As we close out the finances for what was an extraordinary year for the entire planet, I thought it worthwhile to provide you, our investors, an update on 2020.
Having written to you in November, you have a detailed understanding of the ebbs and flows of last year, so I will get directly to the numbers. This is based on draft management accounts, and there are a few areas that need to be finalised, bad debts being one of them.
Starting with Turnover, we actually improved on 2019, with a final figure of £5.3m, an increase of 8%. Our Gross Margin has reduced, however this is mainly due to stock that has been written off. Our increase in cash sales (Web and Tap Yard) has been offset by a larger volume to low margin subscription partners and a higher volume to supermarkets.
Overheads have also decreased substantially due to furlough, and general costs such as sales expenses not being incurred this year. This means we have ended the year with an EBITDA of around £400K.
I hope you will agree this is very positive news. Considering where we were in March, the fact we are still here and still fighting the good cause is testament to the hard work of every single person at Siren. The team has been putting in hard shifts across the board, whether it is in production, marketing, accounts or working from home in sales.
Of course, we won’t be slowing down. We have been continuing the drive to improve our efficiency, and have literally just commissioned our new automatic CIP system; this hasn’t been an easy project but it is one that will pay big dividends. Our water treatment plant installation has been delayed but we hope to have that running by the beginning of March.
We have also commissioned two more 250HL tanks which will help give us the ability to manage flagship growth while enabling us to keep up with the pace of limited editions.
Our malt silo is on order and this is due in March. This again will aid our efficiency (and spirits) as instead of our brewers opening 65 bags of malt for every brew, the base malt will be delivered automatically by conveyor. Over time, it also represents a small saving in the price of the malt working this way.
To support our attempted growth for 2021, if not definite growth in 2022, we have added experience to our team. Richard joins as our Finance Director, and Hannah will shortly join our marketing team to look after all things e-commerce related. We’re looking forward to developing our approach in both of these areas and the depth of experience in the team will prove valuable.
This year has started much slower than we had hoped with the trade side of the business being a real struggle. However once again the web shop has kept us moving. Initiatives such as the fun and silly “sadvent” calendars have proved to be a hit, adding some much needed revenue, and entertainment, at a very tough time of year. We're continuing to update them and are now shipping from stock, so please keep them in mind for loved ones as lockdown continues.
We are trying to balance shutting down as much as is necessary versus trying to keep enough interesting new products coming through, and I hope you see the balance is there.
Now whilst it is difficult to plan for this year without any real clarity on how it is going to play out, there are a number of projects apart from the ones I have already outlined that I can tell you about.
Firstly, we have plans for our anniversary release which obviously includes Maiden, but we have some other exciting things to tickle your interest along with potentially an exciting virtual beer festival day we are planning for March. One that you already may have seen developing is the crowdsourced beer. We’re aware now more than ever of how important our customers and community are to us and it seems like a great opportunity to show that. Everyone who got involved will have their names featured on the label.
In other good news, Project Barista will return this year. We’re also well on our way to having a solid Barrel Release plan for the year. I hope you will have noticed that Steve has been able to spend more time on this area recently, and we have had a fantastic set of releases from our collaboration with Wiper & True "We Are Stardust" to our release of the Fairground trilogy in December and "Many Moons" just last week. If we can keep to 4-5 releases per quarter at the quality you have come to expect, we will be very happy.
As for the rest of 2021, we have plenty of ideas we are working on, including constantly looking at what and how we can improve. Whether it’s communication, process, quality or consistency of our beer, rest assured we have plenty of projects on the go to keep developing all our capabilities.
We cannot wait for our friends and partners in the on-trade to come back, as I am sure you all feel the same. The opportunity to do something meaningful rather than a walk around your neighbourhood will be a refreshing change for sure.
One key area for us that we are contemplating is our future, what that looks like and where that may be. We have the option of building a purpose built brewery on our industrial estate as part of all the residential growth going on around us, which we are exploring to see how far we can go with. It’s an incredibly expensive project, and one we will be looking hard at, but if we could pull it off, would be a very exciting part of our future.
I look forward to hopefully meeting and seeing many of you at an event at some point this year, and hope that as a country, indeed as a world, this can soon become possible once more.
Take care and thanks for all your support.
