Redchurch - Red Faces. Debts to HMRC of almost £950k.

Redchurch Brewery's collapse is being blamed by management on the departure of their Head of Sales. The fact that they owed HMRC £950k and were under threat of imminent action might also have something to do with it.

Looks like these guys couldnt organise a piss up in a cardboard box.

The Administrator's report is rightfully damning. Redchurch took almost £900k off around 700 Crowdcube investors in two rounds. And they couldn't even replace the Head of Sales or pay the tax that was due.

The big departure, which led to a 'significant downturn' in revenue according to the report, took place in 2017 - the same year of Redchurh's second round on Crowdcube. The timings would be interesting as this wasn't mentioned at the time. You also have to wonder if this is how business really works. Sales are generated in advance and once pull through starts, they carry on. The HofS' job is then to gain new business. So a significant fall in existing revenues should not be caused by his departure - not in the short term.

We have evidence that shows that the Head of Sales in their 2017 pitch had only joined the company in 2016. So how is it possible that someone who has been at the company for around 12 months can have such an enormous impact on departure?

We also have evidence from this second round that the pitch changed its rewards upwards to increase investments. Bet you guys who bought into this - in fact some of you requested it - are now regretting the move.

The Director owed the company £21k in an outstanding loan and the debtors contained £35k of write offs. Some creditors will claw back something and the Insolvency guys are happy, as the company was sold in a pre pack for £220k to a newco - Redchurch London Ltd. Investors lost the lot including their perks.

So here we have the crazy situation where HMRC are giving invetsors 30% tax breaks on investing in a company which 20 months later has wracked up unpaid tax debts of almost £1m - which are now largely written off. And investors were only investing for free beer and the 30%. Building UKSMEs my arse.

Next round's on you. 

Another Crowdcube brewer runs out of hops

Following on the mess at Hopstuff, The RedChurch Brewery Ltd has gone into administration taking all its investors with it. This is not a place they wanted to go. It certainly will not deliver the perks that over 700 investors were looking forward to.

Redchurch, a London based craft brewer, used Crowdcube twice, in 2016 and then 2017. A total of just under £900k was invested by the Crowdcube faithful. Accounts were due next month.

The numbers are not out yet  - The Gazette posting was only a few days ago. Nothing filed at CH. Maybe this will be a prepack. Investors will still lose out. 

Lessons learnt - none. 

Members of ECF.Buzz will be pleased to know that we had them (Redchurch not our members) marked as hospitalised following last year's accounts, which showed a loss of £290k against a Crowdcube projected profit of £412k. You see these things do actually matter. 

Redchurch Brewery post large losses despite selling large profits

Redchurch Brewery has raised £895k on Crowdcube since 2016. Projected profits for YE June 17 have turned into large losses.

It's a story you will all be familiar with. Expectation management gone missing in action. But it keeps on and on and on happening. Promises of deals with Tom Dick and Harry have not resulted in the revenue numbers being catapulted into the stratosphere. Maybe the tunnels all proved to be dead ends. The company was flushed at the year end with NCLs sitting at minus £400k. It will need more cash. Heard it all before?

It is really very disappointing. 

Redchurch pitch shows Crowdcube dont listen.

Redchurch Brewery raised £500k last year on Crowdcube at £2m. Having missed all their targets and burnt their cash they are now back for another £400k at £5m.

What is it Crowdcube dont understand?

Redchurch may well be a class brewer but their business management is taking the P. They have managed around 50% of the projected sales in the 12 months since they were last here. Do they understand that these figures dont work inversely? You cant half your turnover, increase your losses and then more than double your valuation. That only happens in politics.

Whether on advice from the Crowdcube interns or not , common sense dictates that the company cannot be worth 2.5X what is was 12 months ago. The company even admits that sales have been slower to take off than they anticipated. So why the increase?

What makes it even more ridiculous is that the projected figures for 2015/16 are also miles out when set beside the filed accounts. And they were mainly actuals in the 2016 pitch. YE June 2016 showed a filed loss of £170k against a 2016 projected profit of £1000. You simply cant believe what they say.

From the comments on their forum, it's clear investors are not too happy. Nor would we be. So as not to alarm last years intake, they havent produced any detailed figures in this new pitch. Wonder why?