Embattled Broo in the red in last quarter

Broo again found itself in the red in its most recent quarter, after a turbulent year for the struggling brewer, in which it announced it would be selling its main production site and lost another $290,000.

The day after the quarterly report and losses were announced, Kent Grogan, under his company Groges Holdings Pty, sold 10 million shares in the business.

It accounted for 5 per cent of his holding – he now owns 62.96 per cent of the company. The off-market share sale raised $160,000.

At the end of the last quarter (ending 30th September), Broo reported having $426,000 in cash and cash equivalents, but this most recent quarter recorded only $55,000 in reserve. In the same report, it estimated cash outflows for the next quarter will amount to $760,000.

In the last quarter, Broo advised it made $617,000 from sales, but this was not enough to offset high administration and staffing costs which totalled $741,000 in addition to the $152,000 spent on operating costs.

Director fees and salaries amounted to $37,000.

It has not yet engaged in a share issue this financial year, which has allowed the company to stay afloat in previous quarters.

The board has been bullish despite the ongoing losses, saying it “expects that it will continue to have negative operating cash flows in the short term” but the board said it is “satisfied that additional short-term funding will be secured to continue to fund operating activities”.

Last month it announced that it was planning on selling its Mildura Brewery after just two years of ownership, along with the Sorrento Brewhouse.

The two sites were part of Broo’s hospitality business, the most profitable division which made $2.3 million last year.

Earlier this year Broo also announced a distribution agreement with a Bundaberg-based hotel and bottleshop group, which is aiming to sell 2 million litres of Broo branded beer in the state, from a base of 500,000 litres.

It is also due the first installment of its 7-year agreement with Beijing Jihua Information Consultant next year, a deal with Broo values at $120 million.

Kent Grogan did not reply to requests for comment from Brews News.

Back to News