BrewDog: yet another hip company using 'rebel' language to sell its stuff

[equationgirl]

I'm aware of that, and my link explains why. The are investing hence profits being down. Revenues are up which is a sign they're doing just fine.

Just because the revenues are up it doesn't mean they're doing fine at all.

And your post said that operating profits are up. They're not. Their operating losses are up - with some justifiable reasons sure, but the losses are significantly more than the profits ever were.

 

[Spymaster]

Some good sense being posted here by sealion .

 

[sealion]

Just because the revenues are up it doesn't mean they're doing fine at all.

Expand please, cause i pressume they'd be down if they weren't doing well.

And your post said that operating profits are up. They're not. Their operating losses are up

I may have got those mixed up but do you not see why they are down? They are spending money hence there losses being up, no? I know you don't like them but your argument is a bit daft. You can't argue that they are not making money and are down a bit due to covid and investing in new projects and premises. They have to be making millions to be able to invest ( or lose in your eyes) They ain't chucking it down the drain or opening pubs cause they're not making money/ profit. You make out they're a struggling business when that is far from the truth, unfortunately.

Again

BrewDog reports £24 million operating loss

Cost headwinds and significant investments hit the bottom line, although revenue grew by 13% last year

www.insider.co.uk

 

[Monkeygrinder's Organ]

Can't believe no one's had a shot at the 'accounting loss as a tax dodge' angle yet.

 

[equationgirl]

sealion I think you're not getting the difference between revenue and operating profit or operating loss.

There losses have massively increased compared to prepandemic profit. An operating loss could mean they're trying to spend their way out of trouble. Without looking at their financial reports in more detail, which I am not doing right now at this time on a Sunday , I remain unconvinced that this is solely due to one off events because this is the third year in a row they're reporting a loss. There's only so many one off events...

And as Monkeygrinder's Organ has just pointed out, this may be a way to minimise tax outlays by portraying the business as loss making on paper when in reality it's doing better.

Basically there's a lot of unanswered questions so continually stating things like 'increaded revenues so the business is doing well ' could be misleading.

 

[sealion]

I think you're not getting the difference between revenue and operating profit or operating loss.

I am. i understand it. Had a skim throught this thread and it seems that whatever they do they'll be criticised.

I remain unconvinced that this is solely due to one off events because this is the third year in a row they're reporting a loss.

You're correct it isn't a one off event like covid. They are launching a new line in spirits and have bought property and unless that money came from the fairy god mother it will affect ther profit and losses column. Nothing they do that boosts there business will convince you, that is quite clear.

Basically there's a lot of unanswered questions so continually stating things like 'increaded revenues so the business is doing well ' could be misleading.

I did say i don't drink but what i do notice when in a shop or supermarket is Brewdog- bloody everywhere. My Tesco local is bloody laden with the stuff, in the fridges where i get Mrs sealions wine from, on corners of aisle in boxes, it's all over the gaff. So i pressume they are very popular and selling lots of booze and doing very well.

If your business has increased revenue- more money from sales how could that be misleading or not doing well? I'd never heard of them a few years back now there stock is in nearly every shop that has a licence to selll alcohol. It used to be Bud, Heineken, Carling, Carlsberg etc that you'd see in the isles/ fridges now all i see beer wise is brewdog and the odd other hipster type brand. They are huge and seem to have come out of knowhere. I'm usually pretty oblivious to alcohol brands since i stopped drinking 18 years ago but i'm more than aware of brewdog and that isn't by choice or familiarity.

 

[equationgirl]

I am. i understand it. Had a skim throught this thread and it seems that whatever they do they'll be criticised.

You're correct it isn't a one off event like covid. They are launching a new line in spirits and have bought property and unless that money came from the fairy god mother it will affect ther profit and losses column. Nothing they do that boosts there business will convince you, that is quite clear.


I did say i don't drink but what i do notice when in a shop or supermarket is Brewdog- bloody everywhere. My Tesco local is bloody laden with the stuff, in the fridges where i get Mrs sealions wine from, on corners of aisle in boxes, it's all over the gaff. So i pressume they are very popular and selling lots of booze and doing very well.

If your business has increased revenue- more money from sales how could that be misleading or not doing well? I'd never heard of them a few years back now there stock is in nearly every shop that has a licence to selll alcohol. It used to be Bud, Heineken, Carling, Carlsberg etc that you'd see in the isles/ fridges now all i see beer wise is brewdog and the odd other hipster type brand. They are huge and seem to have come out of knowhere. I'm usually pretty oblivious to alcohol brands since i stopped drinking 18 years ago but i'm more than aware of brewdog and that isn't by choice or familiarity.

Because if revenues are up but losses have drastically widened then that suggests somewhere in the company that costs have escalated to point where they are potentially out of control.

I need to look at the latest accounts to get a better grip of what's going on but based on the latest revenues being £321m up 12% from the previous year then the previous revenues were £286m. Increase in revenue is £35m.However the losses were £16m, which indicates the business spent £51m, roughly 50% more than the increase in revenues.

It's generally not considered good business practice to spend more than you generate, especially as we could be going into a recession imminently.

It's not that everything they do warrants criticism but they don't do a lot of great things and indeed exhibit some spectacularly poor business practices (refusing to make reasonable adjustments for a disabled employee always springs to mind, not to mention the behaviours of James Watt towards the writer's of the open letter and the closing of bars at short notice)..

 

[xenon]

It's embedded in the institutional culture of urban75, to put down Scottish success stories. Both Scottish businesses and Scottish posters are given a much harder time on here than their English counterparts who are objectively worse.

Oh come on now you have rather overplayet this time.

 

[sealion]

However the losses were £16m, which indicates the business spent £51m, roughly 50% more than the increase in revenues.

It's generally not considered good business practice to spend more than you generate,

And what did they spend that money on?

 

[equationgirl]

And what did they spend that money on?

I have said twice I don't know until I get chance to look at their accounts. Which I am not doing right now.

 

[sealion]

I have said twice I don't know until I get chance to look at their accounts. Which I am not doi

You don't need to look at there acccounts. The link i shared tells you all you need to know. A hotel. some pubs, a new line in spirits, they've even expanded the work force. They wouldn't be doing if it was a failing concern. There loses were mainly down to covid.

 

[pbsmooth]

Because if revenues are up but losses have drastically widened then that suggests somewhere in the company that costs have escalated to point where they are potentially out of control.

It's generally not considered good business practice to spend more than you generate, especially as we could be going into a recession imminently.

That's quite old school running a small business in the 1970s advice. And not really accurate based on the link above.
Increasing revenues and potential for further growth is what investors tend to care about now.
Brewdog spent more in order to expand. So that's not the same as increasing average costs and not really "out of control".
He will probably look to flog it to private equity ghouls so showing growth while cutting loss making ventures I guess makes sense.

 

[Spymaster]

Some sound economics lessons being given on this thread now, and it's all down to Brewdog.

I trust equationgirl and one or two others will be voicing their gratitude for the free enlightenment.

 

[NoXion]

Yep, thread's still infested with dogshit trollcunts on a wind-up. Where the fuck are mods? The pillocks defending this gash company are no better than the MAGA morons trying to "trigger the libs".

 

[krtek a houby]

Yep, thread's still infested with dogshit trollcunts on a wind-up. Where the fuck are mods? The pillocks defending this gash company are no better than the MAGA morons trying to "trigger the libs".

Does feel a bit like that, sadly.

Nothing like publicity, eh.

 

[pbsmooth]

Yep, thread's still infested with dogshit trollcunts on a wind-up. Where the fuck are mods? The pillocks defending this gash company are no better than the MAGA morons trying to "trigger the libs".

I hope that wasn't aimed at me. I was just joining the discussion about the finances. The guy is a bellend and I have zero affinity to the brand - although Punk AF is one of the better AF beers - but the MAGA comparison seems a bit ridiculous. It's just beer.

 

[Spymaster]

I hope that wasn't aimed at me. I was just joining the discussion about the finances. The guy is a bellend and I have zero affinity to the brand - although Punk AF is one of the better AF beers - but the MAGA comparison seems a bit ridiculous. It's just beer.

No, Nox was probably referring to Krtek, which I actully think's a bit unfair

 

[krtek a houby]

No, Nox was probably referring to Krtek, which I actully think's a bit unfair

Over to you, NoXion

 

[equationgirl]

That's quite old school running a small business in the 1970s advice. And not really accurate based on the link above.
Increasing revenues and potential for further growth is what investors tend to care about now.
Brewdog spent more in order to expand. So that's not the same as increasing average costs and not really "out of control".
He will probably look to flog it to private equity ghouls so showing growth while cutting loss making ventures I guess makes sense.

growth can't be infinite though. Plus he already has private equity investors. Their model always has been 'growth at any costs' and that isn't sustainable for ever.

Have you read this article?

Equity for Chumps: BrewDog’s Crowdfunding Model a Dubious Deal for American Investors

I also dispute your categorisation of my post as 'old school 1970s advice' but hey, whatever.

 

[pbsmooth]

growth can't be infinite though. Plus he already has private equity investors. Their model always has been 'growth at any costs' and that isn't sustainable for ever.

Have you read this article?

Equity for Chumps: BrewDog’s Crowdfunding Model a Dubious Deal for American Investors

I also dispute your categorisation of my post as 'old school 1970s advice' but hey, whatever.

I certainly don't really agree with the growth growth growth thing but I am not the potential investor. just saying from my experience and understanding of how this shit works nowadays, this is what they will be looking for. losses in one quarter/year due to expansion aren't really an issue if the underlying business makes money - you're simply expanding the number of places/products that will ultimately make you money. (all very punk...)

 

[NoXion]

No, Nox was probably referring to Krtek, which I actully think's a bit unfair

No. You're the worst one on this thread. You're being a dick and you damn well know it.

 

[teuchter]

The pillocks defending this gash company are no better than the MAGA morons trying to "trigger the libs".

I'm glad to see the return of proper comedic hyperbole to the thread. It's been in decline since someone called Brewdog murderers, or something like that.

 

[NoXion]

I'm glad to see the return of proper comedic hyperbole to the thread. It's been in decline since someone called Brewdog murderers, or something like that.

The living punchline speaks. Your only knowledge of comedy is being the butt of the joke.

 

[Spymaster]

No. You're the worst one on this thread. You're being a dick and you damn well know it.

Calm down and stop being so silly.

Most normal people really don't think Brewdog is too bad as a company. That's all. The usual thoughtless folk on this thread jumped on a false bandwagon and got themselves all lathered-up, and now they're too invested to take a step back, a deep breath, and think cogently.

 

[krtek a houby]

Calm down and stop being so silly.

Most normal people really don't think Brewdog is too bad as a company. That's all. The usual thoughtless folk on this thread jumped on a false bandwagon and got themselves all lathered-up, and now they're too invested to take a step back, a deep breath, and think cogently.

Are you "normal people"?

You often make disparaging remarks about the community here, so was just wondering if there's somewhere else you'd rather be, than trolling us "lefties"?

Perhaps a more right leaning forum might be more suited for your outlook?

 

[Spymaster]

Are you "normal people"?

Of course.

 

[krtek a houby]

Of course.

Do you think urban is normal?

 

[teuchter]

than trolling us "lefties"?

Are you under the illusion that urban75 is a "lefty" forum?

 

[krtek a houby]

Are you under the illusion that urban75 is a "lefty" forum?

Start another thread if you disagree. Sure you'll get the attention you crave.

 

[equationgirl]

I looked at the latest accounts filed with Companies House for the parent company.

They're carrying a lot of debt Vs equity/capity (gearing ratio = 68%- up from 53% from the previous financial year). There's no absolutely 'bad' number because some industries have a higher gearing ratio than others, but this is on the higher side. So if I were a director I would be keeping an eye on that. A business with a high gearing ratio is susceptible to changes in the market like a recession.

There's a lot of bank loans being serviced, and financial liabilities due to property, which you would expect given there's a number of bars.

They've increased headcount by over 300 people which as they're opening new bars, is to be expected.

The gender ratio sucks, it's a heavily male dominated company at all levels but it's slightly better than a lot of engineering companies. There's definitely work to do to improve diversity but they're not alone in that.

The intangible assets are probably undervalued, they're relying heavily on goodwill alone instead of including the brands and know-how/trade secrets.

The cost of sales is over 50% of net revenues after duty is taken off. That's a lot.

Overall, given how much debt their carrying and the cost of sales being over 50% of rent revenues, I'd say there was definitely room to improvement.