Moa signs long-term brewing deal with McCashin's as expansion talks continue
Moa Group [NZX: MOA], the boutique beer maker scheduled to report annual earnings tomorrow, has signed a long-term brewing contract with McCashin's Brewery in Nelson amid protracted negotiations to expand capacity at its own facility in Blenheim.
The Auckland-based company has extended its contract brewing arrangement with McCashin's for an unspecified time, and will use some of Moa's own equipment, it said in a statement. High-end specialty brews will continue to be produced at Moa's Blenheim site, and volume brews at the McCashin's brewery. The deal fills the gap left by Moa's protracted resource consent application to expand the Blenheim brewery, and the company said it is in private mediation talks for a modest increase in capacity at the site.
"We get the brewing scale we require, in a timely fashion and without significant demands on capital expenditure," chief executive Geoff Ross said. "I am confident that we will achieve a satisfactory resolution to the mediation this year."
Moa raised $16 million in a 2012 initial public offer, of which it expected $6.1 million would be spent on expanding the brewery.
The shares fell 1.6 percent to 61 cents, and have shed 3.1 percent this year. 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.
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.