Mighty Craft's financial results a story of tailwinds & headwinds

Mighty Craft’s sales growth was solid this past financial year with all volume sales targets realised and revenue growth up by 200 per cent up to $62.6m. Strong growth in beer was led by $19 million in sales of Better Beer which launched in October 2021 and Mighty Craft now has 334K litres of whisky under maturation.

The Whisky Syndicate Fund launched in October has raised $3.8 million of its $10 million target and this will be used to support its Whisky Acceleration Program. Mighty Craft has now completed export agreements that will see its whisky land in China, Europe and North America in late 2022. Mighty Craft's whisky falls under two brands: 78 Degrees and Hidden Lake.

Mighty Craft’s non-alc products - Mismatch Zero Pale Ale, Hills Cider no alc Apple, and Hills Cider no alc Apple with Lemon and Rosemary - are also now distributed nationally through Woolworths taking the brands to a whole new market and Better Beer is being distributed in New Zealand by DB Breweries.

However, despite these wins, the business is also reviewing its structure with its earnings performance having fallen short.

Mighty Craft’s Managing Director, Mark Haysman said, “Despite the strong growth performance, the earnings performance was behind expectations driven by poor venue performance, COVID related challenges in the on-premise channel and inflationary pressures later in the year.”

In the final quarter of FY22, Mighty Craft reduced its overhead cost base and contracted its workforce while retaining key management. It is also executing a capital management program, including the sale and lease back of the Jetty Road property in Dromana, divesting its non-core assets, including its Mighty venue in Moonee Ponds, and moving to a leaner operating model. These measures are expected to save the business around $2 million per year.

The Adelaide Hills Group has been absorbed into Mighty Craft’s structure, but it fell well short of earnings expectations taking $18.2m. On-premise accounts for 40 per cent of AHG’s business and so took a big hit in the first half of FY22. Manufacturing has been put on hold until the second half of FY23.

After a year of significant expenditure across the Mighty Craft network, here's hoping the forecast is for greater tailwinds than headwinds for Mighty Craft in FY23.