Black Sheep takes ‘steady as she goes’ approach

BLACK Sheep Brewery has hit out on the effects of beer duty on the industry and its bottom line as the Yorkshire company posted reduced full year profits.

The Masham-based brewer kept turnover almost flat at £18.35m for the year ended March 31 but saw pre-tax profits dip from £613,756 to £464,878.

However, its profits were markedly better than its 2008/09 figures when profits were £85,000.

Black Sheep is planning to introduce new beers to its range as it looks to bring its products to a wider audience.

And it has acquired the former Danby Foods factory in Masham which it will initially use as a base for its distribution, telesales and technical services operations, moving them from the brewery’s headquarters in the village.

Writing in the company’s annual directors’ report, Robert and Paul Theakston, managing director and chairman of the brewery respectively, said: “Whilst we were thoughtful about making such an investment during difficult times we can now look forward to the development of the business in Masham over the next 20 years with complete confidence – we have all the expansion space we need in the right location.”

They described the brewery’s performance over the financial year as following a “steady as she goes policy in these difficult times”, but said both the cask and bottled ales markets were “depressed”.

Tony Robinson, who has stepped down as chairman but is remaining with the business as a non-executive director, said the company had been encouraged by its positive start to the current financial year.

“We have not gone out for volume at any cost, have worked hard to refine our sales mix progressively to move unprofitable sales to better quality ones, and have controlled overheads and cash flow rigidly,” the Theakston’s said.

“This has resulted in an unexciting but secure year from the point of view of profitability and financial stability, enabling us to sustain our dividend policy, work well within our banking facilities and continue to invest in the business for the future.”

The annual report slammed the effect of beer duty and successive duty increases on the brewing industry and said consumers were struggling to afford to buy beer because of the downturn and subsequent consumer spending squeeze.

“From the brewery’s point of view, the Chancellor now takes just under £7.5m a year from us in duty, and every increase he makes reduces our gross margin.”

Concluding their report the Theakston’s said: “We will continue to push hard in the marketplace keeping Black Sheep in the forefront of peoples’ minds and on their bars, and push the business through the economic hurdles and on into exciting times ahead.”

Black Sheep held its annual general meeting on September 22.