West Berkshire Brewery: the full story
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I've just spent a day at West Berkshire Brewery with David Bruce, the Chairman. I had a tour of the current and new brewery, the bottling, kegging and canning plant and the soon to be opened 200-capacity visitor centre.
We've been featuring this investment opportunity for some time – indeed clients have already invested £1.2 million of the £2 million West Berkshire Brewery is raising.
But I've now realised I owe you an apology.
So far I’ve been talking about this opportunity as an asset-rich EIS investment.
But it's now occurred to me I’ve been telling you only part of the story.
Yes, the company owns some valuable assets. It doesn’t own the land, but the brewing and packaging equipment all have a significant value of well over £4 million.
Yet, the minute I set foot in the brewery and started talking to David Bruce, I forgot about that.
What immediately struck me is that this is a proper, decent business, run by people who really know what they’re doing and have big ideas.
David’s enthusiasm is infectious. His plans are ambitious. But as I walked around with him I could just see how they could become reality and potentially generate returns for experienced investors, although like all EIS this investment is high risk. Incidentally, David already owns nearly £1 million of equity in the company. He likes to "put his money where his mouth is".
There is the brewing side of the business, which is already successful – West Berkshire’s craft ales have bagged over 40 awards since 1995, adding seven to the trophy cabinet this year.
West Berkshire Brewery already owns one pub, The Depot in Islington, and plans to open a total of 10 within the next five years.
In addition, there are new bottling, kegging and canning facilities, which allow West Berkshire Brewery to package both its own and third parties’ beers when there’s spare capacity. This outsourced packaging business alone could generate £1.3 million of new revenue in the first year alone.
An impressive 200-capacity visitor centre is about to open, running brewery tours and with an inviting café and shop.
All near the River Thames, in a Wind in the Willows setting.
I can just imagine West Berkshire Brewery becoming a family day out destination. Incidentally, David already knows about this sort of thing as he also owns several successful farm shops and an award-winning vineyard.
This is a relatively new concept in the UK, but already proven in the US, where David Bruce has worked in the past.
And if anyone can turn that vision into reality, in my opinion, that is David Bruce and his team. You should, however, form your own view.
I’ve tried to capture some of that – these are some of the photos I took.
Watch an exclusive video interview with David Bruce:
A seasoned entrepreneur in the brewing industry
David started in the industry in 1966.
In 1979 he borrowed £10,000 against his house and opened his first Firkin brewpub, Bruce's Brewery at The Goose and Firkin, in South London. Nine years later he had 12 pubs, which he sold for £6.6 million cash just before his fortieth birthday.
In the mid ‘90s, as a director of Grosvenor Inns PLC, he was responsible for the national expansion of the Slug & Lettuce chain from seven to 35 sites.
His next venture was The Capital Pub Company PLC, which he co-founded with Clive Watson (now a Non-Executive Director at West Berkshire Brewery). The Capital Pub Company PLC raised over £15million under the EIS and was admitted to AIM in June 2007. It was acquired by Greene King for £93 million in July 2011.
In October 2011, again with Clive Watson, David co-founded The City Pub Company (East) PLC and The City Pub Company (West) PLC, raising £28 million in EIS funds. The fundraise was so successful they had to turn potential investors’ money away. The two companies are now hoping to merge and float on AIM next month.
Internationally, David was a founding investor in The Paris Real Ale Brewery; The Brooklyn Brewery in New York City; The Phantom Canyon Brewery and The Wynkoop Brewery in Colorado; and The Elysian Brewery in Seattle, which was sold two years ago to A-B InBev for £35 million.
West Berkshire Brewery is David Bruce’s latest project.
It was opened in 1995 by a local couple of beer enthusiasts in a shed at the back of a pub. In March 2013 David Bruce, who lives in the area and enjoyed the beers, took a stake in the company and worked with the founders until they retired.
Since then sales have increased from £1.2 million in the 2013 financial year to £2.6 million in the 2017 financial year with a gross margin of 40%. Now West Berkshire Brewery has ambitious plans to grow sales to £8.7 million over four years. The mid-point target return for investors, not guaranteed, is 3x after tax relief.
Few entrepreneurs can match David Bruce’s experience and repeated successes, although past performance is not a guide to the future. Remember, capital is at risk.
West Berkshire Brewery EIS
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