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The company may need to raise more money in response to a query over negative operating cash flows, Beer brewer Broo has told the ASX. Along with estimated spending of $1.5 m in the December quarter, showing negative operating cash flows of $1 m and only $832 k in the bank, Stock market authorities pointed to Brooâs (ASX:BEE) September quarterly update.
Whether it would be able to continue funding its operations, it asked Broo. At an all-time low of 8.5c in early Thursday trade, after signing a $120 million distribution partnership in China Broo shares were trading well short of a year ago when its shares rose 30pc to 38.5c. Â
Broo said, âTo continue to fund its business activities, the board is satisfied that if required the company will be able to raise sufficient capital.â
To âraise funds promptly via a private placementâ, Broo said it had sufficient capacity. It also said it ânow anticipates that cash outflows for the current quarter will be less than forecastedâ and it expects cash receipts to âsignificantly increaseâ in this quarter.
Shares had more than halved to 16c, by May this year. The other being Gage Roads, whose shares are at 9.5c, Broo is one of two ASX-listed small cap beer stocks.
The company posted negative net operating cash flows and they are expected to decrease in the current and future quarters.
The Board is satisfied that, if required, the Company will be able to raise sufficient capital to continue to fund its business activities. The Company has sufficient share placement capacity under ASX Listing Rule 7.1 to raise funds promptly (without shareholder approval) via a private placement, if required.
The stock of Broo Ltd (ASX:BEE) traded at a current market price of $0.085 under the consumer staples sector and has witnessed a performance change of -70.18% over the past 12 months. The market capitalization of the company stands at $52.55 million and the number of shares outstanding are 618.25 million as at 08 November, 2018.
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