Loch Lomond Brewery are crowdfunding. If you want to find some more information on what this means in general and what it means for us - then we have prepared some answers to the frequently asked questions.

 

We hope this will help you make a more informed choice but if you do need more information then contact us here at investment@lochlomondbrewery.com. Capital at Risk.

1. Essentials

 

What is crowdfunding?

We are raising investment to expand. We will use the funds that we raise to double our production, invest in our team and our brewery, and open our first taproom on the banks of Loch Lomond.

Loch Lomond Brewery is listed on Crowdcube and currently open to investment.  Our campaign page is at here

By investing in us you will become part of the Loch Lomond Brewery family and will own shares in our company as well as have access to great rewards.

Why are you crowdfunding?

We want to build a community of Loch Lomond Brewery investors and give our customers the opportunity to share in our future success.

 

Do I get shares in the company?

Yes, every investor will receive shares in Loch Lomond Brewery Ltd.  The number of shares you receive will be proportionate to the amount that you invest.  The final number of shares issued will be dependent upon the final number of investors and amount of money raised. Our initial fundraising target is £350,000, equivalent to 10.36% of the company.

Are there rewards?

Yes, as well as shares in our company, every investor is also entitled to a range of rewards, depending upon the amount of money invested.  Rewards include discounts in our brewery tap and online, invitations to parties and special events, free brewery tours and tastings, and more.  See our Crowdcube page for full details.

When will your crowdfunding campaign go live?

We are now live, please see our Crowdcube page to see updates on our campaign.

How long will the campaign last for?

The campaign will last for up to 30 days, or whenever we reach or target. If we hit our target of £350,000 sooner than 30 days, then we are likely to choose to ‘overfund’, meaning that people can continue to invest.  This will have no impact on the people that have already invested, it just means that we would make a larger % of the company available for sale.

What will you do with the money?

We want to double our production capacity over the next year by investing in new state of the art equipment.

Please see the business plan available on our Crowdcube page for more details. This will also include investing in our team, in extending national distribution and expanding our export business and continue to invest in quality improvements to make the best tasting beers possible.

We will also use the investment to open our first destination brewery, taproom and visitor centre on the banks of Loch Lomond.

 

Overfunding – what will you do with the additional investment?

Overfunding will simply allow us to reach our growth targets faster as well as invest more money in our taproom and visitor centre.

2. Investment & Shares

 

What happens if you raise more than your target?

If we are fortunate to raise more than our target of £350,000 then we will be able to use this investment to grow the company even more quickly than we currently plan to.  If we raise investment above the target level, this simply means that we will have more shareholders and be ‘giving away’ a larger % of our company, it will not mean that the initial crowdfunding investors are affected in any way.

When will the payment for my investment be taken?

Initially, your investment in our campaign will be recorded as a pledge, and no funds will be taken at this stage.  Following the successful completion of the campaign, Crowdcube will contact you to confirm the date that the funds will be deducted from your bank account, with a minimum of seven days notice, and allowing you a final opportunity to opt out of the investment.

When will I receive my shares?

Crowdcube will issue shares following the successful completion of the campaign, and after your investment has been processed.  The completion of the round and the paperwork takes a few weeks to draw up, but typically you can expect to receive your Share Certificate and shareholders discount and rewards around 4 weeks after the campaign has ended.

Are there tax advantages?

 

We qualify for the EIS scheme.  Eligible investors may be entitled to up to 30% of the value of your investment discounted from your income tax bill, as well as other tax reliefs. For further details please see –https://www.crowdcube.com/pg/eis-seis-tax-relief-overview-43.

What’s the difference between A shares and B shares?

There are ‘A’ shares and ‘B’ shares available in the company. Both types of share are equal in all ways regarding the right to share in dividends and capital distributions. Investors who invest at £5,000 and above will be entitled to ‘A’ ordinary shares which also have voting rights and certain pre-emption rights (a pre-emption right is a first option or first refusal on buying any future shares that are offered in the company). ‘B’ ordinary shares for investors below this level retain all rights to dividends, but no voting and pre-emption rights.  

Can the shares I buy in Loch Lomond Brewery be traded / can I sell my shares at a later date?

We are a private limited company, and in common with all such companies, at present there is no public forum for buying and selling shares in the company.  Shares may be bought and sold by private arrangement, with slightly different conditions if you are an A or B shareholder – if a holder of A Ordinary Shares wants to transfer their shares, they must first offer them to the other holders of A Ordinary Shares. B Investment Shares are freely transferable which means a holder of B Investment Shares may transfer his or her shares without first complying with the pre-emption procedure, as long as that holder wishes transfer all of their shares to a single third party.

 

Are you likely to have a future share buyback scheme?

This is a possibility, and it is a circumstance in which you could sell your shares.

Can all shareholders attend the AGM?

All ‘A’ shareholders will be entitled to attend and vote at the AGM (Annual General Meeting).

3. Rewards

What rewards are available to me as an investor?

There are a range of rewards available to all investors, starting from investments of £50 and up. The rewards vary according to level of investment, and include lifetime discounts, investor pin badges, early bird access to new beer releases and special events, discounts in our new taproom, brewery tours, shareholder parties, and more. Please see our Crowdcube campaign page for full details.

 

When will I get my shareholder discount?

We aim to issue you with a shareholder discount card and any other rewards around 4 weeks after the end of the campaign.

4. The Loch Lomond Brewery Visitor Attraction & Taproom

What are your plans for the new brewery and taproom?

We are in detailed planning stages with developers to open our very first brewery come tap room on the shores of Loch Lomond by 2020.

 

The footprint of the building will be 1200m2 with a ⅓ of that space dedicated to a restaurant, visitor centre and store. We want this to become a key attraction to the Loch’s 4 million annual visitors.

 

It has been clear over the years of being unable to offer a visitor attraction that there is great demand for one. Visit Scotland, TBAS and Scotland Food and Drink are working tirelessly in developing a visitor guide highlighting tourist attractions to include distillery and brewery tours.

 

When will the new brewery and taproom open?

An application for planning permission has been submitted to the Loch Lomond and Trossachs National Park (LLTNP) for a site next to the current Loch Lomond Shores development in Balloch. We hope to complete the deal and move forward with the first stage with developers by 2019. Our aim is to open by Summer 2020.

 

Summer 2020 is 2 years away why are you raising money for it now?

We know that large scale projects like this take time and we want to make sure we get it just right. The bulk of this investment will be spent on increasing our production capacity and investing in our team. We envisage that the significant growth in sales as a result of this investment will enable us to largely self-finance the build of the new brewery and taproom. Of course, if we overfund, we’ll invest this money straight into the taproom and brewery and grow even faster.

5. Valuation and Return On Investment

Do you have a financial pack?

Yes we have a business plan available for download on our Crowdcube campaign page with a financial overview included.  If, after reading it, you have any further questions then please do not hesitate to contact us on the details supplied in the pack, and we will be happy to answer any questions or supply additional information.

How did you arrive at your valuation?

We debated and reviewed our valuation with our team and advisors and benchmarked ourselves against other breweries that have either sold up/been bought, or who have also run successful crowdfunding campaigns.  

The last five years has seen a significant growth in investment in the craft brewing market with many businesses successfully funding and exiting on strong valuations.

The chart shown on page 17 of our investment documents available on Crowdcube highlights some recent valuations in the industry. Based on this, along with analysis of our forecasted growth we believe a £3,029,730 pre-money valuation (6.0x our revenue last year) is fair.

Comparable industry exits include the acquisition of Camden Town by AB InBev for £85mn after a successful Crowdcube raise in 2015.

                

We’re proud to run a family business and we’re focused on the long-term, sustainable growth rather than a quick exit. As a result we would look to pay a dividend of 50% of EBITDA from 2022.

 

How will I make a return on my investment?

This is a long term investment in the relatively early stages of a fast growing company.  We anticipate that the value of your investment will increase over time, giving you capital growth. The main way that an investor can make money from your investment is by selling your share for more than you paid for it.

We are a private limited company, and our shares are therefore not publicly traded at present.  In the event of a future sale of the company you would be able to sell your shares at that stage to the acquiring company. Alternatively, if the business grows to a point where the company management offer to buy back equity from investors, you are also likely to be able to sell your shares.  

You will be entitled to a share in the payment of dividends (please see the next question).  

Please also note that, depending upon your personal circumstances, there are likely to be tax advantages to this investment (see the questions on EIS above). There are also a range of rewards available to all investors.

 

What are your plans regarding payment of dividends in future?

This is a long term investment in the early stages of a rapidly growing company. We have ambitious plans for the future that will require ongoing investment, including in new capacity and premises in the future. It is therefore likely that in the first few years, i.e. the 4 years that up until the end of the financial forecasts in our business plan, that all profits will be reinvested in growing the company.

 

It is certainly our longer term ambition to pay a dividend to all shareholders, at a ratio of 50% reinvested in the company and 50% paid as dividends, so that all shareholders make a return on investment through dividends as well as through capital growth in the value of their shares, along with the ancillary benefits of being a shareholder.

 

What is your exit strategy?

We are committed to the long term success and growth of Loch Lomond Brewery as a successful independent company. We believe that our efforts are best aimed at, and shareholder interests best supported by, focusing all of our efforts on hitting our growth targets and achieving our business plan.

We’re proud to run a family business and we’re focused on the long-term, sustainable growth rather than a quick exit. As a result we would look to pay a dividend of 50% of EBITDA from 2022.

At the same time, we are realistic about the possibility that we might at some future point be approached with takeover enquiries. We would take any approach seriously, and judge it on its own merits, before taking anything to the shareholders. In Page 17 of our Investor documents available on Crowdcube we discuss the types of merger and acquisitions activity that has been taking place in our sector, along with valuations.

 

6. Growth

How do you plan to meet your targets for growth?

Our business has continued to grow steadily since 2011, through a combination of great beer, adding to our product range, export, and investing in our team. We are now at a point where soon our demand will exceed our ability to supply. We have highlighted in more detail in our business plan, available from our Crowdcube campaign page, our plans and opportunities for growth. These include the opening our first taproom, expanding export, rolling out fully across the UK, investing in our team and in business development, and developing and expanding our product range.

 

How has the company funded growth to date?

Growth has been financed to date by loans from directors and the bank.  Current director loans stand at £49K. Our bank loan stands at £50K.

It is a requirement of the EIS scheme that all funds raised are used for investment in and growth of the business.  We can therefore confirm that none of the investment funds raised will be used to repay director or bank loans.

Disclaimer – Investments of this nature carry risks to your capital as well as potential rewards.

7. Retail v Production

What is the split between the brewery tap and general beer sales?

The breakdown of Beer Sales versus Retail is as follows

© 2020 by Loch Lomond Brewery Ltd - Block 2 Unit 11 - Vale of Leven Industrial Estate - Dumbarton - G82 3PD

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