Gage Roads shares go flat as brewer changes gears

GAGE Roads Brewing shares have lost a bit of fizz with the WA company’s stock plunging to a more than two-year low after it flagged a shortfall in sales was likely to contribute to a full-year guidance miss.

Shares in the craft brewer, which supplies drinks to Optus Stadium in Perth, were down 17.95 per cent to 6.5 cents at the ASX close yesterday after it revealed its unaudited halfyear earnings had slipped to $300,000 from $2.1 million a year ago.

The Alby, Hello Sunshine, Atomic Beer Project, and Matso’s brewer said the earnings slide was down to a shortfall in sales and continued investment in its Good Drinks strategy, with the company continuing its transition away from contract brewing and towards its own brands.

“(The) shortfall was due to a combination of high opening inventory balances and timing of new product ranging with our largest national customer relating to the transition from a historic contractual relationship to one of a traditional supplier,” the company told the ASX.

Gage Roads said it was on track to complete its packaging line, cold store and warehouse expansions, while its new $4.5 million The Atomic Beer Project microbrewery will be open in Sydney’s Redfern by June.

During the period it also secured the exclusive beer and cider partnership for the ACT Brumbies rugby side and partnerships with Sydney Kings, Western Sydney Waratahs, and Laneway Music Festival.

Managing director John Hoedemaker said: “FY20 is a year of ‘changing gears’ for our business.”