GRB - Gage Road Brewery

[Deaneus!]

Imagine my joy when i found BF had a Stock Market board

**cue tumbleweed**


Anyhoo, GRB. In the news a lot lately.

Woolworths owned 25%. Woolworths decide to get out.
GRB undertakes a capital raising to buy back their share.

http://www.news.com.au/finance/busi...e/news-story/90ca3ee397afd5ae3f5a5d358f995f88

Bits that piqued my interest:

As part of a three-year deal struck in May, Gage Roads will continue to brew for Woolworths with an option to extend the deal by another two years. Even though Woolies have sold up, they still want the product.


Gage Roads said Woolworths has agreed to sell its 100 million shares at 1.5625 cents per share. That's a significant market discount.

Gage Roads, which has also announced a full-year net profit of $612,353, has proposed a $10.1 million capital raising to partly fund buying out Woolworths stake. They're making money, and Woolies is selling? What's the reverse of vertical integration?

The brewery said $4.7 million of the proceeds will go to paying down debt and $3.2 million towards funding its five-year business plan. Half the money to knock off debt? That's a smart start, given the previous couple of years were spent investing in infrastructure / plant.

Shares in Gage Roads had plunged by 41.18 per cent, or 2.8 cents, to four cents by Tuesday's close. Woolies selling, capital dilution, meh.

I'm reading this as Woolies got out because they're being told by the higher-ups to focus on core business (otherwise, they wouldn't still have the supply agreement), and GRB are taking the opportunity to refresh and expand, and bringing in talent to do it.

Then, i look through their recent market notifications:
May 2016 - major supply contract announced
May, August 2016 - awards for beer
June 2016 - sales guy who made Little Creatures big gets on board

Hovering at 3c a share, this is worth a punt (I bought some this morning)

 

[CrusaderAussie1]

I'll help you by drinking plenty of it


On iPhone using BigFooty.com mobile app

 

[Deaneus!]

Any ideas what caused the big drop in price from .20 in early 2014?

Great question

i went back and looked at the annual report for the year:


Full Year FY14 Results

Revenue up 21% on prior year to $27.4m
Total production volume up 20% on prior year to 1.7m carton equivalents
Keg production volume up 49% on prior year to 13.6k x 50L kegs
Gross Profit margin of 47.5% achieved
EBITDA down 67% to $0.85m
NPAT down 144% to ($0.38m)

Financial Year 2014 was a mixed year for Gage Roads, a year of recognising and resolving operational risks as we strived to achieve our production goals. The first half-year saw solid production and sales growth of over 40%, incrementally higher earnings growth and gross profit margins in keeping with our expectations. Although this strong growth continued in the 3rd quarter, in April the Company announced it had sustained a production interruption that saw firstly 140,000 cases removed from our full year expectations and then a further 125,000 carton downgrade was announced towards the end of the year due to a slower than expected recovery.
Despite being a tough and disappointing last quarter, the operational difficulties did highlight the risks associated with the rapid growth of our production
facility and brands, and provided an opportunity to mitigate those risks for the future. The production interruption was caused by a design flaw incorporated in the newly commissioned brew house and processing equipment with contributing factors including unprecedented fluctuation in water chlorine levels supplied by the water authority and the delayed commissioning of the new yeast propagation and CIP (Clean In Place) facility. The Company used this opportunity to resolve these issues and de-risk the operations of our plant and equipment by implementing the following mitigating actions:

etc etc

and

The net result of the 4th quarter was an annual sales volume of 1.7m carton equivalents. Although an increase of 20% on the prior year, this result was down 265,000 cartons on our internal full year expectations, representing the loss of $2.1m in potential gross profits and $1.1 million in actual inventory write-offs and associated destruction costs. The Company views this as an isolated event. We have identified the operational risks, have resolved those issues and the financial impact has been contained to FY14.

http://gageroads.com.au/wp-content/uploads/2015/04/2014-08-28-Appendix-4E-and-Annual-Report.pdf

So they produced 1.7m cartons instead of the almost 2.0m cartons they thought they would, wrote off some inventory; sounds like management grew the company a bit too quick and had some growing pains, and there was probably a corresponding loss of confidence in the management. I don't think any problems like this have occurred since.

I see the trading volume is through the roof today, after yesterday's national distribution announcement, so if you're thinking of jumping on board...

 

[Deaneus!]

Very thorough, thanks!

and to top it all off, two directors exercised some options today - about 19,000,000 or a little over 2% of the company.

When directors are exercising options in their own companies, that's a good sign.

Notwithstanding they exercised them at 2.5c, when market value is 3.5c, so they've already made a $190K paper profit... I expect they're getting in because it's only going up. I should probably buy some more!

 

[Deaneus!]

also http://www.asx.com.au/asxpdf/20161019/pdf/43c3djxxtpnpgv.pdf

investor presentation

 

[Special Agent Utah]

Yeah I'm going to have a look at this as well. Some good signs, Might be worth a dabble

 

[Deaneus!]

first quarter results are promising

http://www.asx.com.au/asxpdf/20161028/pdf/43cd5pdtzms33w.pdf

 

[hot dogs]

I am considering buying a few of these. Any update on how you guys think they are going?

Cheers!

 

[Deaneus!]

I am considering buying a few of these. Any update on how you guys think they are going?

Cheers!

4.8c right now - a mate texted me a few days ago and said "up 26%!"

i wrote back and smiled - "only 26% "

second quarter results will come out soonish... plus yesterday they announced they'd sorted a long-outstanding problem they'd had:

Gage Roads Brewing Co. Ltd (ASX: GRB) (“Gage Roads” or “the Company”) hereby announces that it has reached an agreement with a major equipment supplier, Krones AG, in relation to a commissioning issue dating back to 2014. The Company is pleased with the outcome which sees Gage Roads receive $741K in compensation. This amount comprises of a combination of debt forgiveness ($474K), reimbursements for costs incurred ($142K) and future credit for spare parts ($125K).

Not sure how it was presented in the books previously, but everyone loves half a million in debt forgiveness. Another positive for the company.

 

[Garlic muncher]

4.8c right now - a mate texted me a few days ago and said "up 26%!"

i wrote back and smiled - "only 26% "

second quarter results will come out soonish... plus yesterday they announced they'd sorted a long-outstanding problem they'd had:

Gage Roads Brewing Co. Ltd (ASX: GRB) (“Gage Roads” or “the Company”) hereby announces that it has reached an agreement with a major equipment supplier, Krones AG, in relation to a commissioning issue dating back to 2014. The Company is pleased with the outcome which sees Gage Roads receive $741K in compensation. This amount comprises of a combination of debt forgiveness ($474K), reimbursements for costs incurred ($142K) and future credit for spare parts ($125K).

Not sure how it was presented in the books previously, but everyone loves half a million in debt forgiveness. Another positive for the company.

I bought Gage road shares years ago for 4c, sold them for about 22c

May have another dab

 

[Silent Alarm]

The beers are pretty naff.

Anecdotally they seem to be selling way less than 12 months ago. Where I work, it was going very well in six packs with Coopers: both were $18 or so but now Gage Road chucked the Atomic up to $21 or something and they've cooked it.

We barely sell any now.

Also they're bankrolled by Woolies so...

 

[Deaneus!]

Also they're bankrolled by Woolies so...

?que?

I don't think Woolies has any stake in them

unless you're talking about the distribution agreement they've got for the next few years?

 

[WCErevival]

That 26% increase was probably from the $80 Little Dove carton I bought last month

 

[Deaneus!]

First half results out today


H1 FY17 Highlights

EBITDA up 43% to $2.8M (unaudited) in comparison to H1 FY16
Gross Profit margin 55% (unaudited) up from 54% in H1 FY16
Gage Roads sales through the national chains up 24% to 1.3M litres
Sales to the independent retail channel up 244%
Draught sales to the on-premise channel up 184%

Shares dropped 0.3c on the news (!)

 

[ash_1050]

GRB reported a net profit increase of 229% to $2m. Share price has responded accordingly and has jumped from 45c a month ago to 57c currently.

 

[Upgrayedd]

Got about 5k worth of shares at 0.042, yesterday it hit 0.063. Considering they were the biggest brewery in W.A. and the seperation from woolies (Woolies still get a discounted price on their beers so both parties are happy) twas a great price.

Happy boy right now. Hoping they'll climb a little bit more from here and sit around 0.070 around feb/march

 

[Deaneus!]

Yeah I'm going to have a look at this as well. Some good signs, Might be worth a dabble

I bought Gage road shares years ago for 4c, sold them for about 22c

May have another dab

Got about 5k worth of shares at 0.042, yesterday it hit 0.063. Considering they were the biggest brewery in W.A. and the seperation from woolies (Woolies still get a discounted price on their beers so both parties are happy) twas a great price.

Happy boy right now. Hoping they'll climb a little bit more from here and sit around 0.070 around feb/march

I hope you all bought in like i suggested...

GAGE ROADS WINS TENDER AS EXCLUSIVE BEER AND CIDER SUPPLIER TO PERTH STADIUM AND PERTH STADIUM PARK
Gage Roads Brewing Co. Ltd

(ASX: GRB) (‘Gage Roads’ or ‘the Company’) is pleased to announce that it has been formally appointed as the exclusive supplier of beer and cider to Perth Stadium and Stadium Park, the soon-to-be-completed, 60,000-seat, world-class sport and entertainment stadium and precinct in Western Australia.

VenuesLive, the operators of Perth Stadium, have awarded the supply contract to Gage Roads for a term of five years commencing 1 January 2018 following a competitive tender process.

 

[Deaneus!]

Also i love this page of the recent investor report



"Dude, it's time to add our secret ingredient - this massive bag of buds!"

 

[Upgrayedd]

I hope you all bought in like i suggested...

GAGE ROADS WINS TENDER AS EXCLUSIVE BEER AND CIDER SUPPLIER TO PERTH STADIUM AND PERTH STADIUM PARK
Gage Roads Brewing Co. Ltd

(ASX: GRB) (‘Gage Roads’ or ‘the Company’) is pleased to announce that it has been formally appointed as the exclusive supplier of beer and cider to Perth Stadium and Stadium Park, the soon-to-be-completed, 60,000-seat, world-class sport and entertainment stadium and precinct in Western Australia.

VenuesLive, the operators of Perth Stadium, have awarded the supply contract to Gage Roads for a term of five years commencing 1 January 2018 following a competitive tender process.

Didn't put any more money in unfortunately, Hit 0.072 today