Mighty Craft has revealed the outcomes of its Board-lead strategic review, which was announced to the ASX on 25 May 2023.

It follows CEO Mark Haysman tendering his resignation as CEO and Managing Director effective on 3 July 2023 and the Board appointing Jess Lyons as Acting Chief Executive Officer.

Mighty Craft Chair Chris Malcolm said: “During the last six weeks, Mighty Craft’s newly appointed Board and interim CEO has progressed its review of all aspects of the company. It is very clear to us that the Mighty Craft business model requires urgent change.

“The cost base is disproportionate to the earnings profile, debt levels are excessive and further simplification of the business model are necessary. While there are some positive growth signs, we need to address these issues urgently to ensure a near term path to sustainable earnings.

“In terms of our early progress, we have expanded the asset realisation program to assist with the planned reduction of debt as well as already removed $4.4 million of cost from the business, ahead of further cost reductions to be executed throughout H1 FY24. We’re also assessing all options regarding the optimal future corporate structure for Might Craft, an element requiring further consideration. We will continue to keep the market updated on our progress in coming months.”

Malcolm currently serves as Chair of several companies including Whipper Snapper Distillery and previously served as executive Chair of Lark Whisky (previously Australian Whisky Holdings where he was CEO). He was also founding investor and Director of Topshelf International.

Mighty Craft said its Q4 FY23 sales were expected to be in the range of $21-22 million, representing approximately a 7.5% decline versus Q4 FY22 despite strong growth from Better Beer.

Interim CEO Lyons said: “Mighty Craft is facing some significant challenges, including consumer sentiment and cost of
living pressures, many of which are expected to continue in the medium term. In light of this, we must adjust our cost base accordingly. The Company has taken longer than anticipated to deliver sustainable earnings – along with a refreshed Board, I am committed to ensuring this is achieved as soon as possible.”

Mighty Craft’s assets include a 37% stake in Better Beer, founded in 2021 by two comedians known as The Inspired Unemployed. It also has investments in brands including Kangaroo Island Spirits and Adelaide Hills Distillery, which owns Mismatch Brewing.

The company said the Better Beer capital raise process was ongoing and expected to be finalised throughout Q1 FY24 – following execution of the Better Beer corporate restructure.

Better Beer eyes $20m capital raise