Endeavour Brewing Company has updated long-suffering shareholders on the company’s struggles, releasing delayed accounts for the 2021 and 2022 financial years.

The company recorded a loss of $1.35 million in 2021 and a loss of $176,000 in 2022.

In a report accompanying the delayed financials, company directors described 2021 as a “very poor year for the company”.

“The company’s major customer delisted all SKUs of product and the company had committed significant spend to a number of projects. The Endeavour Tap Rooms also was impacted by various COVID restrictions,” the report noted.

The board had previously attributed the delay in releasing the 2021 accounts to its former joint venture partner Applejack Hospitality not providing accounts for the joint venture operation.

The company described its 2022 results as showing a “significant improvement” despite the impact of COVID.

“The consolidated group incurred a loss for the year of $176,468,” the report noted.

“Endeavour Beverages PL incurred a loss of $376,783 (2021 loss $1,369,970) whilst Endeavour Tap Rooms PL derived a profit for the year attributable to the company of $200,315.”

The report noted the company expected a further loss of around $100,000 for the financial year just ended.

Cash depleted

In the 2020 financial year Endeavour Beverages received $5 million from the partial sale of its intellectual property following a trade mark dispute with Endeavour Drinks Group.

Woolworths Liquor Group had changed its name to Endeavour Drinks Group in 2016, before merging with Woolworth’s hospitality arm, ALH Group, in 2019 with the combined entity trading under the Endeavour Drinks Group name.

“There does continue to be frequent consumer and market confusion around “Endeavour” and we continue to work to fully resolve further confusion and Trademark issues,” directors noted in the latest report.

While the $5 million settlement in 2020 was a significant financial win for the small brewing company, the outcome was also challenging for the business with Endeavour Drinks Group’s Dan Murphy’s and BWS stores being the company’s major retail partner, according to its 2018 CSF prospectus. Both retailers delisted the beer following the settlement payment.

The settlement also led to a management split, with one group of shareholders – including co-founder Dan Hastings – calling for the company to be wound up with the cash remaining from the settlement returned to shareholders given the loss of the trademarks and what they perceived as being the lack of future opportunities for the business.

At the time of the failed windup bid, the company’s cash balance from the sale had fallen to $1.8 million. In the latest accounts, it has now fallen to $700,000.

Hopes pinned on Breakers

In an update to shareholders in February 2022, the company advised that it was moving away from the Endeavour brand and “soft launching” a new brand – Breakers, Good Beer for Good People – to test the market.

In its current update, directors advised there had been a delay in printing cans for the product, but had “strong committed orders of Breakers cans and other incremental opportunities underway.”

“Turning around and pivoting the business has not been an easy task especially with COVID lockdowns, conditions in the market, in particular for the craft beer industry arising from inflation, supply chain availability and costs, changes in market dynamics and now the current weakening consumer environment due to rapid interest rate hikes,” the Directors advised. 

Replying to questions from Brews News about launching a new product in such challenging conditions, director Ken Bromley said the trial had been successful.

“Current Management has been successfully testing both a local strategy and pursuing National opportunities,” Bromley advised in an email.

“Both have been successful, with an upcoming committed execution being Nationally distributed by a leading retailer, and growing support along the Sydney coastal fringe.”