Acquisition costs push Moa to $3 million loss

Business acquisition expenses resulted in an 11 per cent increase in costs. Photo / Supplied

Brewer Moa Group reported a full-year loss of almost $3 million, with business acquisition expenses driving an 11 per cent increase in costs.

The firm, forecasting profit in the current year following its purchase of Savor Group, saw its March-year loss widen to $2.98m from $2.55m a year earlier.

Sales increased by almost 16 per cent to $15.9m, but all costs other than administration also rose.

The operating loss, excluding $134,000 of impairments and $435,000 of acquisition costs, improved marginally to $1.99m. Moa's net operating cash outflow doubled to $3.57m.

Auditor KPMG noted the firm's reliance on complying with its financial covenants to continue operating and the material uncertainty that exists as to the firm remaining a going concern.

Moa acquired bar and restaurant group Savor on April 1 for $13m upfront, rising to $21.4m if earnings targets are met. It borrowed $5.5m from BNZ and also raised a further $4.7m through a share placement and rights offer.

Executive chairman Geoff Ross cited the firm's "topline momentum" during the past year as the company enters into a "new vertical phase" with Savor.

He says the acquisition will boost group revenue to more than $40m and "more importantly into profitability in FY20."

Moa shares were unchanged at 42 cents, having fallen about 15 per cent the past year.

The firm, which had almost $2.6m of cash on its books at March 31, has so far accumulated losses of $24.06m.