Friday, 13 January 2012

Very profitable McEwan's

There's a big advantage in having breweries public companies. To me, I mean. Because then they have to publish accounts. It's a piece of piss to see how much money they were making. Especially now I have access to the British Newspaper Archive.

Let's start in 1892:

W. McEwan & Co.— The Directors of William McEwan & Co., Fountain Brewery, state that the profit for the year, including £7592 brought forward was £131,632. The 5 per cent, dividend on the preference share, absorbed £25,000, and the Directors recommend that the balance be apportioned—dividend of 10 per cent, and bonus, of 5 per cent, on ordinary shares, £75,000 ; reserve fund, £20,000 to be carried forward, £11,632.
Dundee Courier - Tuesday 2 August 1892, page 2.
Now 1894:

Fountain Brewery, Edinburgh, announces a dividend of 10 per cent. and a bonus of 10 per cent. on the ordinary shares, after the payment of the 5 per cent. dividend upon the preference shares. The sum of £10,000 is placed to reserve fund, and a balance of £25,758 is carried forward.
Aberdeen Journal - Thursday 2 August 1894, page 3.

And finally 1896:

William McEwan and Company, Limited, Fountain Brewery, Edinburgh, report that the accounts of the company show on the year's operations (including £30,591 14s. 5d. brought forward from last year), a profit of £206,431 8s. 2d. After payment of the 5 per cent. dividend upon the Preference shares, amounting to £25.000, the directors have decided to dispose of the surplus as follows:—In payment of a dividend of 10 per cent., and a bonus of 20 per cent., on the Ordinary shares, £150,000: balance, carried forward. £31,431 8s. 2d.; the reserve fund remains at £100,000.
Sheffield Daily Telegraph - Saturday 1 August 1896, page 8.

Let's see how much that all adds up to for the Directors who were pocketing the dividend and bonus for the ordinary shares.

year % divdend and bonus amount
1892 15 £75,000
1894 20 £100,000
1895 25 £125,000
1896 30 £150,000
total £450,000

In just four years they received almost as much in dividends and bonus as their share of the brewery was worth (£500,000). Remember that the Directors had already trousered half a million quid from the sale of the preference shares to outsiders. And that's at a time when a barrel of ordinary beer cost just £3.

It all goes to show what a profitable business brewing could be at the end of the 19th century.

1 comment:

Gary Gillman said...

Very striking data. Factoring too the absence of corporate and income tax at the time - I haven't studied it but believe this to be so - these levels of income are remarkable and surely helped create the "beerocracy".