CANADA: Company growth leads to FY loss for Brick Brewing
Brick Brewing Co. has seen its growth as a company result in a reverse in profits for its fiscal year.
The Canadian brewer said late last week that, for the year to the end of January, net profit of C$127,000 (US$124,585) in FY 2006/7 turned to a loss of C$2.6m. The reverse came on the back of a slip in full-year sales, to C$30.3m from C$34.8m.
"Due to Brick's success in growing its business, it no longer benefits from the Ontario small brewer tax reduction," said company founder and chairman, Jim Brickman. "The company incurred a production tax increase of $2.5m in the year compared to fiscal 2007, a difference between a profit and loss this past year.
"We knew we had our work cut out for us when we passed the small brewers volume threshold and we had invested aggressively in plant and infrastructure to seek to offset this tax loss" Brickman continued. "Unfortunately our productivity gains are improving more slowly than planned and at the same time we have been hit with unprecedented increases in some of our material costs."
The company also blamed the fact that the retailer The Beer Store is "owned by our competition" as providing "interesting challenges unique to the Ontario beer market".
"As a result, fiscal 2008 was disappointing financially, however our single most important objective is our commitment to streamlining operations and becoming as cost efficient a producer as possible," Brickman concluded.
In the company's final quarter, to the end of January, net sales fell by 17% to C$6.3m, with beer volumes down by 14%. Net earnings registered a loss in the quarter of C$1.1m, compared to a net loss of C$1m in the corresponding quarter a year earlier.
Canadian brewer Brick Brewing has named Jason Pratt as its new chief financial officer....
Reduced volumes and rising costs have seen earnings fall at Brick Brewing, which also said yesterday (9 September) that it has been hit by price promotion activity by its competitors....
Brick Brewing Co has partnered with Latis Imports to launch its specialty craft import portfolio....
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