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Growth set to continue for Brick Brewing Co as H1 2018 shines - results

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  • Net sales in first half of fiscal-2018 climb 16% to CAD27.4m (US$22.5m)
  • Net profits in six months to end of July slide 21% to CAD1.9m as one-off costs bite
  • Operating profits dip 7% to CAD4.7m

Brick Brewing Co has seen sales growth continue throughout the first half of its fiscal year, although squeezed margins and one-off costs in the period have affected the bottom line.

The Ontario-based craft brewer said earlier today that sales in the six months to the end of July increased by 16% on the corresponding period a year ago. The rise marks a deceleration in growth, with the top-line having jumped by 21% in the first three months of fiscal-2018.

In the second quarter, sales rose by 13.5%, although net profits fell by almost a third. Operating profits in the three months slipped by 15%.

Brick flagged "cool, wet weather in recent months", while increased retailer fees and duty put pressure on margins. At the same time, the country's contract manufacturing business posted a sales lift of 24% - the unit traditionally generates lower margins than Brick's branded products.

Having had to deal with a CAD319,000 one-off cost in Q1, related to the planned closure of its brewery in Formosa, profits in the second quarter were hit with a further one-off for the same reason, this time for CAD381,000.

"With the recent completion of the Kitchener expansion project, we are now able to realise the optimum operating footprint," said CEO George Croft. "The expansion coupled with the move from two sites to one will generate annual recurring savings of CAD600,000."

Earlier this week, Brick announced the sale of the Formosa facility to a buying group headed by Zhang Haoliang, for CAD2.4m.

To read Brick Brewing Co's official results statement, click here.

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