DISAPPEARING pubs and a fragile economy have led to Black Sheep Brewery reporting a “substantial” loss for the year – its first since the very early start up years.
The Masham brewery reported a pre-tax loss for the year ended March 31 2013 of £740,000. Turnover decreased from £19.9m to £18.8m. However, in its latest financial report filed at Companies House, the business said it is optimistic that it can return to “solid” profitability.
Managing director, Robert Theakston, said: “To say that the financial year has been a challenge is a large understatement. We endured the perfect storm from one of the wettest summers on record, the fragile economy, the ever burgeoning micro-brewery trade and the effect that has on all the breweries that don’t benefit from the Government’s Progressive Beer Duty, and the ever-changing landscape of the pub trades as pubs disappear and the large multiple pub groups who are still trying to put themselves in a better financial position sell off their estates.
“Black Sheep’s challenge in all this turmoil has been to try and re-shape ourselves into a business that is more tuned to the fast-paced and changing market in which we find ourselves.
“We have been fortunate to be able to grow organically throughout our 21 year life, but that was in the context of a very different market. The challenge now is to push the business on but be more adaptable and better able to react to future opportunities and threats that may present themselves to us.
“We have spent a significant amount of time developing our recovery plans for the next 18 months and we fully expect to turn the business back into a profitable one within that timescale.”
Robert Theakston said the firm is particularly focusing on the more buoyant parts of the beer market – takehome and export. UK takehome is increasing its overall share of business with volumes growing 4.4% year on year. Black Sheep also said it is introducing keg Best Bitter to tap into new venues to take advantage of other opportunities to take the firm forward.
Last year, Black Sheep Brewery celebrated the 20th anniversary of its launch by Paul Theakston, a member of the famous beer-brewing family. He took the role of chairman at the business in 2011, with eldest son Robert taking over as managing director.
Paul Theakston said he is optimistic about Black Sheep and its prospects for the future.
“The results for this year mask the fact that despite all the adverse conditions for trading for a brewery of our size total volume sold into the local direct trade, wholesalers and takehome declined by only 1.3% year on year, in the face of a 5.1% decline in the national beer market.
“Our Achilles heel has been in our cask beer sales to the national pub companies, where downsizing of the estates and a policy of buying an increasing proportion of their cask beers from micro-brewers, thus taking advantage of a significantly reduced buying in cost through the progressive Beer Duty, has been the order of the day,” he said.
He said the management team had been working to take cost out of the business, reshape the direction of sales and set the company on the road back to solid profitability. He added that new and different beers coming along help it adapt to the ever-changing needs of the market.
