BrewDog only started up in 2007, north o’ the border in Fraserburgh, as a small ground-breaking craft beer brewer. Their inspiration was to be everything that the global brewing behemoths weren’t.
And blow me, they’re making amazing progress.
I’ve heard of them over the last year or so, and may even have subliminally seen some of their beers on sale somewhere, but now I’ve actually invested in their latest Punk Equity round.
For a start, the current equity raising round of up to £25m is being crowdfunded, raised by themselves rather than through a generic crowdfunding platform. And certainly not via the traditional investment banking establishment. As a result their total costs will be only £200k, compared with a possible £1m+ if they were using the banking community. I love this way of leveraging the power of the interweb thingy.
But more importantly, from an investment appraisal perspective:
- they’re already profitable, with an operating profit of £3.9m and post-tax profit of £2.7m in 2014, with healthy gross & net margins
- the top line is growing strongly, from £18m in 2013 to £29.6m in 2014, with massive growth potential in this country and overseas
- the senior management team includes the founders, who are clearly passionate about the BrewDog philosophy, brand and product. They’re also heavily aligned with shareholders’ interests to succeed
- their beers – and increasing number of own-branded bars – sound very cool, popular and positioned to succeed where traditional pubs are failing (younger, hip nephews who have been to one of their bars agree)
- the prioritised list of what they’ll spend the newly raised funds on is exciting and compelling
- I love their energy and innovation. They feel like an early-days Virgin, or pre-corporate Ben & Jerry, genuinely wanting to stay true to their values but not afraid to chase aggressive growth. Although only time will tell, of course….
Take a look at their Prospectus. I love it. It’s persuaded me to buy 10 shares for a total investment of £475. Yes, it’s at an aggressive valuation of the business based on a heady multiple of current profitability but, what the hell, this is fun and I’m happy to just go along for the ride.
They may appear edgy and anti-establishment, but they also look very professionally managed. From their track record, from the Prospectus and within seconds of investing, I had access to my shareholder page, with great discounts on beers ordered online and in their bars, and a huge range of other mouth-watering fun benefits.
BrewDog are not quoted on any public exchange yet, but they have an annual internal market if you ever want to exit. And there’s always the chance of an IPO, or trade sale. I’m guessing that the founders will want to keep control for a while yet though.
I’d love to have got in on an earlier round and a lower valuation, but I can see these guys conquering the world with their great products, service, brand, innovation and management.
And even if they don’t, as a shareholder I’ll get a free beer every birthday.
And who else has the chutzpah to raise money via Equity for Punks?
As with any other equity investment, there are clearly risks involved. These are listed succinctly in the Prospectus. The minimum investment in Equity for Punks IV is 2 shares @ £47.50 = £95.