Saturday, 28 April 2012

McLennan & Urquhart goes public

Prospectuses. What wonderful sources of information they are. Though, bearing Pattison's in my mind, it's unwise to trust everything in them as gospel.

This is one of the more modest flotation, the share capital amounting to just £52,000. That reflects the size of the brewery, which was nothing like as large as McEwan or even Aitken.

A couple of other things are odd about this launch. The date is one. 1889 is pretty early for a Scottish brewery flotation. Especially for such a small brewery. Most took place in the period 1895 to 1900.

Then there's the matter of exactly who was selling the brewery to the shareholders. Usually it was the partners in the private company. But this time they had already sold the company to a third party. It was he who was selling shares in the new limited company. McLennan and Urquhart had been attempting to offload the brewery for a while, as we will discover later.

Time for all the legalese:
"The SURSCRIPTION LIST for the undermentioned Capital will be OPENED on MONDAY, the 14th day of October, and will be CLOSED on or before WEDNESDAY, the 16th day of October, 1889.

The COMMERCIAL BANK OF SCOTLAND (Limited), Edinburgh, London. and all its Branches, are authorised to RECEIVE APPLICATIONS for the undermentioned Share Capital.

MCLENNAN AND URQUHART (Limited), DALKEITH BREWERY, EDINBURGH, the Brewery having been established over Fifty Years.

Incorporated under the Companies Acts, 1862 to 1886, whereby the liability of each Shareholder is limited to the amount of his Shares.

2,600 Five per Cent. Cumulative Preference Shares of £10 each        £26.000
2,600 Ordinary Shares of £10 each .......                 26,000
In all .......                                £52,000

500 of the Ordinary and 300 of the Preference Shares have been applied for by the Directors and their friends, and will be allotted in full.

The Shares are payable as follows:- £1 on Application, £4 on Allotment, £2 10s. on the 1st of December next, and the balance of £2 10s. per Share on the 1st of January, 1890; but Shareholders will have the option of paying up their Shares is full on Allotment, and interest will be allowed in advance of the call at the rate of 5 per cent. per annum.

Messrs. A. McLennan and W. Urquhart have agreed to lend £10,000 at 5 per cent. on the security of the Heritable Property for a period of 5 years.

WILLIAM URQUHART, Esq., Dalkeith Brewery, Dalkeith N. B., Chairman.
James McLennan, Esq., Dalkeith Brewery, Dalkeith N. B.,
James Mackintosh Gow, Esq.. Banker, 66, George. street, Edinburgh.
* Alfred H. Beal, Esq. (Messrs. Beal, Son, and Chartres) 20. Regent-street, London.
* Will join the Board after Allotment.

BANKERS.- The Commercial Bank of Scotland (Limited). Edinburgh, London, and all Branches.
SOLICITORS. Messrs. Menzies, Bruce-Low and Thomson, W. S., 16, Duke-street, Edinburgh.

Messrs H. Gilmour and Shaw, 18 St. Ansdrew's- square, Edinburgh.
Messrs. Oliver and Verity, 17, St. Ann's-square, Manchester.
Messrs. Lightbody and Forsyth, 35, Throgmorton. street. London.

AUDITORS.-Messrs. F. and F. W. Carter, CA., Edinburgh.
SECRETARY (frs tem.).-Mr. William Thomson W.S., 16 Duke-street, Edinburgh.
REGISTERED OFFICES,-The Brewery, Dalkeith.

The Company has been formed to purchase, carry on, and extend the old-established Brewery business of Messrs McLennan and Urquhart, at the Dalkeith Brewery, Edinburgh, which has been acquired from them by Mr. Alfred H. Beal, of London.

The partners of the late firm have subscribed for such a number of Shares as will give them a substantial interest in the business, and Mr. Urquhart has agreed to take the position of Chairman on the board of Directors for a period of five years, upon terms highly favourable to the Company. Mr. J. McLennan, the junior partner, who has been actively engaged in the management of the Brewery, will remain as Manager for a minimum period of five years, with a seat on the Board.

The business has been established for over 50 years, and commands a high reputation for its ales, and by the medium of a joint Stock Company with increased capital it is expected the trade can be largely extended.

The Property to be taken over by the Company is as follows:-

(1.) The Freehold Brewery, together with Cooperage, Coopers' Store, Cask Stores, Stabling, Stores, General and Private Offices, Chief Clerk's Residence, &c,
(2.) The Brewery Plant, Machinery, Horses, Drays, Carts, Casks, and Utensils of Trade.
(3.) The Freehold Malting, adjoining the Brewery, of 70 quarter capacity, Beer Stores, and Cask Yard.
(4.) The Goodwill of the Business.
(5.) Two Freehold Blocks of Dwelling Houses,
(6.) The Freehold "Railway tavern" Public House, adjoining the Brewery.
(7.) The loans to customers, &c., as they stand in the books of Messrs McLennan and Urquhart, on the 1st October, 1889.
(8.) The stock-in-trade of Beer, Malt, Hops, and other stock of any description, of the value of £4,220 1s. 11d., on the 1st of October, 1889.

The book debts due up to the 1st day of October, 1889, will be collected by the Company and handed to Messrs. McLennan and Urquhart, as received.

The following is a copy of the certificate of Messrs. F. and F. W. Carter, Chartered Accountants, of 6, St, Andrew-square, Edinburgh, and Messrs. Lees and Graham, of King-street, Manchester, Chartered Accountants:-

We have examined the books of Messrs. McLennan and Urquhart, of the Dalkeith Brewery, for the four years ending 1st of April, 1889, and certify that the net profits of the business during that period have amounted to the sum of £23076 6s. 6d., or an average of £5,768 16s. 7d. per annum.

This result is arrived at after making ample provision for bad and doubtful debts, discounts, &c, and writing off a sufficient amount for depreciation of plant and buildings.
F. and F. W. CARTER, C.A.
Edinburgh, Sept. 12 1889.

Taking the above profits as the minimum likely to be maintained, it shows £5,765 per annum, available as follows:-

To the payment of 5 per cent. interest on Mortgage        £500
To the payment of 5 per cent. on Preference Shares         1,300
To the payment of 10 per cent. on Ordinary Shares        2,600

Leaving a balance of about £1,368 a year for Manager's salary, Directors' fees, &c., which, in the opinion of the Directors, is in excess of what will be required.

Prospectuses and Forms of Application can be obtained at the Offices of the Company, or at the Offices of the Bankers, Brokers, Solicitors, and Auditors."
October 9th, 1889.
Pall Mall Gazette - Monday 14 October 1889, page 8.

Generous as ever, I've thrown in a contemporary map of the brewery. It even shows the Railway Tavern. You can also see just how small the brewery was.

£5,768 sounds a pretty decent profit for a company that only cost £52,000 to buy. That's more than a 10% return. I wonder why the partners had been so keen to sell? What's weird is that, through the shares they were took, they were buying back part of the brewery. I'm confused. The partners had also promised, as is usual in these sales, to stay on for a certain number of years after the flotation.

Who was the mysterious Mr. Beal? He doesn't seem to have taken a very active role in the brewery he owned. Maybe that's why he was quick to turn it into a limited company. Of course, if he really was based in London, it wouldn't be very easy to be involved in the day to day running of the brewery.

Next time I'll be revealing the abortive sale that preceded Mr. Beal's purchase. Through the medium of - what else? - a court case.

1 comment:

Barm said...

The Railway Tavern doesn't appear to be anywehre near the railway.