Gage Road Brew Co.’s parent company Good Drinks has seen strong full-year financial results as it looks to develop its venue strategy.
Unaudited results for the year to June 2021 show that the ASX-listed beverage company generated revenue of $54.4 million, up from $36.8 million in its full audited accounts last year.
Its hospitality operations made $2.8 million, including the Atomic Beer project in NSW which opened in September 2020, although overall the hospitality arm made a statutory EBITDA loss of $100,000.
This was balanced by core operations, bringing total EBITDA to $10.7 million for the year, up from $600,000 it recorded in FY2020. It also undertook a $5.2 million institutional placement last July to strengthen its balance sheet.
Good Drinks said it was actively investigating additional venues in Queensland and New South Wales, with the aim of creating up to five local brewery and taproom experiences in key markets. It also highlighted the opportunity for “potential acquisitions” in the east.
The results come following a major year for the brand, in which announced it would be opening a flagship Gage Roads Brew Co. venue next year.
Good Drinks secured $12.5 million to primarily fund this expansion. At the time of the announcement, managing director John Hoedemaker said the facility it arranged with Commonwealth Bank would allow it to fully fund the flagship $10 million A-Shed development in Fremantle.
“[It will] also provide sufficient capital (along with cashflow generated from operations) to pursue and execute additional venue opportunities in key markets on the east coast.”
Chasing volume growth
In terms of litreage, Good Drinks brands were up across the board, even ‘brand in hand’ litreage was maintained covering external partnership deals such as that with Optus Stadium which was extended earlier this year. This was despite the ongoing COVID lockdowns and restrictions across Australia.
Contract brewed brands rose 30 per cent to 5.7 million litres, although this was an area that was identified pre-COVID as one which Good Drinks wanted to wind down.
A refocus on own-brand drinks has seen Good Drinks brands increase 45 per cent, to 11.4 million litres up 45 per cent from the 7.9 million litres it made the previous year.
Good Drinks said it is on track to achieve its targets of 20 million litres for its own brands by 2025.
Overall, sales volumes rose to 17.1 million, and total production volumes rose to 19.8 million, the highest ever output for the brewery, with 7 million litres of headroom available as contract brewing is reduced in the next few years. Its ongoing east coast strategy has also been paying dividends, with 30 per cent growth reported in east coast distribution.
The brewery said it had sold more than 1 million cartons of Good Drinks brands in the year, including its 1 millionth carton of Single Fin, which Good Drinks said is the number one craft beer brand in WA and ranked number five nationally.
Pipe Dreams is the fourth craft lager nationally, according to Good Drinks’ results, meanwhile Side Track is the number one XPA in WA independent retailers and the “fastest growing nationally”.
Following the launch of the Atomic Beer Project venue in Sydney, Atomic distributions in NSW have grown 47 per cent, it said.
Good Drinks also gave an indication of its place in the wider market. According to research on the Australian beer market from AZTEC Information Services, Good Drinks retail sales value reaches $89 million, followed by $72 million for Stone & Wood, $65 million for Coopers, and $34 million for Colonial Brewing.
Following closely behind this top four, the analysis placed Burleigh Brewing in fifth place at $32 million in retail sales value, and Young Henrys at $25 million.
At the time of writing, Good Drinks’ share price was valued at $0.091 giving the company a market capitalisation of $113.8 million.