Coopers keeps it in the family

13 Jan, 2014 05:05 AM
It is almost impossible for Coopers shareholders to sell their stock to anyone outside the family

IT WAS a good year to marry into the family that owns Australia's largest locally owned brewer Coopers Brewery, with its 143 shareholders showered with $14.7 million in dividends in fiscal 2013, marking the biggest cash splash in the beer company's century-and-a-half history.

Coopers' annual report, dispatched to its tiny shareholder base, of whom 90 per cent are linked - via birth or marriage - to the brewery's 19th century founder, Thomas Cooper, reveals the generosity of directors to their kith and kin as net profit grew 13 per cent to $30.8 million.

The dividend payments are racing ahead at almost double the rate of profit growth and represent a recent strategic shift by the board, led by chairman Glenn Cooper, to funnel a greater proportion of earnings into the hands of its family shareholder constituency.

The decision to increase dividends was driven by the ultimately failed $420 million takeover bid in 2005 by what was then Lion Nathan, which dangled a huge amount of money in front of the sprawling arms of the Cooper family to gain control of the brewer.

A peculiar, even slightly eccentric, company constitution means it is almost impossible for Coopers shareholders to sell their stock to anyone outside the family, with dividend payments the only way to derive an income from their investment.

The record 2012-13 dividend payout is easily the biggest to shareholders from Coopers since it was founded in South Australia in 1862, eclipsing the previous highest dividend cheque of $11.6 million in 2011 and a 21 per cent improvement on the total dividends of $11.5 million in 2012.

The latest Coopers annual report shows fully franked dividends amounted to $12.75 a share for the 2013 financial year and included a $1.50 special dividend a share to mark the 150th anniversary.

In 2001-02, total dividends of only $1 million were paid out to shareholders.

The annual report reveals a quirky share structure split across founder Mr Cooper's two wives and their descendants that has actually helped keep Coopers family owned for more than 150 years, avoiding some of the family fights, bust-ups and vendettas that have led so many family businesses into the arms of outside buyers or the corporate graveyard.

Coopers' share capital base includes 15,553 ''class A'' shares that are solely owned by family members who trace their lineage to Mr Cooper's first wife, Anne, with 15,953 ''class B'' shares owned solely by children born to Mr Cooper's second wife, Sarah.

A larger pool of 1.033 million ''class C'' shares can be bought and sold by both branches of the Cooper family, while a final tranche of 86,591 ''class D'' shares is a byproduct of the doomed Lion Nathan bid.

Coopers is now the largest Australian-owned brewer following the takeover of Foster's by South Africa's SABMiller, while Lion is owned by Japanese conglomerate Kirin.

It has raised its share of the Australian beer market to 4.5 per cent, from about 3.5 per cent in 2010, and has benefited from strong demand for its suite of beers as well as recently licensed international brands such as Sapporo and Carlsberg, which it began to brew in 2012.



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