Broo celebrates 407% sales increase
Broo Limited given a market update to the ASX announcing it achieved a 407% wholesale sales increase in the first quarter to final quarter of 2017.
The massive sales growth was attributed to upgrades to its Mildura Brewery, which helped the company increase its domestic sales and increase distribution. Broo acquired the Mildura Brewery on February 2, 2017. The purchase gave Broo a commercial brewing facility to make its beers at and the existing beer brands produced on-site.
Broo products are now available in Queensland through Australian Liquor Marketers (ALM), with further states to follow.
It also detailed the success of its a seven-year distribution agreement with Beijing Jihua Information Consultant, which was signed at the end of last year.
The company said: “The agreement is binding on a ‘Take or Pay’ basis for 1.5 million litres of Broo Premium Lager beer products over the seven-year period with Jihua paying a fixed rate per litre. Based on the full seven-year term of the distribution arrangement, the aggregate distribution revenue generated for Broo is RMB602 million (approximately AUD $120m).
“This is an outstanding achievement for the company and the culmination of many years hard work.”
Broo also detailed progess made at its Mildura Brewery pub and Sorrento Brewhouse.
The brewery pub is continuing to see increases in patron numbers and sales volume, while the brewhouse has undergone extensive upgrades and refurbishments and is expected to opened for business later this month.
Broo said: “This is an exciting project for the company given its locality to the birthplace of Broo Limited.”
The brewer also posted its report for the second quarter with the ASX, which detailed net cash from operating activities of -$1.7m. The $1.55m receipts from customers was turned into negative for the first half after significant product manufacturing and operating costs, staff costs and administration and corporate costs.
Broo highlighted estimated cash outflows for the next quarter of $1.65m, but it added: “In the next quarter, the company is expecting to receive cash inflows that include payment of a $250,000 loan, and $750,000 in debt funding to be advanced from a director – related entity.
“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.”