I do not often post, but the current result can’t be ignored
Some points of interest
- 17% increase in sales staff
- 35% increase in Employee Expense
- 26% increase in Operating Expense
- 3% Decrease in “Raw materials, consumables & delivery.”
- Overall, “Key Management Personnel” has seen there increase remuneration. Only Robert has seen a reduction. No % cuts in compensation and still been rewarded.
- “Net Assets” have increased by less than 1% (0.94%)
- COVID-19 negatively impacted H2 EBITDA by $3.2m (how did there work this figure out)
- $7,615,793 different between “Profit/(Loss) before income tax” between 2020 result and 2019 results
o Need to sell $7,615,793 more to post the same effect as 2019
- COVID-19 started to taken effect in mid-February, leading to only 4 months of impact for 2020 results
“This is a temporary shortfall to strategy. Large inventory balances in the national chains channel at the beginning of the financial year resulted in lower replenishments of around 0.6m L in H1. Pleasingly, strong sales in H2 reversed this position, and sales went from being down 25% on the prior year from 31 December 2019 to being down 14% at year-end, indicating that the brand health of the brands in our portfolio continues to be very strong.”
- But this is still a decrease of 14%, with an increase in sales staff
Look, Gage Road has progressed over the last ten years and has transformed itself from dominantly contractor brewer to brewing their brands.
However, the issues I see and do not like
- Cost controls
- Staffing costs controls
- Staffing control, (sack the lazy - results first then the reward – this is a business for profit, not a country club)
- The continued capital raising, funds have been raised, management has been reward (shares and increased remuneration) shareholder had to put there hand in their pockets. But the results are not there; the efficiently is not there
- The bulk of Facebook post relate to Surf, would it be nice to get paid to hang out at the beach and take a few pictures. Nothing east coast https://www.facebook.com/GageRoads
Have a look at the different
- https://www.facebook.com/BridgeRoadBrewers more like, more interaction with the post
- https://www.facebook.com/FeralBrewing more like, more interaction with the post
- https://www.facebook.com/goatbeer more like, more interaction with the post
- Facebook followers have not growth
- The marketing team has lost their way, the new direction is required, get them off the balance sheet, outsource to a pro (not mates!!)
- No promotion of upcoming opening for Red Fern Microbrewery next month, are marketing team too busy at the beach taking photos!!
- Reduced footprint in retail (BWS and Dan Murphy) (more sales staff but less space)
- How can Gage Road say there more efficient with an increase 35% employee expenses and a 26% increase in operating expenses from 2019 results
- No real profit yet.
- The increase in borrowing
- Can Gage Road grow without continued capital raising?
- Even with there new venture coming online, it will generate millions of more sales, but at what cost.
2019 results were OK, not ground-breaking, hoping the Gage Road can build from this point. For me, I was expecting the 2020 result to break even or small loss. Without Covid-19 I was expecting sales revenue total $50,000,000+ and “Profit before income tax” of $5,000,000+
I want Gage Road Brewing to see success as profitable; however, the current approach seems shareholder as cash cows (an easy way to raise money) and not value for the cash there have injected.
Most long term investors (past and present) and including Woolworths / Acorn Capital Investment (ACQ) have lost money. Some made money by entering and exiting at crucial times.
Currently, Gage Road Brewing is more like a costly/ high maintenance pet that we are holding on to for sentiment reasons
However, Gage Road Brewing was a farm aminal, and it is not putting down fat; we would have sent it to the market long ago.
Gage Road Brewing Management and staff, listen up. It would be best if you had the shareholders at the moment.
You are lucky to be employed; in Victoria, over 250,000 people have lost their jobs since March. Many people are facing uncertain furtures Look at Qantas and Virgin; countless staff has lost their jobs. When a few staff of taking the “Mickey” out of it and using COVID-19 to be lazy, this is offensive. Management should take action.
Gage Road Brewing is not making the profits and has the house in order for a takeover. Currently, it isn't easy to raise the cash / VC / PE to take the company private. Or would you prefer PE management, there will find ways to improve efficiency and cut out the waste.
This video clip summary it up nicely
https://www.youtube.com/watch?v=0Cl7cxopNjg
Add to My Watchlist
What is My Watchlist?