The return to a craft beer ethos has paid off for Gage Roads with two key Australian capital fund managers taking significant stakes in the WA-based brewery.
Challenger Limited and NovaPort Capital announced to the Australian Stock Exchange on Friday they had bought enough shares for each to have slightly more than 5% of voting rights in Gage Roads Brewing Co. Ltd.
As a result of the purchases Gage Roads’ share price jumped 33% to four cents.
In a recent share fund report Novaport noted, “While Gage Roads posted a solid interim result the share price weakened over the March quarter although we note its price doubled in just three months to January following a company restructuring that enables the company to transition from predominantly third party contract brewer to higher margin boutique manufacturer of its own brand.”
The quote references Gage Roads’ recent decision to buy out Woolworth’s 23.5% stake in the company as part of a restructure of the brewery’s operation last year.
Gage Roads will steadily phase out Woolworth’s proprietary beer brands over the next few years, freeing resources to follow the “Return to Craft” strategy.
In its third quarter report for 2017, lodged in April, Gage Roads reported year-to-date carton and keg sales of its beer products were up 9% in comparison to the nine months ending 31 March 2016.
Sales to the independent retail channel ere up 256% over same time last year and draught sales to the on-premise channel rose 163%.
Former Test cricketer and CUB and Treasury Wine Estates sales boss Graeme Wood also joined the Gage Roads board earlier this year to boost its brand promotion and marketing.
Gage Roads is still celebrating another gold medal at the Australian International Beer Awards last month.
In 2016 the brewer took home Champion Australian Beer for Little Dove Pale Ale (6.2%). This year the short-released Sea Devil (9%) collected the top medal in the Imperial Stout category.
Gage Roads took home a total of 16 medals from the AIBA gala night.