Broo Holds Two AGMs Back To Back

As the few readers of this blog would know, I am a shareholder in Broo, a craft brewing company which is listed on the ASX.

As a recap, I acquired most of my shares in early 2011 when, as an inspired marketing stunt, the founder of Broo offered a number of shares per slab for everyone who bought a slab (up to a maximum of 50 slabs) online from his venture. I bought two slabs, and then, a few years later after it listed on the ASX and was short of cash, stumped up 36 cents to buy another 20 shares, giving me 120 shares in the company.

The company has, this week, marked 2 years since it was suspended from trading on the ASX. At some point in this period, I framed and hung the ornamental share certificate I was emailed 13 years ago onto the wall behind my toilet bowl, as a symbol of how much value I ascribe to those shares.

Yesterday was another landmark day in the recent history of Broo. It held AGMs for both 2022 and 2023 back to back.

I did not bother attending the AGMs. I was en route to the Station Hotel in Footscray to start celebrating with two of my friends the fact that one of them has just started his pre-retirement leave (something similar to what I am still enjoying for another two months). We ended up doing yum cha in a Chinese restaurant in the Footscray Market, followed by some drinks at various other locations around inner Footscray.

Today the three of us are pondering whether drinking bourbon and cokes around a pool table at the back of the Courthouse Hotel (a rather rough pub) in Nicholson Street Footscray makes us bogans.

Anyway, back to discussing my nominal investment in a craft brewing company.

The AGM results and other recent company announcements are accessible through the Commsec app, so I read through them this morning. In summary, the remuneration report for both years was adopted, and the three directors were reelected, two in one of the AGMs, and one in the next.

The AGM seems to have been very vanilla, as the only votes against the resolutions were by proxy, so no disgruntled minority shareholders showed up to vote against them. The proxies voting against the resolutions added up to just under 45 million shares, or a bit under 20% of the votes exercised. 45 million shares, if they were valued at the 0.9 cents they last traded at in May 2022, would still be worth about $400,000, slightly less than what my entire diversified share portfolio of mostly blue chips and ETFs is worth. So whoever sent in their proxies in absentia with directions to vote against the current board does have a lot of skin in the game.

But company AGMs are rarely a place where disgruntled minority shareholders will air their grievances (aside from the serial pests who pass themselves off as shareholder activists). I do note from my google searches that there was an attempt by Kent ‘Groges’ Grogan, the founder of Broo, who was ousted just over 2 years ago, to have the company wound up in the second half of last year in the Federal Court over monies owed to him. Obviously that has been resolved in some way or other, as Broo still exists as a corporate entity.

An activities report from 30 April on the Commsec app indicates that Broo is well advanced into its plans to relaunch one of their craft beer brands and resume producing beer, and is also getting new investment into the brand.

I wish the directors well. Trying to resurrect a beer company is a noble aim, and I do not envy those who wear the crown of thorns which is the directorship of a struggling listed company, people whom I suspect have probably invested a lot of their own funds and those of their friends and family into trying to pursue this particular dream.

But I am a realist. All of the money which was raised in the Broo IPO in 2016 was spent on buying the Mildara Brew Pub and the land in Ballarat intended for a brewery. Those assets are all gone, and there is little remaining capital. In the 13 years that I have followed Broo closely, each and every endeavour has not ended well, or even, for that matter, gotten far off the ground. If the directors were to go out to ordinary shareholders like me with another rights issue, I am happy to come up with some loose change to acquire more shares, but that is more out of amusement value than any expectation that Broo is actually, under its new management, going to suddenly change the direction of its fortunes.