Problems at Allsopp

When Allsopp was converted into a public company im the late 19th century, the shares were eagerly snapped up by investors. Anticipating regular dividends and a steady increase in the value of the shares. This was based on the success of other brewery flotations, such as Guinness, Bass and William McEwan.

But just a few years later, the brewery issued more shares to raise more capital. This should have raised red flags. Why did they need fresh capital?

Messrs. Samuel Allsopp and Sons, Limited, have issued £550,000 4 per cent, mortgage debenture stock, being part of £1,100,000, at the price of £95 per £100 stock, the trustees being Sir Nevill Lubbock, K.C.M.G., and Mr. H. Hankey Dobree. This issue was decided upon in consequence of the rapid development of the business and the extra capital required. The money will be used to pay off certain temporary loans, chiefly in connection with the purchase of properties, making advances, acquiring plant for the lager beer brewery, etc. The stock is redeemable at the option of the company after 1906 on three months’ notice at the price of £110, and is subject to the existing. £1,100,000 4.5 per cent, and £1,100,000 3.5 per cent, debentore stocks, and in the event of voluntary liquidation is repayable at £110. A trust deed specifically secures by mortgage tho breweries and freehold, leasehold, and copyhold properties, and all other assets by a Boating charge. The issue forms part of £1,100,000, which may be increased to the extent of any diminution in the two prior debenture stocks, and of any increase in the capital subscribed and paid up. The assets on the 30th June last were £6,547,000 and on the 31st December had increased to seven millions, and the profits for 1898-9 had increased from £180,000 in 1893-4 to £305,894. The two debenture stocks absorb £88,000, and the present £1,100,000, when issued, £44,000, or together £132,000.
The Brewers' Journal vol. 36 1900, April 15th 1900, page 227.

The "purchase of properties" means buying tied houses. Allsopp were slow in joining the rush to buy pubs and ended up paying over the odds. Which is why they needed more capital. They also had that fancy Lager plant to pay for.

Another article from the same date presents a slightly more realistic appraisal of the company's prospects.

The Allsopp Position.
A circular was issued to the shareholders of Messrs. Samuel Allsopp and Sons, Limited, last month, stating that the directors deemed it desirable to make the following statement:—

With regard to the general trade of the company the directors see no. cause for dissatisfaction, as the sales for the six months ending December 31st, 1899, exceeded those of any corresponding period since the formation of the company. Since January 1st there has been a slight diminution in the sales, possibly attributable to the large number of men absent from the country, and to the cold and unfavourable spring.

The lager beer plant has proved a complete success, and the installation is being increased in order to meet the growing demand.

The recent debenture issue was entirely successful, the amount being over-applied for by the public.

The policy inaugurated some years since of acquiring licensed properties for the purpose of extending the business has not in the main proved unsatisfactory. The directors, however, regret to state that some recent purchases and investments have not proved as satisfactory as was anticipated. These purchases and their development necessarily entail a present burden upon the financial resources of the company, and it will require patience and careful handling before the expected benefits can be realised.

This matter is having the serious attention of the board.

In consequence of the resignation of the late chairman, the Hon. George Allsopp, M.P., has for the present kindly consented to undertake the duties of chairman.

Mr. W. T. Western, of Messrs. Woodhead and Co., Navy agents, has recently joined the board.
The Brewers' Journal vol. 36 1900, April 15th 1900, page 272. 

Sales were down, the blame being put on poor weather and the large number of young men absent in South Africa for the Boer War.

Not so sure about the unequivocal success of the Lager brewery. As just a few years later iy would be sitting unused in Burton. And was eventually moved to the Archibald Arrol brewery in Alloa.

The company admits that some of investments hadn't paid off. I assume this is principally overpriced and underperforming tied houses.

This was just the beginnings of the fall of Allsopp. Within in a decade they'd go bust and had to be rescued through a purchase by Ind Coope.