Coopers’ shareholders enjoy pay-out bonanza
It was a good year to marry into the family that owns Australia’s largest locally owned brewer, Coopers Brewery, Australian media joked in January 2014. Its 143 shareholders were showered with AUD 14.7 million (EUR 9.4 million) in dividends in fiscal 2013 (ending June 2013), making it the biggest pay-out in the brewer’s 150 year history.
Coopers’ annual report, dispatched to its tiny shareholder base, of whom 90 percent are linked – via birth or marriage – to the brewery’s 19th century founder, Thomas Cooper, reveals the generosity of directors to relatives.
The dividend payment represents a recent strategic shift by the board, led by Chairman Glenn Cooper, to funnel a greater proportion of profits into the hands of its family shareholder constituency.
Insiders say the decision to increase dividends was driven by the ultimately failed AUD 420 million (EUR 270 million) takeover bid in 2005 by what was then Lion Nathan, which tempted the sprawling Coopers clan with a lot of cash in an effort to gain control of the brewer.
Because of Coopers’ constitution, it’s impossible for shareholders to sell their stock to anyone outside the family. Dividend payments are the only way to derive an income from their investment.
In the past, shareholders often had to forego big dividends (in 2002, total dividends amounted to only AUD 1 million), not least when Coopers ploughed most of its profits into building a new brewery and later into expansion programmes.
The 2013 dividend pay-out of AUD 14.7 million is higher than the previous highest dividend cheque of AUD 11.6 million in 2011. It still represents a 21 percent improvement on the total dividends of AUD 11.5 million in 2012.
Coopers certainly can afford the pay-out. In 2013 its net profit grew 13 percent to AUD 30.8 million (EUR 19.2 million), while turnover rose 16.1 percent to AUD 216 million (EUR 139 million).
Total beer sales for the six months ending December 2013 rose 6.3 percent and sales for the calendar year rose 4.7 percent to 720,000 hl, defying the continued slump in national beer volumes.
Coopers is now the largest Australian-owned brewer, following the takeover of Foster’s by SABMiller in 2011 and the full takeover of Lion by Japan’s Kirin in 2009.
It has raised its share of the Australian beer market to 4.5 percent, from about 3.5 per cent in 2010, and has benefited from strong demand for its portfolio of beers as well as recently licensed international brands such as Sapporo and Carlsberg, which it began to brew in 2012. Growth in international brands accounted for about half of Coopers’ total sales growth in 2013.
