on impossible.

I also am of the view that Geoff Ross has a credibilty issue with investors in that he over promised and under delivered.

And it gets worse in my humble opinion with his forward sales and cost predictions being so far out of kilter with reality.

Share watcher above puts it very aptly in regards to his comments.

I couldn't class it as a Premium beer. Like Lord Donkey I think strategically the whole exercise of the float, marketing, distribution has been a disaster.