Beer News - Big Island chief eyes froth off the top
Good for the promoters I guess..................
Big Island chief eyes froth off the top, Michael Weir, 13 April 2007 The West Australian
"Wine merchant and wireless technology group Wavenet International chairman Mick Stroud stands to be a big winner from his latest business venture, the $20 million float of a new premium brewery.
As well as Mr Stroud being the biggest shareholder in Big Island Brewing with a $6 million stake, according to the prospectus the company is buying his Perth Ice Works business for $2.2 million, leasing factory space from him for $810,000 a year and will take a major stake in his Total Wine Solutions distribution business for an undisclosed sum.
Big Island is attempting to raise $10 million at 40 a share in a float of 48 per cent of the business, but faces an uphill battle to reverse market sentiment that has left investors in some of its listed rivals nursing hangovers.
Perth has seen a flood of boutique beer listings in the past six months and all are trading well below their issue price. Gage Roads Brewings shares closed yesterday at $0.30, Colonial Brewing Co owner Empire Beer Group finished at $0.19, well down on its $0.35 issue price in January, and shares in the fledgling Oz Brewing are trading at $0.11, almost half the $0.20 issue price in late December.
Only Little World Beverages, owner of Fremantles Little Creatures and the veteran of the group with almost 16 months as a listed company, has left shareholders feeling merry. Little World listed at $1 in November 2006 and finished yesterday at $1.69, recently hitting a $1.78 all-time high.
Big Island managing director Shane OHart, a former senior executive of Coles liquor division and former WA manager of global spirits giant Diageo, said the company would stand apart from its competition because of its bigger brewing capacity that would make it a "volume craft brewer, not a boutique brewery".
He said the planned capacity of 9 million litres a year, more than twice that of Little Creatures and Gage Roads, plus the ability to increase to 14 million litres would make Big Island one of WAs biggest brewers.
Big Island is keeping its branding and range of beers, developed by former Swan brewer Hugh Dunn, under wraps but hopes to start brewing by mid-2007 and launch its first products by the end of the year.
"This (premium) segment of the market continues to grow as beer consumers trade up to premium products," he said.
Mr OHart said Big Island did not plan to have its own brew-pub or restaurant but would wholesale packaged beer directly to the big liquor chains and tap beer in some pubs.
Mr OHart said the purchase of Mr Strouds Perth Ice Works, which has 60 per cent of the Perth ice market, gave the company an instant distribution network and infrastructure, with the business to be re-branded Big Island Ice.
According to the prospectus, the Perth Ice Works deal includes paying $160,000 a year to Mr Stroud to rent the property where it operates.
Big Island has also agreed to rent the Canning Vale site of the collapsed fruit processing and juicing company Old Valley, which includes a bottling and filling line, from Mr Stroud for $650,000 a year. It also has an option to buy the property, which Mr Stroud bought from administrators Pitcher Partners for $4 million two years ago, for $6.5 million.
In addition, Big Island has the right to buy up to 10.8 million shares in Mr Strouds Total Wine Solutions.
Mr Stroud, who chairs Big Island, will be paid $228,000 a year plus car. "
Big Island chief eyes froth off the top, Michael Weir, 13 April 2007 The West Australian
"Wine merchant and wireless technology group Wavenet International chairman Mick Stroud stands to be a big winner from his latest business venture, the $20 million float of a new premium brewery.
As well as Mr Stroud being the biggest shareholder in Big Island Brewing with a $6 million stake, according to the prospectus the company is buying his Perth Ice Works business for $2.2 million, leasing factory space from him for $810,000 a year and will take a major stake in his Total Wine Solutions distribution business for an undisclosed sum.
Big Island is attempting to raise $10 million at 40
Perth has seen a flood of boutique beer listings in the past six months and all are trading well below their issue price. Gage Roads Brewings shares closed yesterday at $0.30, Colonial Brewing Co owner Empire Beer Group finished at $0.19, well down on its $0.35 issue price in January, and shares in the fledgling Oz Brewing are trading at $0.11, almost half the $0.20 issue price in late December.
Only Little World Beverages, owner of Fremantles Little Creatures and the veteran of the group with almost 16 months as a listed company, has left shareholders feeling merry. Little World listed at $1 in November 2006 and finished yesterday at $1.69, recently hitting a $1.78 all-time high.
Big Island managing director Shane OHart, a former senior executive of Coles liquor division and former WA manager of global spirits giant Diageo, said the company would stand apart from its competition because of its bigger brewing capacity that would make it a "volume craft brewer, not a boutique brewery".
He said the planned capacity of 9 million litres a year, more than twice that of Little Creatures and Gage Roads, plus the ability to increase to 14 million litres would make Big Island one of WAs biggest brewers.
Big Island is keeping its branding and range of beers, developed by former Swan brewer Hugh Dunn, under wraps but hopes to start brewing by mid-2007 and launch its first products by the end of the year.
"This (premium) segment of the market continues to grow as beer consumers trade up to premium products," he said.
Mr OHart said Big Island did not plan to have its own brew-pub or restaurant but would wholesale packaged beer directly to the big liquor chains and tap beer in some pubs.
Mr OHart said the purchase of Mr Strouds Perth Ice Works, which has 60 per cent of the Perth ice market, gave the company an instant distribution network and infrastructure, with the business to be re-branded Big Island Ice.
According to the prospectus, the Perth Ice Works deal includes paying $160,000 a year to Mr Stroud to rent the property where it operates.
Big Island has also agreed to rent the Canning Vale site of the collapsed fruit processing and juicing company Old Valley, which includes a bottling and filling line, from Mr Stroud for $650,000 a year. It also has an option to buy the property, which Mr Stroud bought from administrators Pitcher Partners for $4 million two years ago, for $6.5 million.
In addition, Big Island has the right to buy up to 10.8 million shares in Mr Strouds Total Wine Solutions.
Mr Stroud, who chairs Big Island, will be paid $228,000 a year plus car. "
Labels: Beer News
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