“It was an easy decision”: Good Drinks sells gaming licenses for $4.9m to fund QLD growth

In a decision described as easy by Good Drinks Australia (ASX: GDA) CEO John Hoedemaker, the WA brewer has chosen to offload 15 gaming licences and use the $4.9 million sale to fund redevelopment of the iconic Joe’s Waterhole on the Sunshine Coast.

Slated for completion in five months, the project will see GDA own four breweries across Australia, with the group already operating a large-scale facility in WA’s Palmyra which is undergoing an upgrade over the next five years to eventually produce 30 million litres of beer per annum.

The company also operates the Gage Roads Freo Brewery just outside of the Perth CBD, as well as Atomic Brewery in Sydney’s Redfern. GDA also comprises popular craft beer brands and drinks like Matso’s, Alby, Hello Sunshine and San Miguel.

Speaking with Business News Australia, Hoedemaker said that selling the gambling licences was an easy decision for the group, which is aiming to transform Joe’s Waterhole in Eumundi into a Matso’s brewery before the end of 2023.

“Matso’s is one of our most successful brands nationally. It was born out of Broome and our learnings there was that being part of a domestic tourism location really helped communicate the brand's essence to lots of Australians. For over 20 years, that brand has grown very successfully,” he explained.

“What we wanted to do is emulate that experience in Queensland. Joe's Waterhole is going to be committed to Matso’s brewery. It's directly across the road from the Eumundi market, which is one of the larger tourist attractions in the state.

“For that brand, gaming isn’t part of what we wanted to offer customers when they learn about Matso’s. It was an easy decision for us to sell the licences when the sale process became available.”

The 3,000sqm site in Eumundi will be able to host up to 500 people and produce about a million litres of beer per annum, which Hoedemaker says will produce enough beer for visitors who pass through the venue.

Accommodation will also be upgraded from four bedrooms to six bedrooms above the public bar.

“Our hope is to maintain the front Queensland bar as an experience in itself, not as a museum piece, but a testament to the traditions of hotelling in Queensland,” Hoedemaker said.

“We're opening up the side of the property to provide a bit of street access and some visuals towards the rear of the block where we're converting that into a more open Australian-country shed style building with Matso’s brewery in it, a number of bars and the full kitchen.

“Our venue strategy is all about creating experiences for our brands in markets outside of WA. It's about having one venue in each key market that really creates a consumer touch point for a particular brand.”

When asked if the GDA had its sight set on another venue, Hoedemaker noted the company was looking into setting up a Gage Roads brewery in Queensland.

“We don't have much more of an expansion plan. We are looking for another site in Queensland to house the Gage Roads brand,” he said.

“But gaming isn't part of our business plan or philosophy or strategy. And if we were to find a site that had gaming, we would be likely to sell it off as well. In WA, there's no gaming in venues at all so that wasn't a decision we came across.”

The recent sale of the licences comes three months after GDA recorded an 80 per cent uplift in profit and managed to double its retail market share during the first half of FY23.

The unaudited results indicated revenue rose to a record $59.2 million, with the group chalking up $6.1 million in EBITDA - a ‘strong result given softer macro-economic conditions’.

Revenue growth was most pronounced in NSW and the ACT, rising by 115 per cent to $2.6 million, but the company’s biggest supporters remained in its home state of WA where it generated $24.2 million of revenue - up 23 per cent.

At the time the results were announced, Good Drinks claimed the Gage Roads Single Fin Summer Ale was the number one independent craft beer in Australia - achieving sales of 20 cans/bottles and five pints of the drink every minute.

“The Gage Roads site in Fremantle is a spiritual home for the brand - you can immediately get an understanding of what the Gage Roads brand is all about, which is that feeling of coastal freedom you get when you're at the beach,” Hoedemaker said.

“That’s the same with the Matso’s brand in Eumundi and also the Atomic brand in Redfern.”