Small firms with an offer of liquid investment

WHEN the Business Expansion Scheme was first launched by the Thatcher government, it was designed to help small businesses raise funds, writes Neasa MacErlean. Nowadays the banks and the building societies - hardly small businesses - dominate the BES market. But there are still a handful of entrepreneurs who use the BES regime for the purposes originally intended.

The Black Sheep Brewery is planning to raise pounds 750,000 to provide working capital and to buy and install brewing equipment, having become a supplier to Marks & Spencer.

The brewery raised BES funds last year, but is expecting its initial results to be worse than first predicted. Plant installation costs have been higher than expected and delays in the installation have had 'an adverse impact on results', according to the prospectus.

But the managing director, Paul Theakston of the Theakston brewing dynasty, predicts a better future and a doubling of capacity by the end of the year.

Wickham Vineyards is, according to its current owner, the first offer of shares in a vineyard to the public. It is also aiming to raise pounds 750,000. 'It has been brought about by huge Lloyd's losses for me,' said John Charnley, the owner, who will become managing director of the BES company. 'It allows us to stay here and to continue wine-making for the next five years.'

Mr Charnley and his wife Caroline have been running the vineyard for eight years. Last year they had their first full crop. Their early products have already won prizes. The 1990 Wickham Medium Dry, for example, won a bronze medal in the 1991 International Wine Challenge.

Mr Charnley believes that the vineyard will generate substantial profits over the next few years. 'We hope that people will be doubling their money, but certainly it could be better than that,' he said.

The BES company will buy the vineyard itself, the plant and machinery and the wine stocks. Some funds will also be used to build bonded stores and a wine bar and catering facilities for tourists.

Shareholders will be given discounts on the wine, with their own personalised bottle labels if they want them. They will also be invited for lunches at the vineyard and their views will be sought about the running of the business.

The Black Sheep prospectus is available from the sponsor, Wise Speke, on 061-953 9700. The Wickham Vineyard prospectus is available from the sponsor, Neilson Cobbold, on 0703 330130.

(Photograph omitted)