Gage Roads Brewing Co has reported a 147 per cent increase in net profit after tax for the first half of the 2015-16 financial year (FY16).
Sales of Gage Roads’ proprietary brands improved 132 per cent over the same period last year and were a significant contributor to the improved earnings result, the company said.
“It is particularly pleasing to see that the company’s strategy to invest in its proprietary brands is proving successful at this early stage and that the sales have exceeded our internal expectations,” Gage Roads said.
However, the result was against the weak comparator of H1 FY15, when sales of the proprietary brands declined by 19 per cent after they failed to achieve full ranging and distribution during the leadup to Christmas 2014.
During the first half of FY16, Atomic Pale Ale exceeded 100,000 cases per annum on a moving annual total basis, which Gage Roads said makes it one of the highest selling beers in the Pale Ale category in Australia.
“This is a considerable result considering the company’s current distribution extends to less than half of the available beer market,” Gage Roads said.
“Similarly, our Single Fin Summer Ale has been enormously popular and has proven to be a fantastic addition to our portfolio.
“The continued success and growth of the company’s proprietary brands provides an opportunity for the business to explore strategies to take these brands to new channels to market.”
Sales made from Gage Roads’ contract brewing division, Australian Quality Beverages, declined by 32 per cent over the previous corresponding period.
“This is reflective of a market-wide decline of mainstream, commercial-style beers,” Gage Roads said.
“The business’s contract-brewed mainstream products have experienced increased competitive pressures as the larger Australian brand owners seek to maintain volumes via targeting increased market share in a declining market.
“Consequently, Gage Road’s broader strategy sees the business unwinding its reliance on these types of commercial beers over time as we deliver growth in our proprietary product portfolio and other higher margin contract brewed products.”