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11
Feb
Taxpayers and creditors to lose millions from Black Sheep Brewery administration
Taxpayers and creditors are to lose millions of pounds after a Masham brewery entered administration for a second time in less than four years.
Great British Drinks Company bought Black Sheep Brewery as part of a £6.5 million deal in January after its parent company, Keystone Brewing Group, filed multiple notices of intention to appoint administrators late last year.
The move saved 145 jobs and included the acquisition of other brands including Purity Brewing Co, Brew By Numbers, Brick Brewery, North Brewing Company, Magic Rock Brewing and Fourpure Brewing Co.
However, a report from administrators, FPR Advisory, reveal that HMRC and trade creditors are owed millions following the administration.
HMRC has a claim of £2 million in VAT, PAYE and owed duty from Black Sheep. But, the report said that there are “insufficient funds” to make a payment to taxpayers.
HMRC also has a claim of £1.6 million from other parts of Keystone Group.
Administrators added that trade creditors are owed over £2.2million from Black Sheep and its sister brands owed traders a further £745,000.
Local creditors and the amounts owed include:
- Infinity Blue Group Harrogate (£16,116)
- RCS UK Group (£7,486)
- Harrogate Town FC (£6,400)
- Marton Consulting (£6,154)
- Yorkshire Vinters at Melmerby (£5,562)
- Corks and Case at Masham (£5,544)
- Delamode Nidd at Melmerby (£2,580)
- Gregg Electrical Masham (£2,373)
- Ripon Engineering Supplies (£1,091)
- H&H Water Services Ripon (£1,008)
But the report said:
It is currently anticipated that there will be insufficient funds to distribute to unsecured creditors in the administration.
Meanwhile, the Secure Trust Bank, which gave the group working capital and was its largest creditor, is owed £8.6 million.
Administrators said it is anticipated that the bank will receive some money, but that there will be a “shortfall on their debt across the group”.
‘Persistent cost inflation’
The report, which has been filed on Companies House, said that Keystone was established in May 2023 after it acquired Black Sheep.
The group, which had 150 employees, aimed to consolidate its brands into a “scalable and sustainable group”.
However, the report said:
Following the group’s restructure, a combination of persistent cost inflation, margin erosion driven by sales mix and suppressed consumer demand continued to adversely impact on the financial performance of the group.
Shareholders injected £3.75 million into the group last year, including £1.5 million in September in “anticipation of a seasonal sales uplift” over autumn and winter.
However, the report said the uplift did not materialise and the group projected a deficit of £2 million which made continued trading “unsustainable without further support”.
Anthony Collier and Martyn Rickels, of FRP Advisory Manchester, completed the pre-pack sale of Keystone and its assets to Great British Drinks Company as joint administrators on January 22 this year.
The administrations said Keystone had faced “increasing financial pressure as a result of challenging trading conditions across the brewing and hospitality sector”.
Black Sheep Brewery was founded in 1992 by Paul Theakston, a member of Masham’s Theakston brewing family. He left his family's business, T&R Theakston, to start his own independent brewery, becoming the “black sheep” of the family – hence the brewery’s name.
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