Little Creatures brewer Little World Beverages has had a privileged year on the stock market, laying claim as the Australia’s only listed boutique brewer and enjoying a 60 per cent share price return since it debut on the stock exchange in November 2005.
Little Creatures brewer Little World Beverages has had a privileged year on the stock market, laying claim as the Australia’s only listed boutique brewer and enjoying a 60 per cent share price return since it debut on the stock exchange in November 2005.
But the Fremantle-based brewer has this month been forced to share the limelight, and investors’ hard earned cash, with three WA boutique brewers, which have collectively raised $12 million ahead of stockmarket listings.
The biggest is Empire Beer Group, which is expected to close its $6.4 million capital raising this week after revising a planned $10 million offer. It plans to list by the end of the year.
Also hoping to be on the trading boards in the next fortnight is Oz Brewing, which closed its $1.5 million capital raising last week.
It plans to develop a pub brewery in Fremantle under its Mad Monk brand, and is considering developing a venue near Dunsborough.
Beating both pub breweries to the trading boards is Gage Roads Brewing, which raised $4 million and, at the time of printing, was expected to be trading on the Australian Stock Exchange.
Gage Roads managing director Peter Nolin said the proceeds of the float would be used to fund its east coast sales assault, adding that recent development work at the brewery’s Palmyra site would double production capacity to 2.5 million litres next year.
WA Business News understands that Empire revised its capital raising this week after deciding to issue shares to the company controlled by Colonial Brewing Co founder Ross Smith instead of a cash payment of $3.6 million, plus 1.7 million shares and 2.7 million options.
It was understood that Empire intended to release a supplementary prospectus.
WA Business News also understands that Colonial’s other shareholders were offered shares in Empire for their stake in the business.
Empire Brewing management, which includes Fremantle Dockers vice president and Gryphon Minerals chairman Mel Ashton and former Foster’s executive Phillip Gallagher, has been keen to lock Mr Smith out of the beer business for the next two years.
In its prospectus, Empire said it would pay Ross Smith’s Golden Hind $12,500 a month for a period of two years as long as he did not compete with either Empire or Colonial.
It was unclear at the time of printing whether those details have been changed in the supplementary prospectus.
Some stockmarket analysts have questioned whether the newcomers would enjoy similar trading success to Little Creatures.
Bell Potter Securities head of wealth management Heather Zampatti said investors were likely to select just one or two companies in the sector.
“There are only so many funds to go around and you can’t support them all,” Ms Zampatti said.
“We have had a rush of listings for investment companies and utilities this year and the market found those really hard to digest. It is difficult when there are a lot of listings in one sector because investors spread their cash around many sectors in order to maintain a balanced portfolio.”
Macquarie Financial Services state manager Rob Johnston, whose stockbroking firm backed Little World Beverage’s $21.6 million capital raising, said while there was plenty of cash sloshing around the market, investors needed to be mindful of the long-term outlook for each business.
“Little Creatures is a great business, but breweries are a lot of hard work,” Mr Johnston said.
“At the end of the day, these businesses are competing with companies with a lot of money and vested interests.”
