By Andy Young
Coopers Brewery has recorded its 23rd consecutive year of growth, but despite sales and volume growth the South Australian brewer's profits have been hit by a write-down of the Mr Beer business in the United States.
Coopers saw beer sales increase by 3.3 per cent during 2015-16 to a record 81.5m litres. Within that packaged beer sales increased by 3.8 per cent, while keg volumes recorded "a small but pleasing rise of 0.8 per cent".
The Managing Director of Coopers, Dr Tim Cooper, said that the company's revenue for 2015-16 also increased, up by 4.6 per cent to $245.9m. That increase came despite margins being squeezed by competitive pressures in the market-place and higher malt costs.
Despite the increased sales and revenues preparation costs associated with construction of a malting plant at Regency Park, and a $7.5 million write-down of goodwill for the Mr Beer business in the US, meant that net profit after tax for the year fell 16.3 per cent from $28.9m in 2014-15 to $24.2m.
Dr Cooper said the write-down of goodwill for Mr Beer was required under Australian accounting standards.
“While the business initially returned good profits, recent competition from other DIY brewing businesses and the loss of some key accounts meant we had to recognise an impairment of goodwill,” he said.
“Coopers purchased a majority share of Mr Beer in 2011. Our initial $11.3 million investment has so far returned $5.3 million.”
The new malting plant at Regency Park will cost the brewer $63m, which Dr Cooper has said is the single largest item of capital expenditure in Cooper's history, but he added that the plant will guarantee the company's supply of high quality malt for future growth.
“The work is being undertaken by South Australian firm Ahrens and comprises three steeps, four vessels, a kiln and grain silos, connected to the brewery by an overhead gallery,” he said.
“Work is progressing well and is on line to be completed by late next year.”
The plant will produce at least 54,000 tonnes of malted barley a year, one-third of which would be used by Coopers with the remaining two-thirds available for export.
“The new plant will guarantee our supply of high quality malt for future growth,” he said.
“It also marks Coopers’ return to the malting business after the sale in 2002 of Adelaide Malting Company to Ausbulk to help fund the move from Leabrook to Regency Park.”