Year of expansion sees Brewdog profit dip as sales soar

Latest results from the Ellon business for the year to December 31 show administrative expenses almost doubled in the year from £7.77m in 2014 to £14.11 million as it ramped-up production and continued overseas expansion.

The drive saw staff costs rise to £10.02 million, up from £6.39 million in 2014 with headcount rising to 403 from 277 the prior year.

Meanwhile, operating profit dipped 17 per cent to £3.17 million (2014: £3.85 million) and pre-tax profits were down almost five per cent to £3.47 million (2014: £3.65 million), despite a £642,000 gain on the disposal of investments.

Brewdog said that it had incurred expenses such as the £17.61 million spent on plant, property and equipment in 2015 -more than three times the £5.35 million spent the previous year.

The company results show that it ended the year with £3.17 million in cash and cash equivalents (2014: £2.23 million), including £10.27 million raised from issuing new shares, £5.2 million of new borrowing and £2.31 million from a bond issue.

The business, which has been a record breaking crowdfunder, said its fourth round Equity for Punks drive had raised £10.27 million as of December 31, 2015 and cost £670,000 in transaction costs.

However, it was also disclosed that a £5 million bank loan was taken last year, which is “repayable on demand” and up for review on June 30, 2016.

It also issued £2,312,000 in non-convertible bonds last November, “to finance expansion,” with a maturity in November 2019 and with an interest rate of 6.5 per cent.

The group notes £12.1 million in capital commitments were “contracted for but not provided in the financial statements”.

Companies House records show Brewdog registered a new debt security with HSBC Invoice Finance (UK) Ltd on March 16, 2016, giving a floating charge security “over the whole of the property (including uncalled capital)”.

It also opened 16 bars in the 2015 year, taking its bar total to 45 globally, and the bars now account for nine per cent of the total beer it brews.

Sales in the UK rose almost 69 per cent to £33.4 million (2014: £19.8 million) and sales in Europe rose 16 per cent to £8.6 million.

Brewdog also notes a marginal increase in sales in the US and Canada to £765,000 (2014: £645,000) and under the ‘rest of world’ heading where sales rose to £1.9 million, up from £1.6 million in 2014.

Brewdog notes UK sales could have been higher had it been able to meet demand, but adds investment in 2015 to increase capacity, “both in the UK and overseas” provided capacity to support “years of sustained growth”.

A new 300 hectolitre (HL) brewhouse is being commissioned at its Ellon site and is expected to come online in April 2016 and Brewdog notes it has also installed a new high-speed canning line to work alongside its high speed bottling line at the Ellon plant.

A new brewhouse in Columbus, Ohio will also provide 400,000 HL of annual capacity when it comes online in August 2016 and Brewdog says it already has “contracts in place with distributors in 15 states who are ready and waiting for our first beers to roll off the bottling line in Columbus”.

In January Brewdog reported it was still £11.5 million short of meeting a £25 million target set its fourth round Equity for Punks, which closes on April 22, 2016.

Brewdog’s Equity for Punks, from which the company has raised circa £20 million to date, is not structured in the same was as the Kickstarter model which returns investment pledges if a funding drive fails to hit target.

Brewdog announced in February this year, plans to launch a US crowdfunding drive in May 2016.