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 Broo’s (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.
Broo said, “To continue to fund its business activities, the board is satisfied that if required the company will be able to raise sufficient capital.”
To “raise funds promptly via a private placement”, Broo said it had sufficient capacity. It also said it ‘now anticipates that cash outflows for the current quarter will be less than forecasted’ and it expects cash receipts to “significantly increase” 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.
Disclaimer
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkinemedia.com and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.
There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.
Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.
As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.
