Australian Vintage Ltd
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AVG Details
Generated positive result despite Brexit pressure: The ASX-listed winemaker, Australian Vintage Ltd.’s (ASX: AVG) stock moved up 3.5% on September 26, 2017 at the back of improving sentiments. The group has delivered a net profit after tax of $4.3 million for fiscal year of 2017 against the after-tax loss of $2.2 million in the prior corresponding period despite the decline in GBP post Brexit. The group continued to strengthen their core business with sales volumes of AVG’s three major brands, McGuigan, Tempus Two and Nepenthe performing well. Their Tempus Two brand led to a 28% improvement in sales and a 50% rise in gross margin during the year. McGuigan brand showed a 6% rise in volume in the UK market as compared to a market decline of 10%. Given the tough market conditions in UK, the group is expanding distribution channels in its other major overseas markets of Asia and the United States. Asian sales enhanced 60% in the six months ended at 30 June 2017, while the region contribution improved by 241% against the same period last year. Timing of orders, coupled with partnership with COFCO paid off. Overall, Asian sales surged 19% for fiscal year of 2017. Australian Vintage is paying franked dividend of 1.0 cent per share on November 10, 2017. We give a “Buy” on the stock at the current price of $ 0.44
Gage Roads Brewing Co. Ltd
GRB Details
Achieved a major milestone: Shares of Gage Roads Brewing Co. Ltd (ASX: GRB) zoomed up 20% in last five days (as at September 25, 2017), as the company announced that it has been appointed as the exclusive supplier of beer and cider to Perth Stadium and Stadium Park (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. Notably, this partnership is viewed as a major milestone as the supply rights to Perth Stadium will provide Gage Roads with unprecedented brand and product exposure that will accelerate sales growth momentum through its existing channels to market. Further, it reinforces the ‘brand in hand’ experience that it continues to promote as part of its “Returning to Craft” strategy. The supply agreement allows for the exclusive sale of Gage Roads draught and packaged products in the Stadium and Stadium Park. In exchange, Gage Roads provides annual rights fees, volume rebates and sponsorship fees to the Operator. The recent run-up has led the stock peaking towards its high levels while further momentum is expected to be witnessed. We give a “Hold” at the current price of $ 0.072
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