Auditors warning over future of former Cains brewery
For the second year running the auditors to RC Brewery, the Liverpool brewery that rose from the ashes of the Cains Beer Company, have warned about the company's ability to continue as a going concern.
Reporting in the brewer's accounts for the year to the end of September 2010, chartered accountants Mazars LLP said that a loss of £896,000 and net liabilities of £2.8m, plus comment by the company regarding its cash-flow situation, "indicate the existence of a material uncertainty which may cast significant doubt about the company's ability to continue as a going concern".
RC Brewery emerged two years ago from the wreckage of Cains after the latter went into administration in 2008 owing millions of pounds to the taxman and others.
As well as making its own beers and canning products for other brewers, RC Brewery also operates a handful of pubs in Liverpool and for the year to September 30, 2010, reported turnover up 29 per cent to £24.6m , boosted by what it called "winning a number of new customers and contracts".
However for the second year in a row the group could still not make a profit, reporting a loss of nearly £900,000. It made a loss of £1.9m in 2009.
The group said operating losses were cut partly by the rise in turnover and by a "significant drive to reduce costs", but that despite being supported by its invoice finance facility provider, "pressure remains on company cash flows".
Following what it called a "full financial review" the company said it believed it could move back into profit "within the foreseeable future trading within its available facilities with the support of its suppliers".
Key suppliers "have been and continue to be supportive of the company", it added.
The company is owned and operated by brothers Sudarghara and Ajmail Dusanj, who bought the Cains Brewing Company - which they ran prior to its going into administration and in which they both had significant stakes - from administrators in 2008.
The Cains business had collapsed after a reverse takeover of pub operator Honeycombe Leisure and subsequent expansion programme failed to deliver, while the enlarged group owed millions of pounds to the taxman and other creditors, many of whom have never seen their money.
The freehold of the brewery site in Liverpool is owned by a Dusanj family company and was not included in the administration process two years ago.
The ownership of the site effectively helped the Dusanj brothers in their bid to acquire Cains back from the administrators.
The terms of the site's lease meant any company not controlled by the pair which tried to buy the business from its administrators would have had to have paid £1m in rent, versus an approximate £600,000 rent bill if the business was owned by a company controlled by the brothers.
However it is not clear if any rent has actually been paid by the brewery to the Dusanj-linked company.
Sudarghara Dusanj had not returned calls as this story went to press.
