Black Sheep Brewery has reported a profit in its 2020-21 financial year, despite the significant impact of the pandemic.
Black Sheep chief executive, Charlene Lyons. Photograph: Black Sheep Brewery
For its financial year ending March 31, 2021, the Masham-based brewery achieved a profit, before interest and tax, of £1.014 million.
Contributing to its success was Black Sheep’s ability to diversify and mobilise a more substantial ecommerce operation from the outset of the pandemic, when pubs were forced to close, and the population was asked to remain at home.
Black Sheep saw its online sales rise to £741,951 compared to £108,150 in the previous year. This was supported by strong growth in its off-trade sales with customers also able to buy Black Sheep products from supermarkets and other retail outlets during the lockdowns.
Its off-trade turnover grew from £6.86 million to £9.54 million, boosted by additional sales of brands such as Black Sheep Ale, which outperformed the national ale category average of 21.4% with a 35.9% growth in sales. The UK’s mainstream stout category saw growth of 47%, which was outperformed by Black Sheep’s Milk Stout, which experienced growth more than 50%.
During the financial year, which corresponded with the first year of the pandemic, Black Sheep innovated its products and services, which supported its positive performance. It introduced beer delivery and collection services, a food delivery service, and relationships with other ecommerce sites and small Yorkshire farm and retails shops.
These sales were bolstered by the continued innovation of its brewers, who created nine new beers during lockdown and also, for the first time, sold Black Sheep Best Bitter in bottles while pubs remained shut.
Black Sheep’s off-trade and ecommerce growth compensated for the fall in its on-trade sales, which were dramatically affected by the forced closure of pubs and restaurants. Unsurprisingly, sales fell from £9.83m to £2.24m during the financial year. In addition, with Black Sheep’s own collection of five retail outlets closed during the lockdowns, retail turnover reduced from £2.72m to £1.5m.
As a result of the restricted performance of its off-trade and retail operations and wider impact on the business of the pandemic, Black Sheep returned an adjusted operating loss of £1.05 million, which after exceptional items, such as redundancies, insurance proceeds, and income from a settled legal dispute, saw the company achieve its £1.014m profit.
Andy Slee, chairman of Black Sheep Brewery, said: “The fact that Black Sheep was in a stronger financial position at the end of March 2021 compared to March 2020 is simply extraordinary and testament to every member of the Black Sheep team who have made sacrifices to make this happen.
“With other companies in our sector, much larger than Black Sheep with centuries more heritage, reporting that last year was the most challenging year in their history, I have an overwhelming sense of pride in the efforts we have made to ensure this business has a positive future and can continue to serve our popular range of products to a loyal and growing customer base.”
Charlene Lyons, chief executive, added: “While the pandemic defined our last trading year, it created many opportunities for Black Sheep. Faced with the scenario that all pubs, which are our dominant customer base, were forced to close, we had to act swiftly.
“Utilising all government schemes and grants, our focus was on diversification and the obvious pivot towards ecommence. We transformed a small part of our business into a thriving service as customers wanted to get their taste of Black Sheep while they remained at home. Year-on-year growth in our online sales was 600% and trade has remained strong since pubs re-opened.
“I am immensely proud of what we have achieved in a year like no other, when the businesses’ very existence was threatened by the pandemic, but was characterised by the will, determination, dedication, and commitment of everyone at Black Sheep, whose contribution has been outstanding and exemplary. It has given us the platform for the next stage of hard work as we aim to strengthen our position in our key markets.”
