Adnams doubles operating profit
Suffolk brewer and pub operator Adnams has doubled its operating profit and increased turnover by 9%, following a difficult 2008.
Adnams reported sales of £51.3m for the 12 months to 31 December with operating profit up to £3.2m. Adnams beer volumes rose 4% against a static market with off trade sales up 22%.
Its Cellar & Kitchen stores had a much stronger year and recovered to break-even in 2009.
"2008 was a difficult year for Adnams, but some of the investments that we made and the tough decisions that we took that year are bearing fruit in an improved performance," said executive chairman Jonathan Adnams. "This revival was realised against a backdrop of considerable economic uncertainty."
Adnams helped its tied tenants and customers during the year by freezing beer prices — a move it has stuck with for 2010. Its beer business "thrived" and generated an operating profit of £1.8m — up from £472,000 in 2008.
It said it had been able to take advantage of the "torrid" time larger pub companies had been having to buy three riverside pubs in March.
The family brewer said it believed its tenants were content with the beer tie. "The pub companies have also come under considerable political pressure led by the Business and Enterprise Committee's report, which focussed on the relationship between pub owners and tenants," said Adnams.
"This relationship is key to all owners of tenanted estates, including Adnams. We have surveyed the views of our tenants and were pleased to find strong support, reflecting the long-term relationships that we have always sought to develop.
"Nonetheless, with the many pressures on UK pubs we will be continuing to focus on these vital relationships."
But Adnams warned 2010 looks like a "very uncertain year". He said: "2010 started very unhelpfully with colder weather and more snow than we have seen for some years. This has set us back a little at the start of what looks like a very uncertain year.
"There will be a general election and there is a clear expectation of tax increases. A cautious note has to be sounded, but it should be reiterated that Adnams is a company that looks to the long term."
