# GDA - Good Drinks Australia



## adobee (12 October 2009)

Gage Roads Brewing Co Limited (GRB) is a Western Australian-based craft brewery, with an existing brewing capacity approximately 3.5 million litres per annum, scalable to 7 million litres. The companys current products include Gage Roads Premium Lager, Gage Roads PILS and Gage Roads India Pale Ale.

*http://www.gageroads.com.au*

I have just drunk a few Wahoo beers and been quite impressed thus I am starting a thread on the brewer GRB ... At a glance Woolworths acquired 25% in May 2009, they arent running a profit but have a great product and marketing.. Will be investigating further and looks at the accounts..


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## prawn_86 (12 October 2009)

Yeh these guys and Little World (Littles Creatures) are the only 2 micro breweries listed.

From a beer perspective i prefer Little Creatures, but having said that i wouldnt actually invest in either. Its a very tough market, fickle consumer tastes, and big mainstream competition with huge marketing budgets. Yes micro breweries can turn a proift, but the can also go out of business easily and thier growth is very limited imho.


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## So_Cynical (12 October 2009)

I'm with Prawn...great beers, but the market is very crowed with little gourmet beers and the majors are all powerful, hard to like the micro brewers as anything other than a takeover target.


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## Onvil (7 November 2009)

With WOW having over a qtr of all liqour sales in OZ the early signs of the relationship with them look promising.  Just check out the improved availability of India Pale Ale, Premium and Wahoo at your local Woolies liquor store.  

GRB reported sales of its exisiting lines doubling and sales of the new "Sail & Anchor Dry Dock Premium" are better than expected.  SP responded accordingly.

With Woolies holding 25% of GRB and committing to at least 350,000 case p.a.- Company has been transformed from a 50,000 to 400,000 case brewer overnight.

Agree - Wahoo is a beauty..  I'm in!!


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## blinkau (15 November 2009)

I read this thread and was instantly interested (because it has something to do with beer).

I was reading the annual report and noticed they made a loss of -$2m and so far their equity base has fallen from $15m to just under $4m. Taking a look at the balance sheet I also wonder if their non-tangible assets PPE you could actually realise $2.5m in a sale. Does anyone know when they are likely to become profitable? Based on the current price the market cap for the company is around $32m. 

Just by fluke today I was reading a berkshire report from 1991 and noticed this segment and based on the market cap etc I thought it was an interesting comparison to Gage Roads. I highlighted the parts in bold which mainly relate to it 

Twenty Years in a Candy Store

     We've just passed a milestone: Twenty years ago, on January 3, 
1972, Blue Chip Stamps (then an affiliate of Berkshire and later 
merged into it) bought control of See's Candy Shops, a West Coast 
manufacturer and retailer of boxed-chocolates. The nominal price 
that the sellers were asking - calculated on the 100% ownership we 
ultimately attained - was $40 million. But the company had $10 
million of excess cash, and therefore the true *offering price was 
$30 million*. Charlie and I, not yet fully appreciative of the value 
of an economic franchise, looked at the company's mere *$7 million 
of tangible net worth and said $25 million was as high as we would 
go* (and we meant it). Fortunately, the sellers accepted our offer.

     The sales of trading stamps by Blue Chip thereafter declined 
from $102.5 million in *1972* to $1.2 million in 1991. But See's 
candy sales in the same period increased from *$29 million* to $196 
million. Moreover, profits at See's grew even faster than sales, 
from *$4.2 million pre-tax* in 1972 to $42.4 million last year.

I thought it was an interesting comparison just based on the market cap considering Gage Roads has $4m tangible assets and negative sales yet is worth $31m in the market. I am assuming though the market is expecting it to be profitable with the new alliance with Woolworths. I am not trying to say the stock is bad I am just interested on what people think of its current prospects and if they are already factored into the price. 

Let me know what you think and good work if you got in at 1-2c


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## kingcarmleo (15 November 2009)

I was looking at these guys for a long time but decided against investing in them for a couple of reasons:

1. Hard for companies to secure good market share in the industry. Market is dominated by fosters and lion nathan.

2. GRB niche market is already occupied by Little creatures.

3. Poorly marketed

4. Not popular amongst young adults. Being 19 I think I have a pretty good idea of what beers are popular among my demographic. I have never seen any GRB beers sold at pubs/clubs nor have I seen anyone drinking GRB beers.

The great thing about the negatives I have listed is that they can all be turned around if GRB improves their marketing. It doesn't take much advertising I believe to encourage someone to try a new beer (well for me anyway). I will keep a close eye on GRB anyway.


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## Miner (15 November 2009)

blinkau said:


> I read this thread and was instantly interested (because it has something to do with beer).
> 
> I was reading the annual report and noticed they made a loss of -$2m and so far their equity base has fallen from $15m to just under $4m. Taking a look at the balance sheet I also wonder if their non-tangible assets PPE you could actually realise $2.5m in a sale. Does anyone know when they are likely to become profitable? Based on the current price the market cap for the company is around $32m.
> 
> ...




Very good points all raised.
I wonder the market key players must have studied the points discussed so far in this thread on GRB.

Why then the price shot up ?
Why Woolies want it ?
Why Speculator recommended and the price shot up land they got a speeding ticket ?
The volume of transaction - that was too high as well
 
 Date Last % Change High Low Vol * 
13 Nov 2009 0.115 9.52%  0.115 0.105 425,023 
12 Nov 2009 0.105 -4.55%  0.110 0.105 660,194 
11 Nov 2009 0.110 -4.35%  0.115 0.100 706,094 
10 Nov 2009 0.115 17.35%  0.115 0.100 *1,282,954 *09 Nov 2009 0.098 2.08%  0.115 0.098 *2,166,978 *


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## Onvil (16 November 2009)

Something has lit a fire under this one - Up to 15c today.  ASX equiry coming?  

Next update will be interesting.  

* Will sales momentum continue
* Will they be increasing capacity further
* If so how will they fund it.

Didn't get in at 1-2 cents but I'm in for the ride.  You don't get companies increasing sales volume 8 fold every day - from 50,000 cases to 400,000.


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## adobee (19 November 2009)

damb.. i felt good about it after drinking a case of wahoo but didnt buy in .. what a shame..  The wahoo design is great.. you dont see people drinking it cause its not that available yet ... I love this beer.. i will be buying in shortly ..


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## prawn_86 (19 November 2009)

Wahoo was a bit disappointing for me actually. Easy to drink but no major 'notes' or flavours in it, just a bit plain for my liking.


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## swm79 (19 November 2009)

damn it! i was in this one for months at 5c and it wasnt doing anything... even started drinking the beer... one night i got one of the whole range and sat on the lounge watching the cricket drinking my beer... after a few months i sold at 6c because i thought there were better opportunities around... had always planned to get back into this later on


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## bloomy88 (20 November 2009)

prawn_86 said:


> Wahoo was a bit disappointing for me actually. Easy to drink but no major 'notes' or flavours in it, just a bit plain for my liking.




Yeah I tend to agree, not a bad beer but there are definately better beers out there for $50 a slab...


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## condog (2 December 2009)

Tastes vary and one would be hard pressed to see this stock going backwards with a $720K equipment grant from WOW, plus 1M cartons per annum....gar sales with good margins...

Huge upside potential with WOW backing it....as long as mgmt can grow without imploding, diluting too much or sing rediculous debt , all seems great...

Disc - may or may not own this stock


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## Onvil (14 December 2010)

Just been in my local Dan Murphy's seems to have alot of new drops from GRB - Clipper Light (full pallet), Atomic Pale Ale, Sleeping Giant IPA, Pils 3.5, Blue Angel and Castaway Cidar.  

Will be interesting to see how these products and the relaunch of Wahoo in March go and the impact on the stock price.  

Clipper and Castaway are badged under Sail and Anchor, so they might even give Dry Dock sales a bit of a push too.  Figures crossed.


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## stock nub (4 May 2011)

Sitting at a 1 year low.
Quarterly out and the company pulled in 500k cash after capex.
Market cap 20m and the co is pulling in 2m a year at current rates which makes it look tempting.
The co seems to have decent levels of growth ahead of it, through sales of their own brands which should be given some extra help through additional availability through all the woolworths stores and then through production of the woolworths brands.


I think the game plan is eventually eastcoast expansion but this is sometime off.
But if/when this happens im sure the margins have to be better than trucking beer 1000km+

Anyone else have an opinion??

MMMM beer!


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## Vader (17 January 2013)

This stock is starting to get very interesting IMO.

Currently expanding their production capacity based on forward contracts with Woolies and an announcement overnight that they have two new contract brewers in place to fill some of the extra capacity that expansion currently gives them.

New 3-year supply contract signed with Woolies in November... and interestingly, Woolies strategy here seems to be to replicate what they have done in the grocery stores pushing private lable products (home brand / woolworths select)... not sure whether that'll be as successful with beer as it has been with food products, but as far as GRB is concerned it'll mean a big push from woolies to generate the required high volume / low margin sales.

http://www.smh.com.au/business/woolies-signs-new-deal-with-wa-brewer-20121118-29k64.html

Still a lot of unknowns in there, but it's an interesting strategy and one that could grow quite quickly if they can pull it off (could also just as quickly fall flat on it's face). Price is up nearly 20% today on the news released yesterday, on top of the already 20% gain this month (and nearly 200% jump since mid last year).

...put it on your watch lists.


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## Ves (17 January 2013)

I did the maths on this one at about 7.5c.  It didn't look super cheap to me at that point. Although a few things have changed the price is almost double that now, so it's definitely still not cheap.

 I'm not really interested in earnings re-adjustment plays though, so it could be me.  There is nothing compelling about their long-term competitive position that I can see.  Lots of things that could go wrong, though.

I will however say, that there is a small group of investors who took a large stake in this company at about 7c (look at the volume chart, you will see where they bought) and they've been ramping it on Hotcopper and facebook ever since.  They have a fairly large following all of a sudden.  I'd be careful for that reason alone.


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## McLovin (17 January 2013)

I walk into a bottle-O these days and there seems to be 1001 different beers, how do they all make money? Just the marketing they need to spend to get someone to try their beer makes me shudder. Now these guys are getting into bed with Woolies, care to take a guess who will make more money out of this?

WOW will get into bed with these guys then start marketing their own home brands and in the end GRB will become a contract manufacturer for WOW, earning returns commensurate with that position. If they're doing it to multinational food manufacturers, then they'll do it to a microbrewery.


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## prawn_86 (17 January 2013)

McLovin said:


> I walk into a bottle-O these days and there seems to be 1001 different beers,




Yup its a great time to be a beer lover


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## McLovin (17 January 2013)

prawn_86 said:


> Yup its a great time to be a beer lover




Maybe not a brewer though!


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## Ves (17 January 2013)

McLovin said:


> I walk into a bottle-O these days and there seems to be 1001 different beers, how do they all make money? Just the marketing they need to spend to get someone to try their beer makes me shudder. Now these guys are getting into bed with Woolies, care to take a guess who will make more money out of this?
> 
> WOW will get into bed with these guys then start marketing their own home brands and in the end GRB will become a contract manufacturer for WOW, earning returns commensurate with that position. If they're doing it to multinational food manufacturers, then they'll do it to a microbrewery.



Exactly. And there is very little they can do about it whilst operating at their current scale.

Another turn-off is that businesses like this aren't exactly scalable.  You want to expand, you foot the capex bill.


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## skc (17 January 2013)

McLovin said:


> Maybe not a brewer though!




There's minimal additional cost based on my research.


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## McLovin (17 January 2013)

skc said:


> There's minimal additional cost based on my research.
> 
> View attachment 50471






I prefer Fudd (the stuff they drink in Shelbyville).


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## Vader (17 January 2013)

Ves said:


> Exactly. And there is very little they can do about it whilst operating at their current scale.
> 
> Another turn-off is that businesses like this aren't exactly scalable.  You want to expand, you foot the capex bill.




That's exactly what they're doing - they are already half way through that capex expenditure (full WOW contract comes online 2015), hence the additional capacity they presently have resulting in the contracts announced yesterday.

They have stated quite openly the strategy to move away from high margin sales to be a high volume / low margin contact brewer... yes WOW will make a lot of money out of it if it is successful, but there is no reason why Gage won't too.

From what I can see, WOW's strategy seems to be make 50 of those 101 beers on the shelf variations of their private label brands, promote those that sell the most, cut the ones that don't, rotate in some more private label brands, squeeze the margins of the other 51 beers on the shelf... as they start to disappear, more shelf space gets devoted to the successful private label brands... rinse and repeat.

It's an interesting strategy... I'd be more worried about the brewers of the non private label brands on the shelves that are about to get their margins squeezed like they've never had them squeezed before.

...I'm not so sure it'll be great for beer drinkers either once that happens (50 variations of essentially the same cheap beer), but WOW seem to be set on disruption of the liquor industry and I think GRB are going to get pulled along with them... at least for awhile.


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## clowboy (19 April 2013)

Trading halt for a share placement......

Utilising the high price perhaps?


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## VSntchr (19 April 2013)

clowboy said:


> Trading halt for a share placement......
> 
> Utilising the high price perhaps?




Perhaps the recent run has affected the timimg of the placement, but if you followed the accounts of this one you could see it coming miles away.

Debt was 136% of equity and fully drawn with an equipment payment due later this year. They have begun to generate much more cash now - but obviously not quick enough and the timing has forced this raising.

Woolies will get 25% of whatever the issue is to maintain their stake and i doubt that retail investors will be left with much if anything.

Will have to wait and see for the exact use oft he funding, but my guess is they will want to lower that debt to a more reasonable level...


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## clowboy (26 April 2013)

Well, you were right about retail investors getting nothing.

Capped at 500,000, even if people only apply for the minimum $2000 only 250 shareholders will get a piece of the pie.

Seems to me like you will be lucky to pick up $100 worth of stock under the offer.


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## mr. jeff (6 May 2013)

Is anyone watching this stock ? 
Capital raising at 15 cps and  currently at 18cps and it does not close for another week. 
I am concerned about entering due to stag-ers, but if the institutional placement is taken up by insto's then it looks like buying now wouldn't be dangerous. 
Thoughts on this ?


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## clowboy (6 May 2013)

mr. jeff said:


> Is anyone watching this stock ?
> Capital raising at 15 cps and  currently at 18cps and it does not close for another week.
> I am concerned about entering due to stag-ers, but if the institutional placement is taken up by insto's then it looks like buying now wouldn't be dangerous.
> Thoughts on this ?




See above about and read the offer document, perhaps I am wrong but as I read it, there is basically no stock on offer under the placement.

If I thought there was any chance of getting a decent parcel, say the full 15k I would offload my holdings and buy back at the 15cps, but as it stands and appears I will just add the couple of 100 dollars worth of stock I pick up in the placement to my current holdings


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## mr. jeff (6 May 2013)

clowboy said:


> See above about and read the offer document, perhaps I am wrong but as I read it, there is basically no stock on offer under the placement.
> 
> If I thought there was any chance of getting a decent parcel, say the full 15k I would offload my holdings and buy back at the 15cps, but as it stands and appears I will just add the couple of 100 dollars worth of stock I pick up in the placement to my current holdings




Then I will start looking for an entry. I think GRB looks attractive right now with fresh capital and just starting up with spare capacity. I know very little about their chances at growth though - what worries me is that their product sales seem to be very dependent on one customer who will of course continually push them around and with a  25% share of the company, have essentially blocked any other interested parties. 

The other thing that worries me is that if their customer decides they don't want increased volume, are they limited in producing and supplying other customers - I need to do some reading before I buy. Let me know thoughts.


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## clowboy (7 May 2013)

mr. jeff said:


> Then I will start looking for an entry. I think GRB looks attractive right now with fresh capital and just starting up with spare capacity. I know very little about their chances at growth though - what worries me is that their product sales seem to be very dependent on one customer who will of course continually push them around and with a  25% share of the company, have essentially blocked any other interested parties.
> 
> The other thing that worries me is that if their customer decides they don't want increased volume, are they limited in producing and supplying other customers - I need to do some reading before I buy. Let me know thoughts.




From the above quote I am assuming that you read the document and are in agreance with me that very little stock is on offer through the share offer?

It is a valid point that if woolworths reduce demand then perhaps they may have spare capacity, however, I really don't think that woolworths will ever be reducing demand, rather reshuffling what they demand.  Own label products are a major conponent of supermarkets these days, to have monopoly supply of one of there products could be great, however I do not know how long they are contracted for.  I think that woolworths major ownership is more aimed long term to prevent a Major from buying the company out.  Ie Little creatures.

I cant remember where I read it but I am sure I read somewhere that craft beer has a 46% per annum growth.  I never bought into little creatures because I always thought that they were expensive but yet they continued to go up.  I was a follower of little creatures before anyone knew who they were, I loved (love) there beer and slowly watched as they went from a no one to a someone in WA to a well known micro beer on the east coast.

Which isnt to say Gage road will follow the same path, but it isnt to say they wont.  Beer also tends to have a shield in down economies.

also, at least in WA (where they r from) there beer is growing in popularity.

who knows, it might not eventuate to anything but I like the stock and I like the industry and I like beer...so for now will hold and await how things go for them.

One thing, they seem to always jump between litres and cases of production PA, makes it a bit hard to guestimate there future revenues and profit.


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## VSntchr (7 May 2013)

Gage is becoming popular on the east coast too.

I quite like their ATOMIC product and everyone I've given one to seems to think the same.
They are diversifying their revenue base by contracting brews from other companies such as san miguel etc (see announcements for others).

One issue that I'm currently contemplating which could be an issue is the consolidation going on within the craft brewery sector. With all the big guys buying the smaller guys (see Asahi takeover recently) - it leaves less and less companies for GRB to brew for. This could become a limiting factor for GRB growth in the future, will have to see how the situation plays out..

The price is reflecting a large amount of growth at the moment, but the company is positioned to achieve this. They are now less financially leveraged and have the plant and equipment in place to succeed in their plans - the only question is, will everything go to plan and will management deliver on growth!!

Watching with interest!


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## mr. jeff (7 May 2013)

clowboy said:


> From the above quote I am assuming that you read the document and are in agreance with me that very little stock is on offer through the share offer?
> -------
> It is a valid point that if woolworths reduce demand then perhaps they may have spare capacity, however, I really don't think that woolworths will ever be reducing demand, rather reshuffling what they demand.  Own label products are a major conponent of supermarkets these days, to have monopoly supply of one of there products could be great, however I do not know how long they are contracted for.  I think that woolworths major ownership is more aimed long term to prevent a Major from buying the company out.  Ie Little creatures.




Yes there is a $500k cap on the private investor placement - they probably couldn't be bothered.

Looks like any down days that get near 15c would be a possible buy opportunity as there won't likely be much profit taking. After reviewing the little information provided, it appears that the company has the capacity to sell to anyone, based on the premise that WOW will have proprietary products brewed for them specifically. 
I also agree with the blocking stake theory mentioned above. 
Further to all that, I guess it is just down to selling the remaining capacity and reducing costs. Unfortunately there won't be a takeover premium, but perhaps we could hope for a spin off of the separate entities  in 5 years time. I will be looking for more information before getting too heavily into GRB, but so far looking OK.


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## mr. jeff (7 May 2013)

Made a small entry today at 18c and looking for it to hold above that level based on the chart.




From this chart the distinctive levels are 14c and 18c. Today was also a low volume down day on the market, with very little selling evident, suggesting strength in the demand for the stock. At this stage it is a low risk trade in my eyes and I am looking for it to maintain that steady climb of around 10% per month. I was looking for a pullback to 15c but as this has not eventuated and has now moved above that 15-18c range, it may not revisit the range before moving up.

Now watching more closely and holding a few.


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## clowboy (8 May 2013)

mr. jeff said:


> Yes there is a $500k cap on the private investor placement - they probably couldn't be bothered.




Perhaps they just don't want the hassel of having to sell more stock to WOW.  WOW is entitled to maintain it's 25% stake so if they issue to much they will have to reissue to WOW again


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## clowboy (1 August 2013)

Anyone have any thoughts on the qrtly anouncement today?
Would have liked to have seen a bit more growth in revenue, its up less than 10% on the last half


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## Miner (30 December 2014)

mr. jeff said:


> Made a small entry today at 18c and looking for it to hold above that level based on the chart.
> 
> View attachment 52061
> 
> ...




Mr Jeff et al

Any update on GRB since about a year passed on this thread with no posting ?
Net Profit was down by more than 100% even with increased revenue. The share price ironically did not tumble. 
see attached 
Any thoughts ?

Cheers


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## Huskar (27 February 2015)

Poor result in my opinion. Fall in revenue and huge blowout in receivables indicates quality of earnings poor. Of course, the market has already seen it coming..


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## greggles (30 April 2018)

Gage Roads Brewing Co have announced a good quarter of growth in Q3 FY18.

$2.1 million in cash generated from operations
Sales to independent retailers up 183% compared to Q3 FY17
Gage Roads draught sales up 445% compared to Q3 FY17
Total proprietary brands volume up 153% compared to Q3 FY17
Share price is up 15.49% to 8.2c so far today and it looks like it may be heading back to 10c in the near future.


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## greggles (13 June 2018)

Nice gap up by Gage Roads Brewing today after announcing that they have raised $10 million by issuing 117,647,058 shares to institutional investors at an issue price of 8.5c per share. The company plans to raise a further $2 million via a Shareholder Share Purchase Plan in which shareholders, irrespective of the size of their shareholding, can purchase up to $15,000 worth of shares at an issue price of 8.5c per share.


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## System (25 November 2020)

On November 25th, 2020, Gage Roads Brewing Co Limited (GRB) changed its name and ASX code to Good Drinks Australia Limited (GDA).


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## greggles (25 February 2021)

Good Drinks Australia reporting some good financial results this week.






Net Profit up almost 600% is a significant improvement and it looks like a good sales and marketing team and strategy is starting to pay real dividends for GDA. Management seems convinced that this momentum can continue to the FY results. If so, by the end of this year the GDA share price will be much close to 20c than 10c.


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## Miner (25 February 2021)

OMG


greggles said:


> Good Drinks Australia reporting some good financial results this week.
> 
> View attachment 120592
> 
> ...



OMG, people were pissing so much without watching their wallets 
Congratulations GRB and now GDA holders.


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## Dona Ferentes (25 February 2021)

nice transformation



*H1 FY21 CONSOLIDATED SUMMARY *
 • Good Drinks Volume up 46% to 6.1m Litres 
• Total Volume up 41% to 8.6 m Litres 
• Revenue up 47% to $28.4m 
• Gross Profit Margin up 2% to 71% 
• Variable Production Costs down 30% to $0.41 per Litre produced 
• EBITDA up $6.8m to $7.1m 
• Good Drinks is the #1 independent craft supplier in Australia 
• Single Fin is now the #1 craft beer in WA  
• Atomic Beer Project (Redfern NSW) open


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## Dona Ferentes (30 July 2021)

in April, Market Update was optimistic, but the SP response was rather flat...  Ongoing lockdowns not helping....  WA would be OK but the Redfern outlet must be gathering cobwebs.

Work is to commence on the A-Shed in Freo

Highlights 

Good Drinks Volume 8.8m L, up 42% on YTD FY20 
Total Sales Volume 12.8m L, up 41% on YTD FY20 
Strong momentum to close out FY21


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