UK-based Black Sheep Brewery is weighing up funding alternatives, including the option of a sale of the business.
The cask ale producer and pub operator said it wants to “take the business forward” by developing its core beers and launching more products.
Without providing numbers, the Yorkshire-based business said it is “experiencing good sales volumes” but said there “remains a significant constraint on funding in light of the prevailing economic conditions”.
In a statement to the London Stock Exchange, Black Sheep Brewery said its board is “considering all options”, including a merger or a sale of the business “if such a solution offers the best outcome for shareholders and other stakeholders whilst providing a stable base for the future of the business”.
“Now is the right time to conduct this strategic review to secure the best outcome for our valued shareholders and other stakeholders,” Chair and CEO Charlene Lyons said.
“The brewery has exciting and ambitious plans for the future and interesting projects in the pipeline. Forward funding is an issue for many businesses in the tight market brought about by the after-effects of Covid-19 on the hospitality sector and this is exacerbated by the cost-of-living issues affecting consumer spending.”
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In the year to 31 March, Black Sheep Brewery posted turnover of £14.2m, up from £13.3m a year earlier. The company posted an adjusted operating loss of £911,752 versus £1.1m the year previous.
Last year, the company took out a £1.6m loan under the UK Recovery Loan Scheme that helped small- and medium-sized UK businesses in the economic aftermath of the Covid-19 pandemic. As listed in its last financial report, the company had £4.4m in loans and overdrafts.
When Black Sheep Brewery published its accounts, then chairman Andy Slee said: “Whilst we are doing all we can within current resources, including the receipt of a £1.6 million RLS loan from the bank in July 2022, the Board continues to look to realise the full potential of the Black Sheep Brand. This need for investment becomes more critical in the face of economic challenges and the need for new equipment to allow us to compete on a level playing field.”
Black Sheep Brewery was founded in 1992 by Paul Theakston in Masham, North Yorkshire. The company was established as an independent brewer that specialises in cask ales. In 2018 Black Sheep acquired York Brewery, which included a number of on-premise locations.
In a bid to diversify its portfolio, Black Sheep launched its first cider in the UK in 2021. That release followed the rollout of its 54 Degrees North lager and the 2019 launch of Black Sheep Yorkshire Dry Gin.