Brew By Numbers

Brew By Numbers entered administration last month after becoming unable to pay its debts.

Unsecured creditors owed more than £1m by Brew By Numbers are unlikely to receive any of the money overdue to them from the insolvent south London brewery.

Administration documents published by Evelyn Partners reveal the extent of debts racked up by the craft brewer, which entered administration last month.

Joint administrators Finbarr O’Connell and Colin Hardman said they did not “anticipate that there will be sufficient funds” to pay back unsecured creditors once a £220k sale of the business to an as-yet undisclosed party concludes.

The brewery’s secured creditors – Lloyds Bank and other lenders – as well as HMRC, are also set to lose out on cash they are owed.

As of 24 July 2023, Brew By Numbers owed £528,951 in charges and to secured creditors (including various plant and equipment subject to ‘hire purchase’ agreements). In addition, the company owed £175,732 to HMRC for PAYE and VAT contributions.

It’s total deficit to unsecured creditors, meanwhile, stood at £1,063,798, including £753,858 to aged creditors and £178,524 in unpaid beer duty.

O’Connell and Hardman said they expected Lloyds and other creditors would “suffer a shortfall on monies owed” once the sale and costs associated with the administration had been accounted for.

The administrators fees have mounted as the brewery’s ownership and later the administrators themselves sought to find a solution to its financial woes.

The joint administrators listed their administration and pre-administration fees at £128,192 and £152,145 respectively.

The total costs of realising the sale as of 24 July stood at £450,505. With the administrators listing the value of the company’s assets (including funds owed by debtors) at £466,509, this means just £16,003 is available to pay ordinary preferential creditors including HMRC.

O’Connell and Hardman said secondary preferential creditors and unsecured creditors would only receive any payment after all secured creditors and ordinary preferential creditors had been paid.

Pre-pack sale plan scuppered

The administration documents also shed further light on the brewery’s co-founder and director Tom Hutchings’ attempts to complete a pre-pack sale to a connected party known to the business.

Hutchings, O’Connell and Hardman said, had wanted to sell to a group of previous investors and third parties whose offer would have enabled him to continue as a director.

However, “concluding the sale with the preferred bidder became protracted,” the administrators wrote, adding it was “marred by complications” including getting the correct licences from HMRC and the local council to continue brewing and selling beer at its taprooms.

This led to the filing of notices of intention to appoint administrators between 4 April and 6 June.

On 14 June, O’Connell and Hardman were appointed and the business entered administration.

After their appointment, an unconnected bidder immediately came forward, claiming to have been the highest bidder on three previous occasions.

The bidder is yet to be identified, but is understood to be Breal Capital, the private equity firm that has already completed pre-pack deals for Black Sheep and Brick Brewery this year.

In May, a company called BBN Brewing Ltd was incorporated, with Brent Osborne, Breal’s founder, initially listed as its director. The company states ‘manufacture of beer’ as the nature of its business at Companies House.

O’Connell and Hardman restarted the sales process on 20 June and, after receiving five offers for whole or part of the company’s business and/or assets, accepted an offer from the bidder on 7 July.

The administrators proposals for the sale are expected to be approved on 7 August.

Brew By Numbers was founded in 2011 by Hutchings and David Seymour. The Greenwich-based brewer has produced more than 350 beer varieties and at various points has supplied supermarkets including Tesco, Sainsbury’s and M&S.