Adnams reports boost to profits

Suffolk brewer Adnams has reported an increase in turnover, profits and beer volumes in the first six months of the year.

The improvement in trading follows a 68 per cent fall in profits in 2008.

Figures for the start of this year show turnover is up 6.8 per cent and that operating profit has increased from £142,000 in 2008 to £922,000.

Jonathan Adnams, executive chairman, said: "I am pleased to be able to report a much improved performance from Adnams for the first six months of this year, following a difficult trading period throughout 2008.

"We reacted quickly to the economic downturn and having done so believe we are well placed for improved performance in 2009.

"Already this year we have shown support for our customers by holding Adnams beer prices for the remainder of 2009."

Performance had been helped by pubs trading better following a programme of tenant support last year and cost-cutting throughout the business.

However he added that while trading had seen a boost he had "some concerns going into 2010".

"We face VAT going back up which is in effect a 2.5 per cent price hike across all goods and we wait to see how consumers will respond to that. I suppose we can look forward to further hikes in duty and the possibility we might see bank rates start to creep back up.

"There's definitely challenges ahead however we feel we have positioned ourselves well."

Adnams has also boosted its estate by buying three riverside pubs in March - its first purchases in eight years - bringing the tenanted estate total to 74. Adnams said there are currently no plans to buy any more pubs but they would be "keeping their eyes open for opportunities."

Meanwhile he said pubs in its heartland had seen no real boost from people staying in the UK for holidays and that hotel rooms had been harder to fill.

He added the company has also been involved in a range of initiatives in its Suffolk heartland including partnerships with Newmarket Races and Ipswich Town Football Club.

In its interim statement for the six months to June it also reported that beer volumes were up 2.4 per cent against an industry wide decline of 2.8 per cent. The interim dividend is up 1.6 per cent.

Adnams added: "Adnams is a business that builds for the long term and whilst we will remain suitably cautious in the face of economic uncertainties we will also endeavor to seize opportunities when we see them."