30 Jun 2017 | 05.13 pm
Rye River Brewing Posts €3.5m Loss
First big flop among Irish craft brewers
30 Jun 2017 | 05.13 pm
Craft brewer Rye River Brewing Company in Celbridge, whose best known brand in McGargles, booked a net loss of €4.3m in 2015 a net loss of €3.5m in 2016 according to accounts filed today.
The craft brewer ended 2015 with net liabilities of €3.7m and was bailed out in 2016 through funding from private equity firm Bluebay Ireland Corporate Credit. At end December 2016, net liabilities amounted to €7.1m.
Through 2016, Rye River Brewing increased turnover by 3.3% to €8.5m, with €7.7m of sales generated in the Republic of Ireland. Sales in the UK and Europe increased from €100,000 to €719,000. Employee headcount through 2016 averaged 62 people compared with 52 the year before. The payroll cost including social insurance was €2.1m, up from €1.9m in 2015. The company’s operating loss was €4.1m in 2015 and €3.1m in 2016.
Rye River was set up in 2013 and revenue in 2015 increased by 60% to €8.2m. Gross profit declined by 17% to €1.9m and administrative expenses zoomed from €2m to €5.3m. In the accounts filing for operating company DP Financial Ltd signed off by the directors on 30 June 2017, directors Michael Merrins and Peter O’Donoghue – appointed on 2 June 2017 – recount the unfortunate tale.
After securing big export orders and a national distribution contract for third-party beers in 2014, Rye River Brewing Company ramped up and relocated from its original brewery in Kilcock to a new brew house in Celbridge.
The directors state: “The investment and operational expenditure required had a significant impact on the company’s cost base. In addition, due to contractual issues with its largest agency brand, further stresses on the company’s cashflow materialised.
“These issues, combined with lower margins on agency brands and a disappointing return on investment in North America and Asia, led to losses in 2015 and 2016. The directors, with the support of the company’s investors, undertook a review of operations in 2016 with a view to putting RRBC on a sound and sustainable commercial platform.”
The directors add that they have a reasonable expectation that the company will have adequate resources to continue operating for at least the next 12 months. “The company is financed by way of equity loans from Ulster Bank and Bluebay Ireland Corporate Credit. These parties have confirmed that they will continue to support the company for a period of at least 12 months from the date of the approval of these financial statements.”