E-Malt.com News article: Canada, ON: Brick Brewing to sell its iconic brewhouse in Waterloo

Brick Brewing plans to sell its iconic building and property on King Street South in Waterloo and expand its operations in Kitchener.

The beer maker disclosed the plans in a news release on April 17 in which it reported its year-end financial results.

It said it will use the proceeds of the sale, and debt, to invest in its facilities on Bingemans Centre Drive in Kitchener, including the addition of a brew house.

The building at 181 King St. S., is the public face of Brick, which became Ontario's first craft brewery when it opened in 1984. It contains a brew house, offices, hospitality room and retail store.

The pending sale of the property was described as a win for the company and a win for Waterloo Region's plan to see redevelopment along the light-rail-transit line.

"We will have a chance to invest and expand in the Kitchener location," Sean Byrne, Brick's chief financial officer, said in an interview.

The Kitchener facility, built in 1995, currently houses a bottling plant, as well as a warehouse and distribution centre.

A brew house and offices will be built next to the existing facility, said the company.

"We have extended our lease agreement in our Kitchener facility through 2025, with an opportunity to extend beyond that," said George Croft, Brick's chief executive officer. "We are really, really committed to the region."

The new brew house in Kitchener will be larger and more modern than the aging brewing operation in Waterloo, "which will improve our operating efficiencies and improve our electrical utilization," Croft said.

Byrne said the sale of the Waterloo property also is good for the region because it provides an opportunity for "redevelopment in a growing and active part of the city."

The redevelopment "should fit in nicely with the coming LRT and the other activity along King Street," he said.

The area near Brick's Waterloo building has seen a lot of redevelopment in recent years, including the Bauer Buildings, Red Condominium and the 144 Park condo project.

Brick said there is no firm and definitive deal for the property at this time. "We do say that we are in a position where we anticipate a transaction will be completed within the current fiscal year," he said.

The sale of the Waterloo property will not impact the company's brewing operations in Formosa, Ont., where it makes Seagram Black Cherry, Red Grapefruit, Classic Lemonade and Ice Tea coolers.

Brick reported that it earned net income of C$525,199 on net sales of C$37.7 million in the year ended Jan. 31. That compares to net income of C$351,033 on net sales of C$35.3 million a year earlier.

The company said earnings before interest, taxes, depreciation and amortization (EBITDA) were a record C$4.6 million.

Brick attributed the strong results to its continued focus on cost reductions and growth in its premium brands.

It said its Waterloo Brewing brands recorded volume growth of 35.3 per cent while its Seagram coolers had volume growth of 4.8 per cent. Laker volumes rose 4.5 per cent.

"We are very happy with the year," Croft said.

"We are feeling like we are making good progress and we are thrilled that we are growing our premium brands, both Waterloo and Seagram, in a very significant way," he said.



23 April, 2014