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Wed 1st Apr 2020 - Update: Sandpiper, Chapel Down and bank loans
Sandpiper pulls out of Randalls deal: Investment company Sandpiper has pulled out of a deal to buy the Randalls Group of Guernsey because of coronavirus. Sandpiper’s board says the effects of covid-19 and the uncertainty for the future, mean the purchase cannot be completed for The Guernsey Pub Company, which is the holding group of Randalls. If the deal had gone through, it would have been the first major investment of Sandpiper since it was listed on The International Stock Exchange (ISE) at the end of May 2019. However Sandpiper’s directors say it has been unable to meet the final conditions to place shares to the Official List on the ISE, to allow it to buy The Guernsey Pub Company. They say notice has been given to the vendors to terminate the sale and purchase agreement from 1 April 2020.

Propel to launch video business interview series: Propel insights editor Mark Wingett is to begin a series of video interviews with senior business leaders talking about how they are navigating the current crisis. The first interview will be with Tortilla founder Brandon Stephens – and will be released later today. If you would like to take part in this series email paul.charity@propelinfo.com

Chapel Down reports substantial growth in supermarket and online sales: Chapel Down Group has reported it is well-placed to weather the crisis, given its strong assets, good management and a healthy cash position. The company stated: “The management team and board of Chapel Down have been focussed on delivering swift responses to a number of recent government announcements. Following the governments advice to close pubs, theatres and hospitality venues to contain the spread of the virus, we have seen our sales in supermarkets and off licenses grow substantially and our on-line sales multiply dramatically as customers seek to continue to enjoy our brands at home. It is too early to extrapolate any trends but if the current sales rate continued the off-trade sales and on-line growth of our wines would more than make up for the loss of on-trade wine sales. It will certainly leave us with a stronger business and an increased market share in these areas where we see long term growth. Sadly, we needed to close our tours, shop, restaurant and bar at the state of the art Curious Brewery in Ashford and our hospitality, shop and tours at our beautiful winery in Tenterden. Given that our beer and cider sales are largely focussed on the on-trade, in order to conserve our cash, we have taken the decision to stop brewing and close the brewery until the on-trade returns to normality. We have sufficient stocks / work in progress to trade through with bottled product to take home and online customers for up to 6 months. We are grateful for the support shown by the government in enabling us to furlough the staff directly affected by the change to the business. It will enable us to get back up to speed quickly when the all clear is given. The company has ensured that all furloughed staff are on 80% of their salaries/wages. Those still working will ensure we deliver to our off-trade customers and on-line consumers, will tend the vineyards and create the wines in the winery. We are ensuring that their safety is our first concern. We have moved staff to work from home wherever possible. The board, executive and senior managers in the company have all taken 20-40% salary cuts for the duration. The company has also taken significant steps to conserve cash and reduce spend across the business and has suspended all non-contracted capital expenditure with the exception of the committed development of the vineyards planted in 2018 and 2019. Following the above actions and based on prudent assumptions we have adequate cash for the foreseeable future.” Chief executive Frazer Thompson added: “These are challenging times, but we believe that the company is in a better position – strong in on-line and off-trade sales – than nearly all its competitors in English wine and craft beer. We have a good relationship with our bank HSBC, solid tangible assets and great brands. I believe we are in a very strong position to weather the crisis. Demand for our brands remains extremely healthy. We have taken swift and decisive action to ensure that the company is well placed for the aftermath and has the talent to compete immediately.”
 
20% of small and medium-sized firms face failure because the can’t access loans: Nearly a fifth of all small and medium-sized businesses in the UK are unlikely to get the cash they need to survive the next four weeks, in spite of unprecedented government support. That’s according to research published today, which suggests that between 800,000 and a million businesses nationwide may soon have to close. Many firms told the BBC that banks have refused them emergency loans. Others can’t get through on the phone or were told the money will take weeks. The banks say they are following the rules set out by the government. Chancellor Rishi Sunak said two weeks ago that businesses would be able to walk into bank branches and discuss Coronavirus Business Interruption loans of up to £5m to help them survive the shutdown. The promise from the chancellor was that “any good business in financial difficulty who needs access to cash to pay their rent, the salaries of their employees, pay suppliers, or purchase stock, will be able to access a government-backed loan, on attractive terms”. But with most bank branches closed, thousands of struggling firms can’t get through by phone or, when they do, are being told by banks they’re not eligible.

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