Broo Limited has reassured investors that its ambitious brewing ventures will soon bear additional fruit, as its cash supplies continue to diminish.
Receipts from Broo’s customers totalled $816,000 for the second quarter of FY18, the company revealed to the ASX on Wednesday.
These cash inflows were significantly outweighed by product and manufacturing costs ($665,000), advertising and marketing costs ($87,000), staff costs ($428,000), administration and corporate costs ($505,000) and interest on loans ($24,000).
This meant the company had cashflow deficits of $880,000 for the quarter and $1.71 million for the first half.
At the end of the quarter, Broo – which raised $10.5 million by listing on the ASX in October 2016 – had total cash and cash equivalents of $315,000 and a loan facility of $845,000 was fully drawn.
The company estimates total cash outflows to be $1.65 million in the third quarter, commenced January 1.
“In the next quarter [Q3], the company is expecting to receive cash inflows that include repayment of a $250,000 loan, and $750,000 in debt funding to be advanced from a director-related entity,” Broo said.
“In addition, the company will be receiving revenues in the next quarter from its beer product sales, contract brewing services for third parties, and from trading operations at its hospitality venues including the Mildura brewery pub and the Sorrento Brewhouse.”
Mildura at capacity
Broo said its Mildura brewery “continues to operate at capacity” since commissioning of new facility upgrades began in September.
“This has enabled the company to increase domestic sales and increase distribution. Products have now been made available in QLD via Australian Liquor Marketers Pty Ltd (ALM) with further states to follow,” the company said.
“Sales have been very positive as evidenced by the accompanying chart. The first quarter to the final quarter of 2017 achieved a wholesale sales increase of 407 per cent.”
The company said stage one of Sorrento Brewhouse – its new brewpub in Sorrento on Victoria’s Mornington Peninsula – is due to open this week.
“This is an exciting project for the company given its locality to the birthplace of Broo Ltd,” the company said.