Cornwall’s St Austell Brewery went from making a healthy profit to sustaining a £10m before-tax loss during the worst of the Covid pandemic, new accounts show.
The company, which remains independent and family-owned, has revealed it was pitched into the red during 2020 after having made a £10.9m pre-tax profit only a year earlier.
The St Austell Brewery Company Ltd’s Annual Report and Accounts, now filed at Companies House, show revenue fell to £117.6m in 2020 from £189.6m in the year before the pandemic.
It brought to a juddering halt years of solid growth, with turnover rising from £153.2m in 2016, to £169.3m in 2017, and £179.6m in 2018. Before-tax profits were also more than £10m in each of these years.
Will Michelmore wrote in his chairman’s statement that the Covid pandemic “cast a massive shadow over the business” in 2020, despite “very positive” trading during the summer when restrictions were temporarily lifted.
The initial lockdown saw supply to the off-trade hit record levels, but, with pubs shut, turnover was only about 10% of what was normally expected. Then the November lockdown, and then the tiered system followed by the third national lockdown, really hit the business. Despite taking Government support and using the furlough scheme it fell short of meeting the company’s overheads.
In early 2021 the brewery secured a “significant” loan from its bankers to enable it to weather the coronavirus lockdown and plan for the future. The report said St Austell Brewery secured £25m of additional finance from HSBC and NatWest as CBILs loan.
And Mr Michelmore said: “We were able to put new facilities in place that will underpin the business for the next few years. This will ensure that we give ourselves the best opportunity to recover brilliantly.”
With senior staff taking a temporary pay cut in 2020, it was then agreed that no staff would receive a pay increase in 2021. The company announced 100 job losses in 2020 and the newly filed accounts reveal redundancy costs came to £1.2m.
Mr Michelmore stressed the company - which owns more than 180 pubs, inns and hotels across the West Country including managed houses and tenanted properties and Bath Ales too - was resilient.
He said: “The company will survive and then thrive because it has a great leadership team and a clear, focused strategy, underpinned by a diverse offer and a portfolio of many of the best pub sites in the South West.”
He said the largely freehold asset base and relatively low levels of debt will put the company in a good position to recover from the pandemic.
Kevin Georgel, chief executive, said the Covid crisis had been “a major challenge” but was confident about the future, and said: “We have a strong reputation for the quality of our beers, that consumers demand both in the on-trade and increasingly in the off-trade.”
