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If turnover is 6.5 and valuation is 26 well you can see the ratio there
It's healthy , but a mid term investment , not a short term one .

I see it as sound enough , if you have a few pound spare to park for a while .

Their valuation seems quite excessive, and I'd certainly not advise anyone to buy shares at that price as an "investment". But it could be a fun gamble and something to talk about when you're enjoying a bottle next time.

Are they even profitable yet?

If memory serves me right I think the brewery that brewed "Behans no. 1" in newbridge had a scheme like this going. If you bought some beer you could get a share <!-- s:?: --><img src="{SMILIES_PATH}/icon_question.gif" alt=":" title="Question" /><!-- s:?: --> . Might be an idea for a new brewery setting up.

The poster who said that this is highly speculative is absolutely right.

First, the financial information in the prospectus says that the company made a pre-tax profit of £222k in 2010, versus a valuation of £27m - which is a price earnings ratio[/url:2terv4ac] of 121. By way of comparison the P/E for ABInbev is 19, Diageo is 15, Fullers is 16, and for Greene King its 8. In fact the P/E ratio is in dot com territory.

Second, the other companies mention are listed companies whereas the Brewdog prospectus specifically states that the company has no intention of listing. Generally, the P/E ratio for private companies is lower than for public companies because they are harder to sell, even in cases where management doesn't own 92% of the company.

Realistically, the only way I can see an investor in this getting any of their money back is if the whole company was sold. In that context I think that its worth considering that ABInvBev paid $39m (£24m) for Goose Island back in March.

So, I wish Brewdog all the best and I will continue to support them by drinking their beers, but I won't be subscribing for these shares and I wouldn't encourage anyone else who would like to see their money again to do so either.

&amp;quot;mr happy&amp;quot;:20m0myzi wrote: The poster who said that this is highly speculative is absolutely right.

First, the financial information in the prospectus says that the company made a pre-tax profit of £222k in 2010, versus a valuation of £27m - which is a price earnings ratio[/url:20m0myzi] of 121. By way of comparison the P/E for ABInbev is 19, Diageo is 15, Fullers is 16, and for Greene King its 8. In fact the P/E ratio is in dot com territory.[/quote:20m0myzi]

The multinationals you mention are low growth, BD is high growth, hence the ratios. In fact Inbev stated that they acquired goose island specifically because craft beer is a high growth, high margin sector (at least in the hands of a multinational) while traditional mass market beer volumes are declining.

[quote:248sp7dj]The multinationals you mention are low growth, BD is high growth, hence the ratios. In fact Inbev stated that they acquired goose island specifically because craft beer is a high growth, high margin sector (at least in the hands of a multinational) while traditional mass market beer volumes are declining.[/quote:248sp7dj]

Inbev talked about craft beer growing at 11% a year - so based on current profit levels Brewdog would need to sustain this growth rate over 47 years to match their valuation of the company. So there is a lot of hope value associated with this share issue which may or may not be realised - which basically makes it very risky.

Incidentally, Brewdog's last set of accounts was qualified because their auditors thought their £1.7m valuation of their interest in Griffin brewers was £1.2m too high which wouldn't inspire a lot of confidence in their ability to value their business.

Even if the P/E wasn't astronomical this is an offer to buy into a very small and illiquid minority interest. There is no obvious way of getting your money back unless the company is sold because there is no stock market listing, and an explicit statement that there is no plan to obtain one. There is also no reason why the company would ever pay a dividend because management who own the vast majority of the equity can extract profits through salaries and fees.

If you want to give money to Brewdog because you are a fan - fine go for it, but if you want to make an investment the lack of an exit strategy would bother me a lot.