Michael Robert Fortune and Carl Derek Faulds were appointed joint administrators of The Oakleaf Brewing Company Limited on 2nd August 2016.
The administrators’ proposals are now available for creditors and can be accessed here
The company was incorporated in 2000 and operated as a brewery, selling its ales to local public houses and retail outlets. Trading was initially slow however in 2002, when the company was awarded Hampshire Beer of the Year by the Campaign For Real Ale (‘CAMRA’), the level of sales began to increase. In the years to follow the company was recognised with a number of honours from CAMRA and The Society of Independent Brewers (‘SIBA’), including winning Hampshire Beer of the Year five times.
In May 2012 the directors incorporated the Oakleaf Pub Company Ltd (‘Pub Company’). The company was incorporated to provide an additional outlet at which the brewery’s ale could be sold. To do this the Pub Company entered into a lease for a small outlet in Gosport town centre. The brewery provided a loan to the Pub Company to pay for a refit of the outlet and the shop began trading in June 2012 as ‘The Brewpot’.
In August 2015, as a result of a change in the brewery market, the company began to experience difficulties. A number of factors were affecting the company including an increase in the number of microbreweries entering the market and the closure of public houses in the surrounding area. Public houses were the primary customer for the brewery and the closures had a direct impact on the company’s turnover.
In September 2015, to provide a further outlet for the brewery to sell its ale, the Pub Company entered into a tenancy at will for a public house known as The Florist situated in Fratton, Portsmouth. The Florist offered a number of ales with a primary focus on the brewery’s products. The brewery provided financial support and stock on credit to the Pub Company to assist during its initial trading period.
Unfortunately the Pub Company did not trade as expected. The public house was loss making whilst The Brewpot was only breaking even. The directors made a number of efforts to increase the Pub Company’s turnover however this was not sufficient and the Pub Company was not able to repay the amounts borrowed.
During 2016 the reduction in sales became unmanageable and the company was unable to discharge its debts. The directors approached the company’s accountant for guidance and it was recommended that they seek advice from an insolvency practitioner.
The director concluded that a formal insolvency procedure was required to protect the company’s assets whilst securing the best outcome for creditors, possibly by way of a distressed business sale. Administration was chosen because an appointment could be made quickly to preserve the business and put an office holder in place to make pressing decisions before balances dissipated or landlord actions reduced the available assets.
Portland were subsequently appointed joint administrators of the company on 7th December 2015.
Using the powers available to an administrator to continue to trade, the business remained open whilst it was being marketed for sale. It was thought that a sale of the business as a whole would provide a better return than in a break up scenario. The marketing exercise together with the local press coverage resulted in over 20 parties expressing an interest in the business and within a little over a month the business was sold.