Shareholders of Sydney’s Endeavour Brewing appear closer to learning the beleaguered company’s financial position with the brewery advising it would soon be holding an Extraordinary General Meeting.
In an email to shareholders over the Easter long weekend, recently-installed director and company secretary Ken Bromley advised a date would be set for the EGM later this month.
In the email, Bromley advised that the company’s overdue accounts for the 2019/20 financial year are ‘well progressed’ with the delay blamed on its accountants being unable to access company records until 25th November 2020, when the new board was granted access.
“The Board’s strong preference is to hold the EGM with signed off 2020 accounts so that all shareholders can make informed decisions on the strategies to be presented,” the email noted.
It was the first communication that most shareholders have received since Bromley notified shareholders on Melbourne Cup Day last year of a board spill that saw previous directors and founders, Dan Hastings and Andy Stewart, removed from their roles.
In the November 2020 email, Bromley advised that the decision to remove the directors was made by “the majority of shareholders”. Brews News is not aware* of any of the 585 shareholders created through the equity crowdfunding being briefed on or invited to vote in the board spill, despite the company’s crowdfunding prospectus promising investors they would have a voice.
“You will own ordinary shares and have the ability to vote,” the prospectus advised.
Last weekend’s email advised the company had re-engaged co-founder Ben Kooyman “to support licensing requirements and as Founder, Head of Sales and Marketing and Business Development”.
Kooyman quietly was re-engaged on 1st December 2020, shortly after the board spill. He had been employed as CEO at the time of the equity crowdfunding campaign.
His re-appointment follows an August 2020 company announcement that he had “made the decision to resign in May…as Managing Director and Chairman of the Board”. That announcement also advised of Dan Hastings’ appointment as managing director.
Last weekend’s email advised that now Hastings has left the business and the company’s Queensland office, where he was based, has been closed “to consolidate the company’s operations in NSW”.
For the majority of shareholders, the reasons behind the board machinations continue to be shrouded in mystery. However, real concerns have been raised by the announcement that Endeavour brand SKUs have been deleted from Dan Murphy’s and BWS stores nationally.
The company’s national ranging in 225 Dan Murphy’s and over 900 BWS stores was highlighted in its 2018 prospectus as being its “core business model”.
A potential note of hope for investors is that they will also be briefed on a capital return, following the $5 million sale of one of Endeavour’s intangible assets in 2019.
This is believed to relate to the settlement of a trademark clash with Endeavour Drinks Group after Woolworths Liquor Group changed its name to Endeavour Drinks Group in April 2016.
Endeavours Brewing’s 2019 financial report noted the funds would be settled in January 2020, though shareholders have not been updated since.
What remains of this amount for a capital return is unclear. Endeavour’s last published accounts, for the pre-COVID 2019 financial year, showed a loss of almost $600,000 on top of a $278,000 loss the previous year.
The company’s accumulated losses in the 2019 report were $2.2 million.
Brews News has reached out to each of Endeavour’s directors multiple times since November 2020 without response.
*Since the publication of this article, Brews News has been advised by the company that the shareholder vote included 38.7% of the CSF investors.