Integrated brewing, the Liverpool way
Brothers Sudarghara (Sid) and Ajmail (Bill) Dusanj - owners of Liverpool's Robert Cain brewery - have taken a bold step in effectively buying Honeycombe Leisure and its 100 or so North East England pubs.
The pair, regaled as heroes in their adopted home of Liverpool for rescuing Cains from collapse five years ago, have long wanted to find a simpler and more profitable route to market for their beers. They clearly saw the opportunity to snap up Honeycombe and gain a listing on the Alternative Investment Market into the bargain as too good to pass up.
But while the potential is there, by Sid's own admission it's going to be a long haul. The pubs need a lot of work, as indicated by the millions of pounds being earmarked for refurbishment and investment programmes.
The need to improve the brewer's margins will doubtless have counted towards the acquisition's rationale. Pre-tax losses have gone from more than £250,000 in 2003 to a profit just shy of £390,000 last year.
But while Cains' EBITDA growth mushroomed in the early days of the Dusanjs' ownership, it lately has slowed significantly, as the capacity to strip out yet more costs has reduced.
Sid and Bill will be looking for the pubs to boost Cains' historic pre-tax profit margins of 1.6 per cent.
And as ever, only time will tell…
Overdoing it?
News that Swindon's Archers Brewery has gone into administration due to 'cashflow problems' is sad news, no more so than for the staff affected.
One thing puzzles me though. I don't know the precise details of the brewer's trading history, but could the fact that it produces 190 different ales for pubs around the country - a staggering number in my view - have contributed in some way to the situation?
