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An Introduction and Guideto Investment Opportunities

SUMMARYJennifer Tingay brewed Southbourne Ales’ first beer Paddler on New Year’s Eve 2014, with the objective of producing quality ales in South East Dorset.

In 2015 Stroller Oatmeal Stout received a silver medal in its class at the International Brewing Awards – since 1886. Entries were received from 60 countries and judged by 40 brewers from 16 countries.

Sunbather Red Ale was awarded first prize at The Label of the Year – 2015.

The Dorset Magazine’s readers voted Southbourne Ales Dorset’s best new business in their ‘Food, Drink and Farming Awards 2014’.

Premises have been secured on Poole Hill in Bournemouth town centre.

The company is selling new shares through the crowd funding platform Angels Den to invest in the continued growth of the business.

SOUTHBOURNE BREWING LIMITED

INVESTMENT OPPORTUNITY

THE BOARDJENNIFER TINGAYQualified and award winning brewer. Member of the Institute of Brewing and Distilling and Campaign for Real Ale. Significant experience in biological and analytical laboratory testing of beer, managing quality assurance, health and safety, hazard analysis critical control points, document control, internal and external audits and a production team. Background in licensed trade as pub tenant and a licensed retail manager.

SHELDON YOUNGSenior Architectural Technologist and award winning interior designer. Graduated from Leeds Metropolitan University in 1993 after studying 3D Design. 20 years experience with new builds of all categories (industrial, medical, residential, retail, military, etc.) as well as sensitive conservation refurbishments. Expert in gaining planning approval and building control approval, and delivering detailed construction information for contractors. Fluent with 2D and 3D AutoCAD, Photoshop and SketchUP.

PAUL RYDERNew Business Director for a talent research and insight consultancy. Has 15 years Marketing and Communications experience. Holds a Degree in Business Studies from Northumbria University, a professional Diploma in Marketing from Chartered the Institute of Marketing and an MBA from the Durham University Business School. Charity trustee and Director of Jesmond Community Leisure.

THE COMPANY STRUCTURESouthbourne Brewing Limited is the parent company of Southbourne Ales which operates as the brand, Poole Hill Brewery, taproom and visitors centre as well as Tingay’s Limited.

UNIQUE SELLING POINTS

• High quality products supported by Stroller winner of a silver medal at the International Brewing Awards – since 1886 and derived from Jennifer’s background in Quality Control and Assurance.

• Strong product branding designs backed up by Sunbather winning Label of the Year in 2015.

• High level of customer service, enhanced by staff training and work procedures.

• Large range of products to cater for taste preferences and the expanding mixed pack market.

• Strong business and consumer brand loyalty.



THE BREWERYThe property is situated on the outer edge of Bournemouth town centre with excellent access to trunk roads, public transport and within walking distance of the main shops and attractions.

The building formally housed the towns Arts, Science and Technology College and the ground floor and basement was occupied by Bayley & Sons, an ironmongers who also operated the town’s phonographic service.

Licensing and planning has been granted for a brewery with tap rooms and a visitors centre.

A ten year lease has been negotiated.

The brewery will initially have the capacity to produce 900,000 pints a year.

The tap room shall occupy the front façade of the structure, have a traditional Victorian feel, provide table service and offer a complete range of beverages along with showcasing our own products.

The visitors centre will open in time for the CAMRA Annual General Meeting at the Bournemouth International Centre in 2017 and shall operate 7 days a week, providing guided tours, educational visits and tutored tastings.

THE BRANDSSouthbourne Ales has an established selection of 8 traditional beers designed to suit all palates in cask and bottle.• Range based on market research findings.

• Designs are targeted at the growing female market without excluding male drinkers.

• Art Deco graphics are suitable for a range of high quality merchandise available from the Brewery and on-line.

• There is room for additional products incorporating special events or limited editions.

• A second brand Tingay’s will have a selection of 4 beers including a craft lager.

• Distribution via a national brewery to pubs and supermarkets with the potential to export to Europe.

• Sales maximised in mixed 4 and 8 packs suitable for the growing take home market.



MARKET OVERVIEWBournemouth receives 88 million visitors per year spending £500m.

10% of UK tourism is now driven by food and drink.

CASK ALE

Cask ale is in volume growth out performing the on-trade beer market by 4.5%. The UK now drinks 634m pints of cask ale every year worth £1.72bn.

Cask ale is increasing its rate of sale – more pubs are stocking more cask ales and selling more as a result.

Cask ale is increasing its market share. One in six pints of beer served in pubs is cask ale. Almost 60% of total on-trade ale is now cask with keg share declining sharply.

Cask ale is recruiting new drinkers. In most parts of the country and most styles of outlet, old stereotypes are fading. Women and younger drinkers continue to convert to cask – though some licensees are failing to recognise the evolving profile of drinkers and the opportunities this presents.

Data Source: Cask Report-2014 by Pete Brown

BOTTLED ALE

The Premium Bottled Ale Market was worth £538m in 2015 and remains on target to be worth £1bn by 2020.

42.9% of the market is held by just 4 brewing companies, Marston’s, Greene King, Shepherd Neame and Hall and Woodhouse. A annual drop of 8.1% from 51%.

There are openings in the market for multi packs and mixed style packs which have huge growth potential in the take home market which has now out stretched the on trade. Mini keg has seen a 52% year on year growth.

Data Source: Premium Bottled Ale Report 2016 by market leader Marston’s Plc.

FINANCIALSGrowth rate based on attaining 0.5% share of the premium bottled ale market in three years and a turnover of £1.4m annually. • BE Point Sales Value £545,569

• BE Point Target Month 11

• BE Point Barrels 1805

• Cost per Barrel £102

• Price per Barrel £300

• Fixed Costs £361,459

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Market Sale ofTingay’s Brand

BreakEven

Monthly Profit

Monthly Revenue

Monthly Forecast of Growth



CROWDFUNDINGFirst round raised £149k for 10% of the business with SEIS approval.

Second Round selling up to 20% of the equity with incentives.

EIS tax relief for investors has been approved (subject to eligibility).

SHAREHOLDER BENEFITS

Silver Investor from £100Five ordinary shares plus 10% discount card for life and a limited edition bottle of beer.

Gold Investor from £4,500Invitation for two people to post AGM parties.

Platinum Investor from £9,000 Invitation for two people to annual Brewster’s Dinner (black tie).

Platinum Plus Investor from £45,000+ Brewing/fermenting vessel named after a person or event, an excellent excuse for a party or charity fundraiser.

More information on crowd funding can be found at www.angelsden.com

Investing in any business involves risks, including liquidity, lack of dividends, loss of investment and dilution, and it should be done only as part of a diversified portfolio.

EXIT STRATEGYOur exit strategy considers both ethical and financial investor’s needs which has been important in gaining the support of local ale drinkers and investors. We shall also offer an employee share saving scheme, which will maintain a market for purchasing shares that are up for resale.

OUT SOURCING TINGAY’S By year three Poole Hill is forecast to be at capacity, with Tingay’s representing 0.5% or £1.4m of the national premium bottled take home market. If this represents just one supermarket chain (Sainsbury’s) this would equate to 1 in every 32 bottles of ale sold being Tingay’s. Once the production is being brewed and bottled at a major UK brewery, increased sales can then be extended across the whole market substantially raising market share as well as the value of the brand.

SALE OF TINGAY’S In three to five years time, the sale of our national brand Tingay’s aims to raise a predicted £50m. As an example Camden Town were taken over for £85m by Anheuser-Busch InBev (AB InBev) in 2015. A snap shot of Camden Town in 2014 (prior to their latest round of crowd funding and sale) showed net worth at just £468.1k.

EXIT IN 3-5 YEARS The sale of the Tingay’s brand, will produce the funds for a company buy back, giving investors the option to sell some or all of their shareholding and reducing the total number of shares. Southbourne Brewing Limited will then work at delivering dividend returns and potentially developing new brands and expanding into new markets.

EXIT IN 10 YEARSOn the run up to year 10, management and staff will be offered first refusal for the sale of the business or sections of the business.



QUESTIONS & ANSWERSWhat is EIS? EIS is a tax relief scheme designed to help encourage investments in small and medium sized businesses. Up to thirty percent of the value of an investment can be reclaimed as tax relief.

Will I be paid dividends? During the first three years due to the EIS tax relief we will not be paying out any dividends. During this time profits will be re-invested in the business to maximise the potential of the Tingay’s brand and ensure the brewery is in a secure position for the future. Dividends will be paid out of profits once the Tingay’s brand has been sold to the remaining investors on an annual basis.

Who can I sell my shares to? Shares can be sold privately but any shares must first be offered to existing shareholders and any details of changes in shareholdings must be sent in writing to the board of directors and stock transfer forms will need to be completed. Southbourne Brewing Limited when funds are available will offer to purchase shares through a “share buy back”. Shares purchased will be offered as part of the share saver scheme for staff or removed from the register to increase the percentage holding of the remaining shareholders.

What do I receive when I sell my shares?The price will be based on the value of the whole company at the point of Tingay’s being sold and after that the share price will be set at each AGM based on the company value.

Can I attend meetings and vote?All shares are voting shares giving the shareholder or their proxy the right to attend the annual general meetings and cast their votes.

If you have any other questions please e-mail them to [email protected]


To find out more please visit

www.angelsden.comwww.southbourneales.co.uk


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