Shares of Gage Roads Brewing Co Ltd [ASX:GRB] gained more than 9% in morning trading today, continuing a three-day run that sees them up 25% in total.
Why did Gage Roads Brewing shares do this?
The catalyst for the craft brewer seems to be an outstanding quarterly result that saw $3.9 million in cash generated. The company now has $7 million in cash reserves and access to $4 million of a $6 million credit facility.
All the key metrics looked good, with a 57% rise in branded beer sales, an increase in gross profit margins from 52% to 58%, and sales to independent retailers up 315% compared to last quarter.
Return to craft is working
These results are particularly pleasing for the company as they indicate that year one of their five-year ‘Return to Craft’ strategy is starting to work.
If this momentum can continue into the next couple of quarters, the company’s turnaround strategy will be looking very good for investors.
Analyst, Money Morning
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