Moa announces half-year results

Results Announcement
(for Equity Security issuer)





Results for announcement to the market
Name of issuer Moa Group Limited
Reporting Period 6 months to 30 September 2020
Previous Reporting Period 6 months to 30 September 2019
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$9,899 (45%)
Total Revenue $9,899 (45%)
Net profit/(loss) from continuing
operations
$(415) 74%
Total net profit/(loss) $(415) 74%
Final Dividend
Amount per Quoted Equity Security Not Applicable
Imputed amount per Quoted Equity
Security
Not Applicable
Record Date Not Applicable
Dividend Payment Date Not Applicable
Current period Prior comparable period
Net tangible assets per Quoted
Equity Security
$0.16 $0.31
A brief explanation of any of the
figures above necessary to enable
the figures to be understood
The significant decrease in revenue is due to the closure of operations as a
result of the COVID-19 lockdowns. The decrease in the net tangible assets per
share is a result of the shares issued in the capital raise during the period.
Authority for this announcement
Name of person authorised to make
this announcement
Tim Peat, Group CFO
Contact person for this
announcement
Tim Peat, Group CFO
Contact phone number +64 21 049 7442
Contact email address
tim@moabeer.com

Date of release through MAP 27/11/2020

Unaudited interim financial statements accompany this announcement.

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MOA GROUP LIMITED


NZX Release
Moa Group Announces Interim Results
27 November 2020
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 earnings
1
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 re launched in early August with a refreshed menu, new décor 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.

MOA GROUP LIMITED



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.

About Moa Group Limited
Moa Group Limited (NZX: MOA) is a brewing and hospitality company owned by and based in New Zealand. The
Group is made of two segments: Moa Hospitality, representing the majority of the Group’s operations, which owns
and operates restaurants and bars across New Zealand, and Moa Beverages, which brews and distributes Moa
branded craft beers and ciders.

---

Moa Group Limited
Interim financial statements for the period
ended 30 September 2020

1

Moa Group Limited
Index to the Interim Financial Statements
30 September 2020





Page
Directors’ Report 2
Consolidated Statement of Comprehensive Income 3
Consolidated Statement of Movements in Equity 4
Consolidated Balance Sheet 5
Consolidated Statement of Cash Flows 6
Notes to the Financial Statements 7-9

2


Moa Group Limited
Directors' Report
30 September 2020


The Board of Directors has pleasure in presenting the interim financial statements for
Moa Group Limited for the period ended 30 September 2020.
The interim financial statements presented are signed for and on behalf of the Board of
Directors and were authorised for issue on 27 November 2020.



Geoff Ross
Executive Chairman





Sheena Henderson
Chair of the Audit and Risk Committee

Consolidated Statement of Comprehensive Income
For the six months ended 30 September 2020
Six months
Six monthsYear ended
Sept 2020
Sept 2019March 2020
$000's
$000's$000's
Unaudited
UnauditedAudited
Revenue
9,899
18,009 38,273
Expenses:
Direct costs
(4,260)
(6,807)
(14,940)
Excise taxes
(1,518)
(1,849)(4,246)
Employee costs
(1,468)
(5,724)(12,464)
Marketing costs
(488)
(978)(1,710)
Utilities and operational expenses
(609)
(822)(1,735)
Other expenses
(510)
(751)
(1,686)
Warehousing and freight costs
(360)
(745)(1,482)
Earnings before interest, tax, depreciation, amortisation, and
restructuring costs
686
333 10
Depreciation and amortisation
(1,226)
(1,193)
(2,666)
Restructuring costs
4
563
(180) (99)
Net interest expense
(438)
(565)(1,286)
Loss before income tax
(415)
(1,605)(4,041)
Taxation expense
-
- -
Loss attributable to the shareholders(415)
(1,605)(4,041)
Other comprehensive income and expenses
-
- -
Total comprehensive loss(415)
(1,605)(4,041)
Basic and diluted losses per share (cents)0.0
(1.9)(4.8)
Weighted average number of shares outstanding (thousands of shares)
Basic and diluted
135,528
84,226 85,035
The accompanying notes form part of and are to be read in conjunction with these interim financial statements.
Note
3

Consolidated Statement of Movements in Equity
For the six months ended 30 September 2020
Note
Share capital
Unissued share
capital
Accumulated
losses
Share-based
payments
reserve
Total equity
$000's$000's$000's$000's
$000's
Total equity at 1 April 201932,105 - (24,058)64
8,111
Total comprehensive loss for the period- - (1,605) -
(1,605)
Arising from business combination- 1,999 -
-
1,999
Issue of new shares6,721 - -
-
6,721
Total equity at 30 September 2019 (unaudited)38,826
1,999 (25,663)64 15,226
Total equity at 1 April 201932,105 - (24,058)64 8,111
Total comprehensive loss for the period- - (4,041)- (4,041)
Arising from business combination- 1,999 - - 1,999
Issue of new shares6,787 - - - 6,787
Total equity at 31 March 2020 (audited)38,892 1,999 (28,099)64
12,856
Total equity at 1 April 2020
38,892 1,999 (28,099)64 12,856
Total comprehensive loss for the period
- - (415) -
(415)
Revaluation of unissued share capital
- 201 (201) -
0
Issue of new shares5
8,359 (2,200)-
-
6,159
Total equity at 30 September 2020 (unaudited)47,251 -
(28,715)
64 18,600
The accompanying notes form part of and are to be read in conjunction with these interim financial statements.
...
4

Consolidated Balance Sheet
As at 30 September 2020
RestatedRestated
NoteSept 2020Sept 2019March 2020
$000's$000's$000's
UnauditedUnauditedAudited
Assets
Current assets:
Cash and cash equivalents3,685 392
Trade and other financial receivables2,054 4,133 2,021
Inventories1,525 3,970 2,293
Total current assets
7,264
8,495
4,314
Non-current assets:
Trade and other financial receivables
306 426 423
Property, plant and equipment
7,442
7,958
7,651
Intangible assets7, 11
19,633
19,619
19,673
Right of use asset11 7,482 9,656 8,519
Total non-current assets34,863 37,659 36,266
Total assets42,127 46,154 40,580
Liabilities
Current liabilities:
Bank overdraft1,431 597
Trade and other payables11
3,367
5,531
4,569
Contract liabilities173 964 610
Lease liability1,480 1,651 1,038
Borrowings8 1,262 1,556 1,643
Related party payables9 2,777 3,050 3,183
Total current liabilities9,059
14,183 11,640
Non-current liabilities:
Contract liabilities
1,470 1,294
Contingent consideration9 1,919 1,234
Lease liability11 6,829 8,172
7,767
Borrowings8 6,169 6,654 5,789
Total non-current liabilities14,468 16,745
16,084
Total liabilities23,527 30,928 27,724
Equity
Share capital5 47,251 38,826 38,892
Reserves(28,651)(23,600)(26,036)
Total equity 18,600 15,226 12,856
Total liabilities and equity42,127 46,154 40,580
The accompanying notes form part of and are to be read in conjunction with these interim financial statements.
5

Consolidated Statement of Cash Flows
For the six months ended 30 September 2020
Six months
Six monthsYear ended
Sept 2020
Sept 2019March 2020
$000's
$000's$000's
Unaudited
Unaudited
Audited
Cash flow from operating activities
Receipts from customers
9,588
16,975 39,944
Payments to suppliers, employees and other
(9,731)
(17,655)
(37,761)
Net cash used in operating activities(143)
(680)
2,183
Cash flow from investing activities
Purchase of property, plant and equipment and intangible assets
(419)
(330)(845)
Repayment of related party payable
(400)
Purchase of businesses(10,906) (10,962)
Net cash used in investing activities(819)
(11,236) (11,807)
Cash flow from financing activities
Interest paid
(207)
(152)(392)
Borrowings drawn down8,210 7,432
Lease liabilities payments
(516)
(713) (1,546)
Issue of shares
5,967
947
947
Net cash from financing activities5,244
8,292 6,441
Net movement in cash held
4,282
(3,624)(3,183)
Add: opening cash and liquid deposits
(597)
2,586 2,586
Closing cash and deposits3,685
(1,038)(597)
The accompanying notes form part of and are to be read in conjunction with these interim financial statements.
6

Notes to the Interim Financial Statements
1Basis of presentation
The Group’s business is highly seasonal with the October to March period representing a disproportionate share of revenue and cash receipts.
The address of its registered office is Level 1, 152 Quay Street, Auckland, 1142.
2Key estimates and judgements
The accounting policies used to prepare these interim financial statements are consistent with the preparation of the Group's latest annual report.
3Financial impact of COVID-19
Wage subsidy
Rent concessions
4Restructuring costs
Six monthsSix monthsYear ended
Sept 2020Sept 2019March 2020
$000's$000's$000's
Acquisition costs5 56 237
Restructuring and other costs207 124 546
Impairment and/or disposal of assets254
Concept development and pre-opening expenses205
Reassessment of contingent consideration (refer note 9)(1,234)(684)
(563)180 99
5Share capital
Equity raise
Moa Group Limited (‘the Parent’ or ‘Company’) and its subsidiaries (together ‘the Group’) operate in the hospitality sector, operating a number of premium restaurants
and bars and in the beverage sector, brewing and distributing super premium craft beer and cider. The Company has operations in New Zealand and sells
predominantly to the New Zealand market.
The condensed consolidated interim financial statements presented are those of Moa Group Limited and its subsidiaries (the "Group"). Moa Group Limited is a
company domiciled in New Zealand, registered under the Companies Act 1993 and is a Financial Markets Conduct Act 2013 reporting entity in terms of the Financial
Reporting Act 2013 under which the interim financial statements are prepared. The Company is a for-profit entity. The condensed consolidated interim financial
statements have been prepared in accordance with Generally Accepted Accounting Practice in New Zealand, which is the New Zealand equivalent to International
Financial Reporting Standards (NZ IFRS). They comply with NZ IAS 34 Interim Financial Reporting and should be read in conjunction with the 31 March 2020 annual
report available on the Group website at www.moabeer.com.
The Group has undertaken a number of key estimates and judgements when preparing these financial statements, the details of which are outlined in this note. These
judgements have been formed using historical information and comparatives where available, and management's best judgement where there is no appropriate
comparison. The Group continues to review all significant estimates along with the assumptions used and recognises any adjustments to these in the period in which a
change occurs. The key estimates and judgements are disclosed in the Group's most recent annual report.
While some economic impacts of the COVID-19 pandemic have manifested there remains significant uncertainty of the impact on the Group's operations. Accordingly,
the assumptions that have been adopted due to the impact of COVID-19 are consistent with those outlined in the financial statements as at 31 March 2020. This has
resulted in estimates being generated on the same basis as at 31 March 2020. One exception to this is that subsequent to 31 March 2020 the Group chose to pursue
rent concessions at leased sites.
The Group received $0.5m of rent relief as a direct consequence of the COVID-19 pandemic. The Group has treated the rent relief as a lease modification under NZ
IFRS 16, with the lease liability and right of use assets revalued based on the relief granted. This rent relief varied in length and quantum by landlord, with the current
relief expected to cease in December 2020.
The Group received $2.9m of wage subsidies which have been recognised as an offset to salaries and wages within employee expenses, in line with NZ IFRS 20
Government Grants.
On 7 April 2020, the Group issued 17.8 million shares raising $2.5m and on 15 May 2020 a further 25.5 million shares were issued raising $3.6m. In addition to the May
equity raise, 15.7 million shares were issued as part of the agreed settlement for the Savor Group acquisition.
Restructuring costs are one-off in nature, occur outside the normal course of business, and are unrelated to the Group's trading operations. These have been
separated out on the face of the Statement of Comprehensive Income to allow the reader of these interim financial statements to understand the true operations for the
period without the impact of these items. These items typically include the impairment or disposal of assets, costs related to restructuring or M&A activity, concept
development or pre-opening costs for ventures, as well as those costs related to COVID-19 such as the closure costs of venues.
7

6Segmental information
$000's
HospitalityBrewing
Group
Total
For the six months ended 30 September 2020
Revenue
4,876 5,023 9,899
Earnings before depreciation, amortisation, interest, tax and abnormal
items
1,327 (261) (380) 686
Depreciation and amortisation
(1,005) (221) (1,226)
Non-current assets
32,513 2,350 34,863
Capital expenditure
(419) (419)
For the six months ended 30 September 2019
Revenue
11,306 6,703 18,009
Earnings before depreciation, amortisation, interest, tax and abnormal
items
1,494 (774) (387) 333
Depreciation and amortisation
(907) (286)
(1,193)
Non-current assets
34,415 3,244 37,659
Capital expenditure
(206) (124)
(330)
For the year ended 31 March 2020
Revenue
24,090 14,183
38,273
Earnings before depreciation, amortisation, interest, tax and abnormal
items
2,487 (1,440) (1,037) 10
Depreciation and amortisation
(2,112) (554) (2,666)
Non-current assets
33,664 2,602 36,266
Capital expenditure
(637) (208) (845)
7
Intangible asset impairment
8Banking
9Related party payables and unissued capital
Six monthsSix monthsYear ended
Sept 2020Sept 2019March 2020
$000's$000's$000's
10Reconciliation of net earnings to net cash from operating activities
Net profit(loss) after tax
(415)(1,605)(4,041)
Add back:
Interest paid
207 152 392
Supplier loans received
500 500
Add/(Less) non-cash items:
Depreciation and amortisation 1,2261,1932,666
Non-cash interest on lease liability and deferred consideration231 412 894
Amortisation of contract liabilities93 111 215
(Gain)/loss on disposal property, plant and equipment124 69
Impairment of fixed assets131
Reassessment of contingent consideration(1,234)(684)
Movements in working capital:
Trade and other receivables218 (1,144)1,807
Inventories768 553 (659)
Trade and other payables(1,492)(852)1,024
Net cash from operating activities(143)(680)2,183
At 31 March 2020, the Group recognised unissued capital of approximately $2m as part of the consideration for the purchase of Savor Group. This capital was issued
on 15 May 2020 as part of the rights issue. The exercise price of these shares was amended to be $0.14, in exchange for the cancellation of the contingent portion of
the consideration that amounted to $1.23m at 31 March 2020. The release of the contingent consideration has been recognised as part of restructuring costs in the
Consolidated Statement of Comprehensive Income.
8
Segmental information is presented in respect of the Group’s industry and geographical segments. The Group's primary place of business is New Zealand with some
Moa Brewing sales to export markets. Export sales are individually and wholly immaterial and therefore do not require separate disclosure.
In April 2020, the Group was granted a six month principal repayment and covenant holiday by its banking partner, representing a total of $0.8m of payments. In
September 2020, this was extended for a further three months, to the end of December 2020
The Group performed its annual impairment testing of goodwill at 31 March 2020, which included a number of conservative assumptions for the impact of COVID-19.
While the Group's performance over the period has decreased compared to the prior year, it is an improvement on the assumptions that were made as part of the
annual impairment test. Management has considered these assumptions in light of the results for the six months and are satisfied that there is no indication of an
impairment that would require a more comprehensive impairment assessment at this time.

11Financial statements presentation
12Subsequent events
On 30 October 2020, the Group acquired the business operations of MBP Hospitality Limited located at 44 Tamaki Drive, Mission Bay, Auckland for total consideration
of $0.6m, being the value of the net assets.
As signalled at the Annual Shareholders Meeting on 23 September 2020, Moa Brewing Company Limited has been impacted by some product quality issues with its
contract brewing partner, bStudio Limited. The Group has made constructive progress to resolve the matter and the reported results reflect the Group’s assessment of
the likely outcome which is expected to be resolved by 31 March 2021.
9
The Group acquired Savor Group on 1 April 2019 and Non Solo Pizza on 30 September 2019. Given the short space of time between the acquisition of Non Solo Pizza
and releasing the prior year interim financial statements, there were some liabilities that came to light after the interim financial statements had been released. The
comparative figures in the Balance Sheet have been corrected for the final balances of trade and other payables and goodwill, a total adjustment of $145,000.
In addition, the Group recognised a right of use asset and lease liability for Non Solo Pizza at both 30 September 2019 and 31 March 2020. Since the date of those
financial statements, the Group became aware of a miscalculation in the lease term used for Non Solo Pizza. The right of use asset and lease liability have both been
corrected in these financial statements, with a total adjustment of approximately $300,000 to each balance. There was no impact on the Statement of Comprehensive
Income as a result of this change.