Moving its focus to its hospitality businesses, where it sees greater profit potential, Moa Group has announced it is selling Moa Brewing Company for $1.9 million.
The brewing company will be sold at the end of February to Mallbeca, a company linked to chief executive Stephen Smith and his family interests, the group said in a statement.
The unprofitable Moa Brewing Company last year reported an operating loss of $1.4m on revenue of $14.2m. Chairman Geoff Ross said the board and management had been mulling the future of the brewer for the past six months and decided the best result outcome for shareholders was to allocate capital and management attention to the areas of the business with the greatest growth and earnings potential.
“This has been a difficult decision for the board; however, we know that this is the best outcome for all shareholders,” commented Ross.
Craft brewing was a tough industry because many do it for love rather than money, making it harder for rivals to compete and turn a profit, noted Grant Davies, an investment adviser at Hamilton Hindin Greene.
Moa group’s hospitality businesses, which include bars and restaurants under the brand of Savor Group, had performed above expectations since being bought in April 2019, and the subsequent purchase of Non Solo Pizza and development of new venues have shifted the group’s focus to hospitality.
As a result of the sale, the group will change its name to Savor from March, and Savor Group founder Lucien Law will take over as managing director. Ross will relinquish his executive role and remain as chairman.