Strong second half drives profit recovery for Adnams

By Luke Nicholls

- Last updated on GMT

Related tags: Beer, Whisky, Public house

Hope on the horizon: Jonathan Adnams believes economic circumstances are starting to look up after a number of years
Hope on the horizon: Jonathan Adnams believes economic circumstances are starting to look up after a number of years
Despite initially claiming it was ‘difficult to be too positive’ about pub trading conditions in 2013, Suffolk-based brewer, distiller and retailer Adnams reported a surge in pre-tax profits from £3.2m to £4.1m.

The Jonathan Adnams-led company saw turnover increase by 6.3 per cent to 60.5m, while the quantity of Adnams beer sold rose by 1.2 per cent. Operating profits were down, by 2 per cent to £3.3m, but Adnams managed to reduce the debt it owes by £3m to £10.8m.

“Despite a difficult start to 2013 due to adverse weather conditions and poor consumer confidence, we saw a much-improved second half to the year as the economy, and the weather, started to pick up,” said the chairman Adnams.

“2013 was a year of many achievements for Adnams, with the introduction of new beers, our first whiskies and a number of prestigious awards across all areas of the business. I am delighted to announce that Adnams Triple Grain Whisky and Adnams Single Malt both picked up medals at the World Spirits Awards in San Francisco earlier this week.

“2014 has started reasonably well for us and we believe that our long-term focus will help us to surmount the challenges that we will undoubtedly face.” 

Going concerns

The group sold four pubs in the year, which was followed by another pub shortly after the year-end. It also sold a former pub property more recently used as accommodation for its hotel staff.

Adnams added: “All the pubs that we have sold have been sold as going concerns, but we noted last year that there are inevitably some circumstances in which a pub is genuinely unviable and it would run counter to our values to encourage licensees to invest in a pub which offers no realistic chance of a profitable livelihood.”

Commenting on the group’s hotel business, Adnams said: “The market for regional hotels has been a difficult one and 2013 was another tough year for the Swan and Crown hotels in Southwold.

“The poor weather in the first half of the year was undoubtedly a contributing factor, but consumer trends in relation to hotel visits are also a challenge and the cost of such visits is a relatively easy saving in harder economic times.”

2014 outlook

Thi time last year, Adnams admitted that difficult pub trading conditions were continuing,​ making it difficult for the company to be 'too positive' about the future.

And, giving his outlook for the year ahead, Adnams concluded: "It is pleasing to see economic circumstances that are starting to look up after a number of years of squeezed living standards. I think, nonetheless, we need to temper that pleasure with caution regarding difficulties that may lie ahead and caution too regarding the specific challenges of the markets in which Adnams operates.

"The beer market, especially the free market in cask ale, and the pubs market have been particularly tough. It is perhaps notable in 2013 that we saw the greatest improvements from our more recent diversifications into shops and our distillery. 

"2014 has started reasonably well for us and we believe that our long-term focus will help us to surmount the challenges that we will undoubtedly face. I am very grateful for the continued support of our shareholders."

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