East Imperial raises £325,000

New Zealand-based mixer producer East Imperial has raised approximately £325,000 (US$413,000) to expand in the US and Asia Pacific.

According to a London Stock Exchange filing, East Imperial is offering shares in the company at a price of 1.1p per share.

The proceeds from the share placement will be used to provide working capital and tap into the growth opportunity in the US and Asia Pacific.

The company faced a ‘lack of growth capital’ in 2023 which impacted East Imperial’s total case sales last year. Since August 2023, it has focused on reducing its costs.

To improve its margins, East Imperial implemented a number of initiatives in the last quarter of 2023, including moving customers to Free on Board (FOB) shipping terms (excluding New Zealand) and reducing logistical touchpoints.

Cost-cutting initiatives and margin improvement measures are expected to boost gross margins by more than 35% during 2024.

Anthony Burt, CEO and executive chairman of East Imperial, said: “Working capital constraints for a good portion of 2023 made for a challenging year and slowed our planned expansion.

“However, we navigated the operational and cost obstacles and implemented important initiatives to drive further sales while improving margins.

“Our focused development plans, combined with strong sales teams and experienced local partners, provide an exciting opportunity to capitalise on our investments in building a scalable platform for our premium beverages.”

The company said its native New Zealand market recovered strongly in the fourth quarter of 2023, with more than 39,000 cases shipped, representing £507,000 (US$644,000) in revenue. This was bolstered by a 13% price increase in July 2023.

Following funding from INL Investments in August 2023, East Imperial has created a US sales team in three states that have a strong base for growth: Florida, California and Texas.

East Imperial said it took longer than expected to establish the US base and secure distributors, and sales in China also grew slower than anticipated.

Asia Pacific is predicted to become a major contributor to East Imperial’s revenue in 2024 and beyond.

A significant volume increase and margin improvement is expected in China this year after East Imperial’s distributor, Wen Hua Hang Wine Spirits Company, put forward a development plan.

East Imperial called Singapore an ‘important gateway’ for the Southeast Asia region. The brand has a strong market route in Singapore, Malaysia and Hong Kong through its regional distribution partner.

Last month, East Imperial secured listings at the Mondrian South Beach in Miami, US, and five-star hotel InterContinental Amstel in Amsterdam.

East Imperial saw sales increase by 15.5% in 2022, boosted by double-digit gains in the US.