Good Drinks Australia (GDA), home to a number of drinks brands including Gage Roads, Matso's and Alby, has submitted a formal request to be delisted from the Australian Securities Exchange (ASX). It will seek approval for the delisting from shareholders at the next AGM on November 28; if approval is granted, the proposed delisting date as per today's ASX announcement is December 30, 2024.
In the announcement, which comes a day after GDA requested a trading halt, the company's board of directors stated a belief that "the Company remains significantly undervalued by the market when compared to typical industry metrics such as sales volume, revenue, market share, and brand positioning."
The board also expressed confidence that "operating as an unlisted public company, and continuing to focus on growing market share, will allow the Company to achieve a valuation more closely aligned with industry metrics. This could be realised through a potential trade sale or asset sale."
Good Drinks Australia – then operating as Gage Roads – floated on the ASX in 2006. In 2009, Woolworths acquired a 25 percent share in the business, before Gage Roads bought back those shares in 2016 as part of their "Returning to Craft" strategy. The following year, they secured pouring rights at Perth's Optus Stadium, one of a number of major partnerships, and in 2018 Good Drinks Australia was launched.
Alongside its Australian drinks brands, the company also distributes a number of international brands in Australia, including Coors, San Miguel and Rekorderlig Cider. Earlier this year, they took the decision to shutter the beer brand Atomic, with Mountain Culture since taking over Atomic's former brewpub home in Redfern.
In today's ASX announcement, managing director John Hoedemaker said: "Good Drinks' share price performance in recent years has not reflected the inherent value of the business for some time and, as a listed company, remains at the mercy of macro-economic and capital market factors that are unrelated to us, as well as being beyond our control.
"We believe that aggressively pursuing a strategy to grow GDA proprietary brand sales volumes and market share is a more effective way to create value for Good Drinks shareholders. Prioritising this strategic investment in sales and marketing to grow volumes, rather than a focus on bottom-line earnings, is more suited to an unlisted company environment.
“In pursuing the Delisting strategy, the Board is committed to maintaining strong governance and continuous disclosure obligations as an unlisted public company. Importantly, we look forward to communicating directly with our shareholders, developing and executing on our strategy without continually revealing our plans to competitors in a listed company environment.
"We have enjoyed a positive relationship with the ASX, and success as a listed public company. With a long history of positive operating cashflows and a sustainable underlying business that no longer requires access to equity capital as a listed public company, we feel that the timing is right for Good Drinks to pursue the next phase of its growth in an unlisted public company structure."
Read the full announcement here.
