Mark Leftly: Brewer's fundraising plan is a lot to swallow
Outlook Tactical Nuclear Penguin is a beast of a speciality stout that, at an ABV of 32 per cent, is seven and a half times the strength of the wildly over-rated black stuff that Guinness churns out.
This imperial stout also retails at around £40 a bottle, so isn't really a session bevvie – not that many people could survive a skinful of this chestnut brown brew.
The beer is one of a number of frankly insane (but very tasty) craft ales and lagers that James Watt and Martin Dickie have produced since starting BrewDog as 24-year-olds in 2007.
This Aberdeenshire-based brewery has a loyal following and fame has spread as far as the US, where the pair will soon have their own television show.
A key to their success has been convincing 7,000 discerning drinkers to invest in the business, so that two years ago BrewDog raised £2.2m through crowdsourcing to build a new brewery.
The boys are at it again, looking to increase their output 1,000 per cent by raising a record-breaking £4m through their "Equity for Punks" scheme. They also want to set up a brewing academy in London and expand their bar chain overseas.
Mr Watt and Mr Dickie are looking to turn BrewDog into an empire, which would rather take away from the niche, craft-selling point of the business that their customers so love.
Also, for £95 a pop, the 42,105 shares sold will represent just 3.6 per cent of the business. That values BrewDog at more than £100m, well over 200 times BrewDog's profit in 2012.
Sure, cannier investors will factor in the company's recent growth – an annual average of 167 per cent over the past five years – and future expansion when they buy the shares. And Mr Watt insists that the brewery has been constrained by capacity issues that the fundraising will solve, meaning the multiple will soon be closer to the 20-25 times that the industry's biggest players enjoy.
Plus, the more hardened drinkers will find that the savings they get as a shareholder means that buying a case of beer a month should see the £95 recouped within a year.
But, as things stand, investors are being offered a minuscule percentage for a lot of money. This looks like the brewers are taking advantage of their worshipful following's emotional attachment to BrewDog.
Creating such a strong brand is obviously something that Mr Watt and Mr Dickie have every right to exploit. But "Equity for Punks", like the Tactical Nuclear Penguin, should come with a warning to consume with caution.
- 1 Five-year-old Iris Grace is raising awareness of autism through her extraordinary paintings
- 2 Expert urges cat lovers to own just one animal each
- 3 Sainsbury's '50p challenge' poster telling staff to encourage customers to spend more placed in shop window instead of staff room
- 4 Yes, the iPhone 6 is a miracle, but it's Apple's tax affairs that deserve a double take
- 5 Car tax disc changes: Two days to go - and they affect you much more than just not displaying a piece of paper
Sainsbury's '50p challenge' poster telling staff to encourage customers to spend more placed in shop window instead of staff room
Five-year-old Iris Grace is raising awareness of autism through her extraordinary paintings
Car tax disc changes: Two days to go - and they affect you much more than just not displaying a piece of paper
Isis an hour away from Baghdad - with no sign of Iraq army being able to make a successful counter-attack
British man raped while urinating in bushes at Oktoberfest beer festival in Germany
Isis, we are told, is a 'clear and dangerous threat to our way of life'. I’m sorry, but I just don’t buy it
Exclusive: 'Putin's Russia has been my biggest regret,' says Nato's outgoing Secretary General
The Osborne Ultimatum: Chancellor’s benefits freeze bombshell will affect ten million households
There’s no excuse for Dave Lee Travis’s behaviour, but we need to keep a sense of proportion
Should gay sex be illegal? 16% of Britons think so
Mark Reckless becomes second Tory MP to defect to Ukip in a month
- < Previous
- Next >
iJobs Money & Business
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...
NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...
£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...
Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...