Source: Black Sheep Brewery

The Masham-based brewery has been hit by the effects of the pandemic and soaring costs

Yorkshire brewer Black Sheep is poised to enter administration after failing in its search to find new funding.

The Masham-based beer supplier has issued a notice to appoint administrators following an aborted attempt to secure external investment.

The company yesterday signalled its intent to hire Teneo Financial Advisory as administrators.

Teneo had previously led a process to explore funding options for the group, including a possible sale, after trading suffered from the effects of the pandemic and rising costs.

However, the brewer could yet be saved from administration by late bids for its key assets, with the intention to appoint administrators creating a short-term deadline for interested parties to act.

The group had said on 27 April it is no longer seeking a sale of the company itself, but that it remained in talks over options that could include the sale of ”the business and assets of the company”.

Charlene Lyons, CEO and executive chair of Black Sheep Brewery said: “The directors have done their utmost to deliver new investment into the existing corporate structure.”

“This has not been possible, but we are progressing with our discussions around a sale of the business.”

She said the business had been “hit very hard” by the pandemic and the “sudden rise in all costs”.

“Covid loans were useful but, in the end, could not sufficiently compensate for reduced cashflow in the long term.

“It has been the perfect storm, but the team are confident that with a new structure Black Sheep will thrive and grow as the team set course in a new direction.

“Black Sheep Brewery has great products, a compelling brand and is supported by a dedicated team of people who are capable of delivering great results for the business in a different structure.”

The brewer is understood to employ around 50 staff, and Lyons said management was prioritising continuing brewery operations and protecting staff.

Its most recent accounts for the year to 31 March 2022 showed a pre-tax loss of £1.2m on turnover of £14.3m.

The accounts said brewery turnover accounted for £11m of sales as on-trade volumes returned, but off-trade sales fell to £6.7m from £9.5m.

When kicking off its search for a potential buyer on 11 April, the company said it had “plans to take the business forward with the further development of its core beers and new products to build on its strong brand in Yorkshire, the north and nationally”.

It stated: “The company is currently experiencing good sales volumes of its beers, however there remains a significant constraint on funding in light of the prevailing economic conditions.”