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'Drinking less but drinking better' may give craft brewer a Covid lift

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Rye River founder and MD, Tom Cronin

Rye River founder and MD, Tom Cronin

Rye River founder and MD, Tom Cronin

Craft brewer Rye River is to seek fresh investment to fund expansion at its Co Kildare plant, after completing a sale and leaseback to reduce debt earlier this year.

Managing director Tom Cronin said despite Covid-19, revenue is on target for 2020 - boosted by the strength of the domestic off-licence trade and contracts to supply own-brand beer to clients including Lidl across Europe.

The Covid lockdown may even prove a catalyst for the craft beer sector in Ireland which has been relatively stagnant at just 2.5pc to 2.6pc of beer sales, he said.

"People are slowing down, they are drinking less but drinking better," he said.

Rye River Brewing Company, understood to be the country's biggest craft brewer by sales, reported an operating profit of €154,934 for 2019, up 82pc on 2018.

The brewery produces the McGargles brand as well as Crafty Brewing Company for Lidl, Grafters which is sold in Dunnes, and Solas sold in Tesco.

The heavy focus on food and moderation once the pub trade reopens may also benefit niche brewers relative to the big brands, he said.

The loss of the pub trade since the start of the lockdown has hit sales, and the company has had to provision for expired stock that will start to return once bars reopen, he said.

But that was offset by off-licence sales and contracted production.

The business recorded its operating profit for 2019 on earnings (ebitda) of €743,345.

The business is on track to double its profit by the end of 2023 in line with its five-year strategic growth plan, Mr Cronin said.

A loss for the 2019 financial year after taxation was €62,417 with a profit after tax expected for 2020, he said.

The company entered a sale and leaseback agreement for its Celbridge premises in March this year, with the €3.3m proceeds used to reduce debt.

The business is now about to go into a process to secure fresh investment that will be used to fund expansion, which includes equipment and plans for a new canning line this year.

Rye River has previously secured investment from BlueBay, most recently €2m in 2017 as part of a bigger operational and balance sheet restructuring including a debt for equity swap.

Irish Independent