I recently gave a new name to the weekly soiree my friends and I conduct. It’s called “The Wine and Whine” (I should copyright that).
The W&W is a safe space, often on my couch, where we crack open a bottle of Pinot Noir and whine about anything, from the state of the world, global warming to men, work, and the plight of the polar bears.
It’s cathartic, and you should try it.
Supporting many future W&Ws is Digital Wine Ventures (ASX: DW8), an integrated trading, payment and order fulfillment platform connecting alcoholic beverage suppliers with buyers to streamline the fulfillment process.
The Company has recently sold their National Distribution Centre (NDC) to the tune of $4.8 million. The move was strategic to bolster the Company’s balance sheet and gives flexibility when it comes to warehousing capacity and expansion.
For now, DW8 is leasing the NDC from their new landlord. The warehouse is located in Barnawartha, just outside Albury-Wodonga and gives DW8 over 7,000 square metres to play with, storing delicious wine and other liquid yums.
CEO of DW8, Dean Taylor said: “We are very pleased to have completed this transaction. Beyond the $4.8m working capital that it releases for the Company, it provides DW8 with a highly experienced property partner who can assist us in the development of the additional capacity required to support future growth.”
The warehouse’s position is central to the Company’s strategic logistics network along the east coast. Due to the streamlined nature of this network DW8 is able to facilitate next day delivery to 85% of Australia’s population.
Despite little customer overlap between the two business divisions currently operating, DW8 sees ample opportunity for cross selling between their ‘Trading’ and ‘Fulfilment’ segments. Their ability to provide an end-to-end experience has increased following their recent acquisition of beverage marketplace Kaddy, which boosted their Trading business. Synergies of this acquisition as well as a reduction in operating costs are expected to be realised over the course of the year.
The last quarter saw operating revenue jump 78% on the prior quarter to $5.4 million, thanks to recent acquisitions and strategic operation. The Company closed out the quarter with $8.4 million in the bank. With operating outflows at $3.6 million the decision to sell and leaseback their NDC is an effective way to lengthen their cash runway.
The preemptive move to sell the NDC hints to bigger plans leaving investors wondering not if but when the Company will expand further.
In the meantime, hop on the couch and whine away my friends.
Samantha Freidin is a business journalist at Emerald Financial whilst also completing a Masters of Marketing and Digital Communications at Monash University.
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