Losses continue but revenues up at Broo
Broo has renewed growth activity this year and quarterly revenues have risen, but the company is still in a loss-making position according to a report filed to the ASX last week.
In the three months to March 2021, Broo made $516,000 in receipts from customers, up from $269,000 in the previous quarter according to the statement.
However, manufacturing and other costs added up, resulting in a $1.2 million loss for the quarter. $183,000 was paid to Broo CEO Kent Grogan, which includes a payment of $84,000 for “accrued balances from previous period of non-payment”. No payments were made to non-executive directors during the quarter.
This brings total losses for the year to date to $3.0 million, with $180,000 in cash at the end of the period.
Revenue from customer receipts has been declining since the second quarter of its 2019 financial year at the end of 2018, when it reached a revenue high of $989,000. It saw its first increase in two years at the end of last year.
As part of its renewed efforts to push its brands, Broo attended Townsville and Gold Coast Australian Liquor Marketers Trade Shows this year.
The struggling company said in an investor presentation that its Broo Premium Lager has become a “leading brand” within the ALM Owned and Exclusive Brands Portfolio, as a result of it achieving “unprecedented sales”.
The beer producer reported that it had extended its original deal with ALM back in February, following the news the previous month that the ‘Take or Pay’ deal with a Chinese distributor had fallen through.
According to figures in the presentation, it sold under 1,000 cases in February, which had risen to above 7,000 by April.
Despite this reported increase, as of March, Broo retained an inventory valued in excess of $500,000, having received its first order from Carlton & United Breweries back in December, which the company paid for following a capital raise.
In last week’s quarterly announcements, the company declared that it had prepaid $855,000 for a production order under its agreement with CUB for stock to be received.
At the same Broo also announced that it had drawn down against a series of loans at the end of March, presumably to pay for the purchase.
The company said its initial launch activities have focused on packaged beer in Queensland but it is looking to expand into other states and territories, and is working with ALM to coordinate this expansion into both off and on-premise markets.
It will start with the on-premise rollout in Queensland, offering Broo Premium Lager in 50L kegs, in addition to the new Broo Hopper 3.5% mid-strength beer, which it identified as one of the fastest-growing sections of the beer market.
Both brands will be offered at “competitive pricing with significant in venue support [sic],” it said.
During the period Broo also released its first television commercial, which it says will form the basis for further marketing and promotional efforts going forward.