Brewdog’s ambitious projected profits


Date: 26.02.2018

Scottish craft brewery Brewdog made an unusual announcement this week: It said it would give away 20 per cent of its profits every year from now on until forever. Half of that would go to staff and the other half would go to charities selected by Brewdog’s investors and employees.

The company’s founders James Watt and Martin Dickie also said they would reinvest the remainder of their profits into the business “for at least the next 7 years”. So that’s healthy bonuses for staff, a good dose of corporate philanthropy, and a long wait for any dividends, which is not what you would expect from a business part-owned by a private equity firm.

But Watt and Dickie seem serious and they reckon if Brewdog hits its targets, it will give away more than £45m over the next five years, which is where things get interesting.


Brewdog is one of the UK’s most successful startups in recent years. It has mostly avoided traditional investors in favour of crowdfunding, and made £72m in revenue last year along with £3.4m in post-tax profits. Earlier this year, it sold a 22 per cent stake to TSG Consumer Partners in a deal that valued Brewdog at £1bn.

In short, it’s doing pretty well. But even so, Brewdog would have to generate £225m of profits by 2022 in order to reach its goal of giving away £45m.

Let’s see how much of a tall order that is.

According to a company spokesperson, the “profits” referenced in its announcement are pre-tax profits, which, as an aside, would make the giveaway tax deductible.

Last year, Brewdog made £3.8m in pre-tax profits, so Watt and Dickie would need to basically double it for the next five years to generate £225m in total over that period.

Nothing is impossible, obviously, but let’s look at how BrewDog has done historically.

From 2011 to 2016, its average yearly pre-tax profit growth rate has been a little over 90 per cent, which is good going, but not quite good enough for the £45m target.

And that average is being boosted by one particularly good year of growth. In 2013, pre-tax profits jumped around 390 per cent as Brewdog went from making £485,000 before tax to £2.4m. If we look at things since then, we find that average profit growth has been ticking along at a more sober 20 per cent, partly because of investment spend.

If Brewdog can shift growth higher and does hit its targets, the company would be generating £115m before tax in 2021. But that’s a big “if”.

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