Moa shares slide to new low after reporting 1H loss of $3.04M

Shares in Moa Group [NZX: MOA] fell to a new low after the beer brewer reported a first-half loss of in a period where it expects to bear the brunt of switching its New Zealand distributor.

The Auckland-based company reported a net loss of $3.04 million, or 10.1 cents per share, in the six months ended Sept. 30, and affirmed guidance its full-year loss will be between $5 million and $6 million, at least twice the forecast loss of $2.5 million in its 2013 prospectus.

Revenue was $1.44 million, and Moa's gross margin more than halved to about 14 percent in the period from 35 percent in the six months ended March 31, after its sales volumes missed forecasts, something it blamed on its now-dumped distributor, Treasury Wine Estates, for failing to deliver on the agreed targets.

Moa's shares dropped 4.4 percent to 65 cents in trading today, the lowest since it listed last year in an initial public offering at a $1.25 sale price. That values the company at $19.6 million.

"The six month result bore the brunt of the change in the distribution model, including the lack of performance that triggered the change, the lack of sales during the change period and the need to buy back stock," Moa said in a statement.

"As signalled, gross margin performance was particularly low at $0.2 million, resulting from too much emphasis on lower margin, unrealised economies of scale and the effects of distribution transition," it said.

Earlier this month 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," and it today said it will brief shareholders with new plans and a market update before Christmas.

Moa's operating cash outflow was $2.7 million in the half, leaving it with cash and equivalents of $8 million as at Sept. 30. It raised $16 million in a public offer last year.

The brewer recognised a $165,000 provision on a bank guarantee it provided for the restaurant and bar venture it set up in San Francisco to boost its profile during New Zealand's unsuccessful America's Cup bid.


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