Depth is an illusion that can pull in newbies. Depth can and often is "manipulated (legally)" to draw in punters.
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All back on track. The stuff to fly off the shelves now. Nice
So the money is in the space between real craft beer and the likes of Heineken and Stella. Moa Original the saviour
Ross says "All those American craft beers that have gone on to be really big like Sierra Nevada, Samuel Adams, Anchor Steam, New Belgium, Little Creatures in Australia, all their volume has come from beers that they've put around here," he says, circling the point between craft and premium, "so we think the sweet spot for volume is there in the crossover premium craft market."
http://www.stuff.co.nz/business/indu...-Moas-priority
So he wants to become another little creatures .... LWB was a great investment for me ....don't think Moa fits that bill ....god luck to them anyway
As a 2IC Alcohol manager something has changed we used to order MOA and it would take forever to get some. Had 3 boxes come in yesterday (ordered day before) and all were gone by the end of the day. Almost makes me want to grab a small holding.
Update says all on track now ...big losses coming but what the heck
Yawn.
They were warned.
just like with Snakk.
One would have to say Australia must be a huge growth opportunity for MOA
Wonder how much they can grow on the H2 revenues of $79,000 ......yep $79,000 ...how many bottles is that in the lucky country
Why. Its not all XXXX over there. I am sure they have some premium brews of their own and with most things, Ozzies would frown upon anything kiwi unless they can claim it as their own.
Maybe they should relabel it Emu for the Australian market - genius. Geof Ross step aside
Amazing how the directors and management write their results report like the loss and the disastrous performance against prospectus forecast is like the faults of everybody else's?
Reminds me of their mate, Brent King, and his blame of everyone else for the problems with Viking's investments.
The previous New Zealand distributor arrangement ceased 1 October 2013 and Moa assumed
responsibility for its own sales initiatives for the New Zealand market. The October performance was
particularly strong for New Zealand and a good order book into November supports the revised sales
volume projection.
As signalled, gross margin performance was particularly low at $0.2 million, resulting from too much
emphasis on lower margin products, unrealised economies of scale and the effects of distribution
transition.
Tried to look through the AR for some light and came across this gem of high alert for investors :
Loans to Directors
As contemplated in its Investment
Statement dated 11 October 2012,
Moa Brewing Company Limited has
provided limited recourse loans to the
independent directors and Geoff Ross,
as Chief Executive Officer, to enable
them to subscribe for redeemable
shares at the Offer Price of $1.25 per
share. The independent directors each
subscribed for redeemable shares
having an aggregate issue price of
$200,000, and Geoff Ross, through the
Business Bakery LP, subscribed for
shares having an aggregate issue price
of $1,140,000. The loans do not bear
interest, and are repayable after three
years or earlier at the discretion of the
director. The loans are non-recourse
against the borrowing directors, but
will be secured against the relevant
redeemable shares held by or on
behalf of the directors and which were
acquired with the loan proceeds.
The redeemable shares and related
non-recourse loans in respect of the
above incentive package were issued
on 11 March 2013.
As at 31 March 2013, no cash has
been exchanged in relation to
this transaction.
What a strange way to issue $1.25 options. What say the shares are worth $1 after 3 years? Do the directors then have the option to repay only 80% of the loan and keep the shares? And if they don't pay back any of the loan then does the company write off the loans, take back the shares and cancel them? And what about any dividends in the meantime? It could look very messy to say the least. Why not just issue options, that seems to be the standard way to have directors motivated and their interests aligned with those of shareholders - without the need for them to put any capital at risk of course!
Allows the directors to say they have 'skin in the game'?
But not real skin in the game as the loans are interest free and non-recourse - heads they win, tails the company and other shareholders lose.
Excerpt from AGM : "I’d also like to reiterate the personal commitment of Geoff and myself to the
business. As you may be aware, our investment vehicle, The Business Bakery has
a large holding in Moa and we have invested more than $2.6m of our own funds,
so we are not like many company managers or officers who don’t have skin in
the game."
I think this has been pointed out earlier. Given the redeemable shares are out of the money so to speak, dont expect the loans to be paid back in full unless the company redeems the shares in full (lucky for some isn't it). There is no recourse against the holders of the loans other than security over the shares.
Is a backdoor job really worse when the promoters distract potential investors with magazine style ads in the prospectus and use terms like limited recourse loans which M&D investors (if they really exist) don't really understand but use to make the situation look better than it actually is (ie. thinking the promoters had put cold hard cash on the line).
At least Snakk is on the NZAX, so acknowledged to be riskier, and everyone who did their DD knew that shares were issued cheaply in the past.
All time low of 62 cents today but ..
Promotors, directors and 'key' personnel who provided consultancy and management services to Moa paid themselves $1.39m in fees and benefits in the last 18 months!
They will be breathing in the vapors of the $65 scented candles from Ecoya as they think of the disappointed shareholders?
yes the 42 below success doesnt seem to be rubbing of on either of the current businesses, still time I guess to show improvement, but current prices suggest market doesnt hold much hope on either
Turning point for Moa? End of spin and finally some runs on the board? No more sticky wicket?
Maybe the guy who ate all the pies can drink all the beers, although Liz has trimmed him down somewhat. She must be voracious.
Nice nudge through mid wicket in the sp anyway.
MOA pretty quiet on this forum of late. Although I don't inherently like investing in companies that push booze, having recently developed some experience and liking of craft beers, I like the idea of drinking much less quantity but much better quality. Not saying MOA is the best beer around but the concept I think is good.
Even with reservations about Baker and Ross, and recourse loans and an RMA appeal and knowing Milford's legitimate gripes, I think at around 65c MOA's risk/reward is in my ball park, so I'm in at these levels.
(Yes, Balance, et al, I know, I know!)
Well they have a product you could call world class (based on their awards in beating other breweries overseas). Given they have established some products, the next step is actually distributing the beer properly, haven't been entirely impressed with how distribution goes. They seem to have the range of premium Moa's in New World, but only sell the original at Countdown and haven't seen it in Pak'n'save (could be there though haven't seen it). You could say its a beer for the upper market but I'm sure people who shop at Countdown would buy them if they were their. Since people usually choose to base their shopping on certain supermarkets by missing out a place like Countdown could possibly miss a third of the market. They complain how Moa original is very low margin and that they suffer in that course, but they gotta look at themselves and see that if they are only going to stock Moa Original at Countdown and its likely same with other places to then its not gone sit well with sales and profits. Its how I see it anyway and this is recent after they have said months ago that they have overhauled the distribution system.
Thats for Christchurch anyway, it could be different in other places.
I would never invest in this as I know more people who embargo Moa beer than Moa drinkers. Never a good sign.
I've seen a few of these "are you complying with Listing Rule 10.1.1" letters recently and the answer is always a very short "Yes we are complying". Wonder what the point is really.
great game Winner, the CANES deserved the win - fantastic last try, in fact all the tries were stunning to watch
actually, ended up with a spare seat which someone in CHCH could have had if I'd thought about it earlier - next time I'll call for takers
sorry MOA - drank HEINEKIN and TUI all night, followed by a 2012 AWATEA
we did a vertical tasting a couple of weeks ago of 2006, 2008 and 2012 (my mate had quaffed all the 2010) and we all thought the 2012 was better than the earlier two. I used to religiously buy six of his Coleraine to cellar each release, but have moved on from wine collecting, as I drank it all :p
For a Buck wine the Awatea is a good option, especially in years when there is no Coleraine (if he doesn't produce a Coleraine, those grapes end up in the Awatea)
I actually prefer Bullnose when I can get it but thats a personal preference. I used to live within 3km of Te Mata's cellar so it was easy to get in those days
I picked up a few today. I personally think its still undervalued
Based on potential, not on current sales. I except them to announce they've met their targets, but lower revenue than expected.
Still, they're picking up market share which is great
Still well overvalued. They have lowered their prices to sell more, but their margins are VERY VERY small. A large proportion of their target market dislikes them quite profoundly due to their marketing. Not hard for them to increase market share when the market is growing so quickly and they are discounting so much. They have some very good beers (Imperial Stout is great), but they also have some very average beers (which quite frankly isn't really acceptable in this industry if you want to make it big). They are having major issues with capacity, which has lead them to contract brewing elsewhere (theres those margins getting even smaller). I'm not sure if they still are (I assume they are), but they were brewing 24/7 - four ~1000L batches per day. It takes the same amount of time to brew 10,000L as it does 1000L, so they are wasting so much in labour costs... so they need larger equipment very soon (probably 1-2 years ago actually).
Emerson's, which had a very good reputation in the industry and was one of the craft brewing pioneers in NZ was sold to Lion for between $15-$20mil. I would say that they were selling more than Moa and not losing millions of dollars a year. Food for thought eh?
I disagree and although I do agree with you that low margins and capacity are big problems I can see people jumping back on board their stock in the next 6 months. As they mentioned in their last report, they've moved significantly away from the super premium low-margin beers and more towards the higher margin 12 pack supermarket style beers.
MOA share price was the lowest it's been at closing yesterday. 65% lower than the day before their earnings expectation announcement last August. Thats quite a big drop for only a 30% sale volume shortfall. Obviously it will be interesting to see what their margins were, especially with all the contract brewing but I don't think their outlook is a bleak as many have been made to believe.
I'm afraid that you'll find that MOA will be selling their 12 packs at or just above cost price (and thats excluding their marketing costs). They are trying to create the perception that they are meeting demand. As soon as shareholders demand to see some profits they will have to increase the price of their 12 packs to the point where their customers won't buy it. Do you really think that Moa can produce a 12 pack cheaper than Heineken (hint: No they can't. Their ingredient costs are much larger and economies of scale is a MASSIVE factor in this industry).
It doesn't matter how much lower the SP is compared to what they listed at. What matters is what the company is worth. With the losses they are making and no profit anywhere in the foreseeable future the company isn't worth anywhere near ~$20 million. Those who bought into the IPO were taken for a ride. It was grossly irresponsible for funds such as Milford to buy into the IPO. Gaynor realised their mistakes pretty quickly and knew to cut their losses.
I paid $16 the other day for my first bottle of Moa (breakfast, had previously bought a bottle of Imperial Stout for a friend @ $22 but didn't try it) just to see what all the fuss was about. It was nice to have a fancy bottle and all, but didn't enjoy it enough to be be paying that premium again. You can get many other "craft" beers for a similar price (e.g. Hitachino Nest beer) or cheaper (e.g. Ginga Kogen) that come in equally eye-catching bottles and taste better (IMHO).
I was initially interested in buying some shares back when it was just below $1, but I am glad that I held off. I hope that Moa does succeed, but I am not convinced that there is a significant market for beer at this price. The craft beer market already seems saturated with many most excellent beers, so I have plenty more to sample before going back to the Moa range (which I probably wouldn't do at its current price).
But that is just my wallet influenced view on the one Moa beer that I tired. Does anyone rate Moa head and shoulders above other boutique brews?
No they aren't heads & shoulders above NZ beers. I think thats why their low-margin beers like the $22 one you tried failed in NZ.
I actually see them moving slightly away from their self imposed 'super-premium' brand in NZ and grabbing market share with their cheaper-to-brew Original and Sessionable Pale Ale that you might have seen popping up in supermarkets.
I think we'll see a shift with a higher percentage of the premium beers being exported, at least until their new brewery gets built.
The problem with MOA is that it just isn't that nice (for the price). Tuatara on the otherhand...that is a different story!
Well I liked the 99 not out.
In any case, most successful beer companies make rubbish beer. I'd be more interested in the stock when they make a profit.
I own a shares in ckl.ax (kfc). I don't particularly like their products, but that does not mean I can't make money on the shares.
Belg the research involved buying over $200 of product, a trip to Marlborough to have a look at the brewery & attend a question and answer session. Guess it was fun but it would have been more so if I'd loved the product.
noodles I agree with you that it is possible to make money on companies who sell products you don't particularly like. With Moa it was more than me not particularly liking the product; I wasn't convinced by their business plan either.
Wow. Someone with 50k worth of shares wants OUT. Have we had any news on the RMA application for the new brewery??
http://www.nzherald.co.nz/business/n...ectid=11238786
Not all beer and skittles in the alcohol business as one ex 42 Below shareholder finds out.
600,000 bottles a year and they cannot make money?
Want to invest in a small brewer but don't like MOA - this one is planning on crowd funding:
http://www.crowdfundinsider.com/2014...g-new-zealand/
Can one of you accountants please explain how a company can fail to include 'marketing and sales costs' under cost of sales?
Yes Harvey is right, cost of sale only is meant to include the cost of making the final product, which generally in accounting should not include any other cost. Say cost to deliver the product, to market it are separate. I guess the words cost of sale are slightly misleading, but hope that gives clarity regarding it.
And thanks for the heads up on the new brewery crowd funding Harvey, will try to get a hold of their products and see if they might be a good investment. Have you tried their products? Any thoughts on the products?
Very good beer and run by very good people. Be sure to try their Craftsman. Unlike Moa, I suspect their marketing costs are very low, as they let their beer do the talking and win many awards.
As for the Moa results... well it's all totally expected. Capital raising is definitely on the way soon. They are going to have to issue at least 1/3rd more shares and I don't think people are going to be willing to pay much for them (sub 50c I suspect). They also have a new plant that they will have to pay for (~$5 million), so maybe expect a bigger dilution. As for the sales numbers, look at the COS/Revenue ratio. Like I have been saying, it's very obvious that they have only been able to sell so much more because they are selling it for so cheap to make the "growth" look good. All other expenses are growing faster than revenue too, so not a good look.
Stay away from MOA.
If I had the choice of pretty much any other craft beer I would most likely choose it over Moa. As a beer, its a nice beer but nothing to rave over I find.
With the on-set of other brewers which are better hands-down e.g. Renaissance brewery - I cannot see Moa standing up to them.
Yea, though for $23.99 for a dozen moa lager at the supermarket at the moment, what would you buy at that price point? They talk about competing wiht craft beer, but we all know that's rubbish. Though the 5-hop is pretty awesome. In Wellington, most bars and restaurants don't sell a lot of 'true craft' beer, there are some good beer bars, but the bars with more corporate-y clientelle are still being shifted from Heineken and Steinlager Pure. The purchase of emersons by Lion has lead to some Emersons at lots of big bars in WGTN and AKL. Moa fits somewhere in the middle here. They certainly aren't craft (though they are attacking the market at all angles). They are a 'kiwi premium' beer. The question is whether they can scale up quickly enough to be profitable at this level.
Despite me talking them up earlier this year, i jumped out shortly after their results came out yesterday. $6m loss with only $4m left in the bank. So short-mid term chance of making any money, and a 'letter' from key investors isn't enough for me to have any confindence.
still not interested
It amazes me how many people don't buy their beer based on their advertising campaign. Still all those little things matter.
discl. don't hold
http://www.nzherald.co.nz/business/n...ectid=11263313
Sharebroker Forsyth Barr has downgraded its view on Moa Group, saying the company is an "unappetising investment case" and is expected to burn through its remaining cash reserves over the next 12 months, which may lead to a capital raising.
End of the day to convince others you need to convince yourself. If the beer is a nice beer but nothing special, what makes it stand out from the competition? 42 Below stood out from the crowd and is well loved - its almost a fashion statement when one of those arrive to a party!
Pale ales do tend to be quite popular!
Wow! Like its namesake soon to be extinct?
looks like people baling cause of the rather large cash injection they are going to need to keep operating, the more the price falls the more dilutive a catch 22 really
when a barman gives you another beer no questions asked that says it all about its status in the market and this was an upmarket bar in ponsonby so there you go no connection in the premium end of the market which i believe they were aiming for- the share price since says it all
Agree totally, the first thing that put me off purchasing these shares was when i tried one of the beers. Couldn't even finish it.
I tried another at a food show just in case the first one I had was the one in a million, but unfortunately not. When I told the salesman what I thought of the taste he got aggressive and didn't want to hear. Only trying to help mate.
But what finally convinced me that this would never be a share to buy was when I saw that tosser Ross in his office on TV one day. I really don't know how to describe the view of his offices, some sort of cross between far too much money spent, disgraceful taste, questionable sexuality. Kind of Elton John esk if that helps.
I wouldn't take the shares if they were free.
Call me delusional given the current negative vibe going around, but I'm still a bit optimistic about MOA. There is a lot of fear they will run low on cash very quickly, which I would say that its too close for comfort, but my general opinion is that they were dealt a huge blow when their distribution didn't go well, which they have had to sink quite a bit of money into revamping it as shown by the high administration cost in their statements and lower sales meant even higher loss.
As the figures also speak for itself in sales 40,000 9LE cases in the first six months to 96,300 9LE cases in the second half, which if we assume everything goes better this time round the losses should be much lower to around 3-4 million or even less if they achieve even better sales. I think they will be able to last at least another year (maybe even 2 base on how they perform I guess), just my perception in a my optimistic way of the current fundamentals rather than letting what I read in the news to dictate how I should view the company.
It's good they have a contract in place with McCashin to be able to increase capacity in what they see as efficient. I'm not liking that they probably won't have money for expansion of a new brewery and may have to raise more cash later in the future.
Their distribution costs are up, which I guess they are trying to remedy the problem they had with retails not being able to get their product in a timely manner.
I do expect at least 1.6 million to be cut from administrative as they likely spent a lot on distribution arrangement which they should find more efficiency and a high gross profit as they start to achieve high sales on the new distribution model, though they are lowering margins while they do so. I think they will be more conscience of cost and getting better margins, as anyone with sense would and lets hope they do, but either way they shouldn't be spending any more than the 4 million they have in the bank. Ideally I'd hope loss for FY15 to be 2 million.
From today's DomPost/Stuff.
http://www.stuff.co.nz/business/opin...o-Moas-decline
Thanks for posting the link.A good article .
Too much weight was placed on the success of 42 Below. Truth is that if you got in at the beginning of that IPO, you made an IRR of 15% pa - hardly inspiring for a start up and where the promotors like Ross & Baker put in bugger all.
Ecoya and Moa show marketing and PR will only take you so far in the real business world.
I blame the NZ media and the young naive pimpled faced reporters falling for the old 'wine and dine' fascination with so called successful entrepreneurs.
Anyway, Ross and his gang have now got their work cut out trying to make Ecoya and Moa profitable. Until then, cannot see them taking any more of the public's capital to fund their 'ideas'.
Maybe next project is teaming up with Derek Handley?
Very good article in a period where press releases are passed off for journalism! They are gone - might be a slow death but contracting out brewing while holding your brand out as a craft beer is an oxymoron. Another company spending money raised for bricks and mortar on operating expenses....
Great article.Quote:
They need to realise you can't do a 42 Below on craft.
Geoff Ross is doing another AMA. Send in your questions:
http://www.nbr.co.nz/ask-geoff-ross
Just had a skim through the annual report. Looks exactly as many had anticipated except perhaps for inventories. They seem to be accumulating materials and product at a rate much higher than one would reasonably have expected even give the higher sales volume and collapse in margin on their product. However give their situation and history you’d be very hesitant to read that positively. I can’t attest to the quality of this refreshment, my personal preference is for a sturdy drink.
Of course I’d love to be in on this industry but have a strong aversion to losing money. Still too early to judge if this can be turned around or when in my view.
Inventory is an asset - for MOA it is broken down into three parts (Note 14):
Raw materials: $611K - stuff that we can use to make beer;
Work In Progress: $387K - stuff that we are turning into beer now (at 31-Mar) [+ other direct inputs into production];
Finished goods: $935K - stuff that is beer.
There just have to find away of making a profit as a company.
Best Wishes
Paper Tiger
Gross Margin (sales less the cost of the hops and stuff as well as making it) is only 17% of sales
Doesn't seem very high
Esp distribution costs (presumably freight, storage and agents fees) is 27% if sales
And that's before sales marketing and that stuff
Its a liability.
Sure it’s an asset from an accounting perspective but we should look at it from an investors perspective.
First question. Will the bank lend Moa on the basis of having $1.9m in inventory “assets”. I think not.
Second question how many days inventory do they have. First cut suggest 132 days ($5.2m sales/360 days = $14.4k a day. $1.9m/$14.4k = 132 days). But inventory is at cost. So assume a 50% gross profit margin we end up with 264 days worth of inventory. Not such a rosy picture.
Third question – how does it compare with last year. Worse – last year it was 169 days.
Can’t see how this can be considered an asset.
Now add maintenance cost. More inventory means more real estate for warehousing stock. More costs in stock control, more costs in cash flow impact.
Now add market taste. Say they have inventory in Stout but the market move towards Pale Ale. If they were meeting market demand they wouldn’t be holding $935k in finished product.
It's even worse if it's perishable inventory!
"I hadn't thought of that" said Paper Tiger.
"Oh, that was easy," says minimoke, and for an encore goes on to prove that black is white and gets himself killed on the next pedestrian crossing.
Best Wishes
Paper Tiger
Original Douglas Adams (may he rest in peace)
Nice quote.
Though does leave us pondering black vs white. Is a zebra black with white stripes or white with black stripes. Or the ultimate of questions: is a tiger orange with black stripes or in fact black with orange stripes?
Such are the mysteries of the universe.
So in his opinion piece at the weekend Brian says:
So today from MOA we get this announcement:Quote:
Companies encourage shareholders to receive reports and communications electronically, yet Moa Group had not posted the 2014 notice of meeting on its website or with the NZX by July 10 even though it is holding its meeting on July 24.
and then this announcement:Quote:
In support of 2014 Notice of Annual Meeting of Shareholders, first advised 28 May 2014, Moa advises the order of business.
Quote:
Moa Group Limited filed its initial Notice of Annual Shareholders Meeting with the NZX on 28 May 2014, stating that it would hold its Annual Shareholders Meeting on 24 July 2014 at 3:00 pm at the Nathan Club, Britomart...
Nearly as good as Sharetrader itself.
Best Wishes
Paper Tiger
I'd be keen on a good opinion as to whether this company is a dead duck?
I ask because, I really like beer, and so started watching MOA at the start but I don't think I've ever owned it, but the price just keeps on going down. At this point I am getting a little bit tempted, but, I haven't done enough research and would value a good opinion as to whether there is any future :)
Regards and cheers!
Buy the beers not the shares
Huge growth in quarterly volumes .....killing the opposition by the looks of the charts
Very impressive update - well written and presented
Go my man Geoff
gross margin increased from 14% to 19% (does it match competitors margins?) , while this is good you need to see what there operating costs are as if high would mean low net margin
Who here has tried and will continue to drink Moa beer?
I've tried it, but no, wont be drinking more of it. It is a perfectly fine beer, but there are other craft beers out there a) doing a better job and b) doing it quietly without trying to brand their way into peoples drinking habits. I'm not sure if Tuatara have ever done an advertisement (I expect they have, I just mean its hardly pervasive), beer speaks for itself.
I to tried it....won't be buying it again. Preferred the Stoke range. But then I am a Mac devotee from way back.
I have tried Moa and continue to purchase when/ if I see it on special, but not as a preference over other brands.
The growth in volume and margin is probably driven by the 'move' to premium beers through contract brewing of the original and sessionable pale ale, which is hopefully growing the brands profile and availability