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BrewDog's IPO

How to trade BrewDog's IPO

The BrewDog IPO is one of the UK’s most eagerly anticipated upcoming IPOs, following the brewer’s successful Equity for Punks Tomorrow crowdfunding campaign that, at the time of writing, has raised close to four times its initial £7.5m target. In this article, we break down BrewDog’s IPO prospectus ahead of its upcoming listing.

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FCA regulated
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Segregated funds
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LSE listed

Late 2021

BrewDog IPO date

$2bn+

BrewDog valuation

£25+

BrewDog's potential share price

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When is BrewDog’s IPO date?

The exact date of the BrewDog IPO is unknown at the time of writing. BrewDog hopes the IPO will take place in 2021, although this may be affected by the ongoing coronavirus pandemic.

The ticker is also yet to be announced, but the company plans to list on the London Stock Exchange.

What will BrewDog’s share price be?

Again, there isn’t a known range for BrewDog’s share price at IPO as yet. As of March 2021, shares cost £25.15 each through the Equity for Punks Tomorrow scheme, with a two-share minimum investment.

What is BrewDog’s valuation?

BrewDog’s most recent valuation, in early 2020, estimated that the company was worth around $2bn, as reported by Forbes. Founders James Watt and Martin Dickie reportedly own 44% of the company between them: 24% and 20%, respectively. Their combined stakes are estimated to total around $880m in value.

This could give BrewDog a market capitalisation of more than four times that of Fuller, Smith and Turner, which has a market cap of £326m as of July 2021. In its most recent annual report, Fuller, Smith and Turner reported revenue down 77.04% to £73.4m and an adjusted pre-tax loss of £48.7m. BrewDog reported an adjusted pre-tax loss of £13.13m for 2020 and a net loss of £13.25m.

Breweries had a tough time in 2020 due to the coronavirus pandemic and local restrictions affecting footfall. In 2019, Fuller, Smith and Turner reported net profits of £160.9m, while BrewDog’s equivalent figure was £1.05m.

How to trade on BrewDog's IPO

1. Register for an account

We offer 9,000+ tradable shares, which will include BrewDog’s new listing.

2. Choose whether you want to go long (buy) or go short (sell)

Note that some trading restrictions may apply on initial trading.

3. Follow market news

BrewDog is a trending company and there are many aspects of the IPO to consider, including regulations, business stance and stakeholders.

4. Consider risk-management tools

Share prices can rise and drop suddenly on their stock market debut, so it may be worth adding stop-loss or take-profit orders to any open positions in order to prevent capital loss.

How has BrewDog performed financially pre-IPO?

Despite net losses, BrewDog made revenue of £238m in 2020, roughly 10% more than the company achieved in 2019.

Without available information on the number of shares to be issued and their pricing, it’s impossible to calculate its P/E ratio, but assuming a £2bn market value at £25.15 per share, outstanding shares could total 80 million.

BrewDog made a net loss in 2020, but taking its 2019 net profit of £1.05m, this would imply earnings per share (EPS) of 1.31p and a P/E ratio of 1,904.76. In comparison, Fuller, Smith and Turner’s PE ratio is 144.57. Please remember that past performance isn’t indicative of future results.

Why might investors be interested in BrewDog’s upcoming IPO?

According to BrewDog’s Equity for Punks prospectus, some of the key reasons investors may want to go long on BrewDog are its business growth, the discounts on offer to its shareholders, invitations to its notorious ‘Annual General Mayhem’ and having their own tree planted in the BrewDog forest.

Five BrewDog products are listed in the best-selling craft beer brands to July 2020, with Punk IPA the top seller at £59.9m. BrewDog shareholders also get a lifetime discount of 5% in the company’s bars and online. Those who buy 20 shares or more see this discount boosted to 10%.

BrewDog’s ‘Annual General Mayhem’ is a beer festival which, in 2019, attracted thousands of attendees and performances from bands including Idlewild and The XCERTS.

BrewDog has pledged to plant 1 million trees by 2022 at the BrewDog Forest in the Scottish Highlands as part of its drive to becoming a carbon-negative company. Those who buy shares will have their own tree in this forest dedicated to them.

Investing larger amounts qualifies BrewDog’s shareholders for other rewards, such as a monthly case of 24 cans of BrewDog beer or a cask of sustainable whisky.

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What are the potential risks for BrewDog?

The impact of the coronavirus pandemic was significant for BrewDog, as well as for most of the alcoholic beverage industry. Slow recoveries or further lockdowns could impact BrewDog’s sales, particularly those originating in its bars.

Many shareholders are also concerned about recent reports of a toxic culture inside BrewDog. According to the BBC, staff accused the firm of misogyny and pursuit of growth at all costs, while a group of former staff calling themselves ‘punks with purpose’ accused the company of hypocrisy over its environmental branding thanks to the use of chartered transatlantic flights. In response to the accusations, BrewDog appointed Blythe Jack, managing director at private equity firm and BrewDog backer TSG Consumer Partners, to chair its board.

Many current shareholders are additionally concerned about the terms of TSG’s involvement with BrewDog. According to the Financial Times, it is guaranteed an 18% compounding annual return on its 22% holding in the event of an IPO, with priority given to this agreement over other shareholders. This means that newer investors could lose money even in the event that BrewDog’s value increases. Myrto Lalacos, investment executive at Praetura Ventures, was quoted in the Financial Times as saying that crowdfunding investors would only recoup their investment if the company sold for £2bn or more in 2024.

Who is BrewDog’s competition?

In terms of craft beer sales, BrewDog’s main competitors, according to its prospectus, are Goose Island, Innis & Gunn, Beavertown and Camden Town Brewery. The latter of these joined Goose Island in the Anheuser-Busch InBev [ABI] family in late 2020, when the multinational brewery bought the remaining 68.8% stake it didn’t own already for $220m.

Globally speaking, ABI had a 29.3% market share of beer sales by volume in 2019, according to Statista, making it the world’s largest beer seller. It was followed by Heineken with 12.6%, China Resources Snow Breweries with 6%, and Carlsberg with 5.9%.

According to Statista, BrewDog dominated craft beer sales in the UK in 2019 with 86.2% of the market. Its next competitors were Camden Town Brewery with 11%, Innis & Gunn with 9.7%, Brooklyn with 5.9% and Goose Island with 5.5%. Vocation came sixth on the list with 5.4% of sales, while Beavertown came in seventh with 4.9%.

FAQS

How can I buy BrewDog shares pre-IPO?

In September 2020, BrewDog began the most recent and final iteration of its Equity for Punks crowdfunding campaign, Equity for Punks Tomorrow. The first of these rounds was launched in 2009 and raised £750,000 in five months. At the time of writing, Equity for Punks Tomorrow has raised almost £27.6m by selling shares at around £25 each.

Where can I trade BrewDog’s IPO?

Following BrewDog’s IPO, the stock will be listed on our Next Generation trading platform under Products > Shares > UK. Alternatively, you can search for ‘BrewDog’ in the Product Library. Open an account to get started.

What’s the lock-up period on BrewDog’s IPO?

It’s not yet clear whether there will be a lock-up period on BrewDog’s IPO as the company could do a direct listing, which has no lock-up period. The end of a lock-up period can be a volatile time for share prices, especially if insiders know something that incentivises them to sell shares altogether, so read our risk-management guide to learn how to combat this risk.

What other breweries can I trade before BrewDog’s IPO?

Some of the largest publicly listed breweries are: Anheuser-Busch InBev [ABI], which owns Bud Light and Budweiser as well as craft beer brands such as Camden Town Brewery and Goose Island; Heineken [HEIA] which, as well as its eponymous flagship brand, owns Amstel, Sol and Tiger; China Resources Beer [0291HK]; and Carlsberg [CABGY].

Who are currently the largest BrewDog shareholders?

Co-founders James Watt and Martin Dickie own 44% of BrewDog between them, split 24% and 20%, respectively. Equity Capital firm TSG Consumer Partners owns a 22% stake in the company. It is unclear how much of the rest of BrewDog’s stock is owned by investors via its Equity for Punks programmes.

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