Savor doubles down on hospitality after dropping Moa Brewing

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Savor buys Amano (pictured here), Ortolana and The Store, as part of its focus on growing its hotel business.

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Savor buys Amano (pictured here), Ortolana and The Store, as part of its focus on growing its hotel business.

Savor Group is buying three central Auckland restaurants as it doubles down on hospitality after selling its unprofitable Moa Brewing business.

The NZX-listed company has agreed to buy Britomart Amano, Ortolana and The Store sites from Hipgroup for $11 million in cash and stock.

Savor is focusing on bars and restaurants after deciding last month to cut losses and sell its original investment, Moa Brewing Company, which had not made a profit since the company listed in 2012. The new ventures hotel companies will immediately add about $3 million to annual operating profits and savings are expected by merging operations, the company said.

“The acquisition of these sites, combined with the disposal of Moa Brewing, provides the group with a solid financial basis for future growth,” Savor Chairman Geoff Ross and Chief Executive Lucien Law said in a statement.

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The sale of the Moa Brewing business simplified Savor’s operations and the group was now in a stronger position to secure financing to fund its future growth plans, they said. Moa cost about $1.5 million in working capital and more than $1.6 million in overhead per year, they said.

Savor will pay Hipgroup $7.15 million in cash, $1 million in Savor stock and an additional $2.85 million in cash in one year.

The purchase is expected to settle on April 8 and will be funded by $7 million in new debt and $6 million by the sale of shares at 17.67 cents each.

Shares of Savor rose 5.4%, or 1%, to 19.6 cents when the market opened at 10 a.m.

Savor expects to have about $7 million in cash after the purchase, which it says will strengthen its balance sheet and provide funds for future growth.

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