Moa announces half-year results

Moa Group Limited (NZX: MOA) ("Moa", "the Group"), New Zealand's own brewing and hospitality company, today reports its half year results for the period ended 30 September 2020. The Group reported operating earnings1 of $686,000 for the six months ended 30 September 2020 an improvement from $333,000 in the prior corresponding period. Including the significant non-cash charges of depreciation and amortisation, plus interest and restructuring costs, net earnings after tax were a loss of $415,000, compared to a loss of $1,605,000 in the prior corresponding period. The Group's underlying total cash inflows from operations of $657,000 compared to outflows of $680,000 in the prior period. Adjusted for the March supplier payments made through April and May as terms were delayed in light of the COVID-19 outbreak and lockdown, total reported cash outflows from operations were $143,000. The Hospitality business took rapid proactive action to manage the impact of venue closures during Alert Level 4 and to be in the best position for when trading recommenced. Initiatives included pay reductions for both management and venue staff, obtaining support from landlords and the Group's banking partner, and completing a substantial equity raise across April & May 2020. The Group was eligible to receive all wage subsidies, which were critical in ensuring that all staff were able to be retained in employment. Ahead of venues reopening under Alert Level 2, the Group redesigned menus across all venues to optimise efficiencies and align costs with the new operating environment, while still providing high quality service for its customers. Opening hours were reduced to reflect the staged return of customers to the city centre and adjusted as demand required. While the Group experienced a significant reduction in visitors compared to the prior year, there was a clear flight to quality as customers sought out the unique experience provided by Savor Group venues. The quieter trading period through winter during Alert Level 2 provided an opportunity for the Group to redevelop Non Solo Pizza (NSP) for the first time in its 23 year history, with a relatively minor impact on customers. The venue relaunched in early August with a refreshed menu, new decor and new fixtures, which has been well received by regular customers and newcomers alike, resulting in a strong increase in trading compared to the prior year. The Group continues to invest in new concepts, both refreshing existing spaces and adding new ones. Lobster & Wagyu opened on the rooftop of the Seafarers Building in Britomart in mid-November and was closely followed by Azabu at Mission Bay. The expansion of the Azabu brand to Auckland's Eastern Bays was made possible following the acquisition of Mission Bay Pavilion, including the iconic heritage Stonehouse. Trading has continued to improve heading into the Christmas period, with sales above expectations. While visible caution remains in the market, strong bookings for events and functions complements venue trading. The Group is looking forward to the America's Cup and related events starting in December through to March 2021, which we anticipate will secure a solid base for summer trading, positioning all venues well to maximise returns. As signalled at the Annual Shareholders Meeting on 23 September 2020, Moa Brewing Company Limited has been impacted by some product quality issues with a contract brewing partner. The quality issues have been resolved and the matter is expected to be concluded by 31 March 2021. While maintaining its current position and profitability against the backdrop of COVID-19, the Group continues to explore strategic options for expansion. Shareholders continue to show their strong support for the Group with the general market consensus that the sector is undervalued. The solid trading performance for the six months, in spite of the difficulties in the Brewing business, demonstrate that the underlying operations of the Group are well established and provide a good base to allow the Group to take advantage of other opportunities where they arise. Executive Chair Geoff Ross says "2020 continues to provide significant challenges both here in New Zealand and around the world. While the hospitality industry is one of the more at risk sectors, the Board are confident in the cautious approach management have taken, while taking advantage of the opportunities and upside where available. We remain committed to delivering value for shareholders and continue to explore growth opportunities in the Hospitality sector." Appointment of Group CFO The Board is pleased to announce the appointment of Tim Peat to the role of Group Chief Financial Officer. Tim has been acting in this role since April 2020 and has provided stability for the team and wider business through the challenges of COVID-19. For more information contact Geoff Ross (Executive Chair): 021 424 219 1 Operating earnings refers to earnings before interest, tax, depreciation, amortization, and restructuring costs, as outlined in the consolidated statement of comprehensive income in the interim financial statements. End CA:00364054 For:MOA Type:HALFYR Time:2020-11-27 08:57:43