City news
Adnams turnover down 3% but profits up
The company said turnover was down 3% to £29.1m with a 12% increase in operating profit to £962,000.
The company sold three pubs in the period. It has sold a further two since the half year and has another three on the market.
It said with the move of two of its key outlets, the White Horse Blakeney, and the Ship Levington, to managed houses and its shorter term management of some smaller tenancies it was treating its property business as “an integrated whole where pubs and hotels may move between tenancy or leasehold or our own management as circumstances require”.
It said changing consumer tastes and increased competition in the beer market had proved challenging for classic beers such as Adnams bitter, however it had created opportunities for other products.
It said the rapid rise of Adnams Ghost Ship supported this view. The company is pushing ahead with a £7m investment in the brewery to add capacity and flexibility.
The company said: “Market data suggests that in the first six months of this year beer volumes have declined, by 3.6%, and the cask ale market has grown by 0.5%. Our volumes were behind this, however we have noted in previous reports that large managed house operators have become more important both to us and to the market as a whole. This creates some inevitable volatility in our volumes as these businesses rotate their offer.”
Adnams said it spirits business had continued its strong growth with the distillery reaching capacity. There will be a £500,000 investment to double the capacity.
On its pubs business, it said: ”The Managed Inns part of this business, comprising the Swan and Crown in Southwold together with the White Horse and the Ship saw substantial investment in the first half of this year. Both the Swan and the White Horse were closed for several weeks whilst refurbishments took place. This had some inevitable impacts on trading, however we believe that we will start to see the returns from the investments coming through in the second half of the year. The leased and tenanted part of the business has seen the impact of having fewer pubs as we have sold a number of smaller outlets in recent years, however underlying trading has been good with like-for-like results ahead of last year and an overall result similar to a year ago.”
The three pubs sold in the first half of this year were: The Bull at Cavendish, the Fleece at Bungay and the Queen’s Head at Long Stratton. Since the half year Adnams has sold the Ship at Burnham and the Cock at Clare and has three further pubs on the market.
On its shops business, Adnams said: “Our shops have continued their recent trend of improved trading with like-for-like revenue growth well ahead of the high street average. These shops are an integral part of the Adnams proposition. They have been instrumental in portraying our brand to a wider audience, particularly a female audience less familiar with Adnams. They have also helped us to launch new products and have been notably important in assisting the early growth of our spirits business.
“We saw no new openings or closures in this half year however we will open a new shop in Bury St Edmunds in the second half. Our online shop continues its growth and we are investing in our proposition to significantly improve the customer experience and further grow this increasingly important channel.”
On the future, the company said: “The underlying trends within our business have mainly been positive. Our newer beers have grown well in a fickle market and our spirits have continued their strong growth. We are making substantial investments in both our brewery and distillery to secure capacity and flexibility for the future. Our continuing pub estate has traded well and has maintained profitability despite its smaller size, and our managed properties have received investment to secure their trading. Our retail business has had a strong six months and is looking at further expansion and at continuing investment in its online presence.”
 | This story was first published by M&C Allegra Foodservice, eating and drinking out market insight. |
