BrewDog has secured another £20m loan from its private equity partner TSG amid stalling revenue growth.
As previously revealed by BrewDog in June, net revenues at the Scottish craft brewer in the year ended 31 December 2024 were flat at around £280m.
BrewDog returned to profit on an EBITDA basis, swinging from a loss of £2.5m in 2023 to a £7.5m gain last year. However, its pre-tax losses remained substantial at £36.6m, down from £59.2m the year prior.
That has prompted the brewer to return to minority shareholder TSG for further investment. Of the £20m borrowed, some £15m has already been drawn upon by the brewer.
The total cost of BrewDog’s borrowing, meanwhile, grew by 31% to £17.3m in the year ended 31 December 2024, its annual report showed.
TSG, which paid £213m for a 22% stake in BrewDog in 2017, also holds an 18% annual compounding interest coupon that has seen the value of its stake in the brewer grow to north of £800m.
Read more: BrewDog CEO James Taylor on why the brewer ‘doesn’t have an image problem’
In pre-prepared remarks, BrewDog CEO James Taylor sought to downplay the significance of its pre-tax losses and the slowdown in sales growth.
“There are no surprises in these numbers,” he told investors. “As you’ll recall, we updated you on last year’s performance at the beginning of the year, and back in June, we released our financial results which showed we had successfully returned to profitability with adjusted EBITDA of £7.5m (although the post-tax figure unfortunately did show a loss – but smaller than previous years).
“While our top-line revenue has slowed, it remains at historic highs, demonstrating the continued appeal of our brilliant beers, the power of our brand, and the strong appetite for quality beer.
“Meanwhile, our partnerships with Lord’s and the London Stadium are bearing fruit, showing the early success of our renewed distribution strategy of expanding profitable on-trade relationships that will serve us well in 2025 and beyond.
“Our focus now is on continuing to deliver sustainable, profitable growth, guided by our commitment to great-quality beer, the planet and, above all, our crew.”
Investors unconvinced
Investors, however, appear unconvinced. In one message posted on the brand’s ‘Equity For Punks’ forum and seen by The Grocer, one wrote that shareholders had been “utterly screwed over” by TSG’s investment in BrewDog.
“Please make a statement about how punks will ever see a return on their investment,” they wrote. “It’s the only thing I care about anymore.”
The £7.5m EBITDA reported in 2024 “did not even cover half of last year’s finance costs of £17m”, pointed out another.
“The £20m loan is an additional liability and revenue is declining. Costs will likely be on an upward curve again. This is a debt mountain I do not see being overcome,” they added.
In July, BrewDog announced it was to close 10 of its bars in the UK, citing “ongoing industry challenges”.
The following month, The Telegraph reported BrewDog had lost significant on-trade distribution, with almost 2,000 fewer outlets stocking its beers than in 2023.
Meanwhile, also in August, co-founder Martin Dickie announced his decision to step down, ending an 18-year association with BrewDog.
It means neither of BrewDog’s co-founders remain actively involved in the business, with James Watt having quit as CEO in May 2024.
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