BrewDog secures £25m CBILS boost
Providing an update on its financial position alongside the release of its accounts for the year ending 31 December 2019, BrewDog stated it does not expect “any impairments” due to available headroom and is optimistic about the remainder of 2020 in light of financial measures taken.
In addition to a £25m CBILS loan repayable over three years, the Ellon-based operator of more than 100 bars entered an invoice financing arrangement stating that it can obtain prepayment of up to 90% of outstanding accounts receivable in the UK up to a facility limit of £20m at the onset of the crisis.
BrewDog also raised £3.3m through the issue of a bond on 22 January 2020 and converted a £5m repayable on demand loan into a structures term loan, repayable in instalments over 10 years.
“Management have performed stress testing of cashflow forecasts to take account of the potential impacts of Covid-19, including adjustments to capacity and expansion plans, and are satisfied in the most severe, yet plausible, ‘downside’ scenario, including the potential for a second pandemic wave that would impact the group for a longer period including into 2021, that the group has access to sufficient liquidity through the going concern period,” BrewDog’s financial statement explained.
“As such, the directors have a reasonable expectation that the company and the group have adequate resources to continue in operational existence for the foreseeable future.”
BrewDog co-founder James Watt previously told The Morning Advertiser (MA) the nationwide lockdown in spring and early summer saw the brewer and bar operator lose 70% of its revenue overnight, and that it was “50/50” whether the company would survive Covid-19.
Weathering the storm
Discussing BrewDog’s finances, Watt explained: “2020 has been challenging all round so far with Covid-19 having a big impact on businesses all over the planet.
“Despite the difficulties, we have managed to weather the storm better than expected with very strong grocery sales and very strong online sales compensating for the temporary closures of our bars and the closure of our on-premises wholesale channel.”
For the year ending 31 December 2019, sales in BrewDog’s UK bar division rose to £47.1m from £34.9m in 2018.
What’s more, pre-tax profits stood at £1.1m, up from a loss of £576,000 in 2018, while turnover increased from £171.6m to £214.9m.
BrewDog also lost £8m in the first half of 2020 with revenue down in the region of £20m against budget.
The financial update follows the appointment of Niall McCallum as its chief financial officer.
As reported by The MA, BrewDog recently announced that it had hit an initial crowdfunding target of £7.5m for its Equity for Punks Tomorrow scheme, which launched in September – raising £1m in less than 48 hours.
What’s more, it’s understood the operator is currently working on UK openings in Plymouth, Exeter, Manchester, Chelmsford, Basingstoke, Bath, Ealing, Headingley, Huddersfield, Bradford, Lincoln and Belfast.
