Adnams reports encouraging trading with beer & spirit sales strong

Brewer and pub operator, Adnams has reported news from its latest AGM, stating that underlying trading is encouraging with continuing strong growth in its sales of beers and spirits, notably Adnams Ghost Ship and Adnams Copper House Gin.

The compamy’s enlarged estate of managed inns has traded well so far this year, as have the shops and leased and tenanted pub estate.

The sale of some of Adnams’ smaller and less profitable pub outlets has meant some decline in overall profitability from this part of the business. Second half 2016 results were affected by the depreciation of Sterling and by lower turnover following the sale of its UK distribution rights for Lagunitas beers. These impacts have continued into 2017.

This year will one of substantial investment for Adnams. The Swan Hotel closed at the start of the year for a major renewal project which will see it transformed into a top-quality hotel celebrating the Adnams brand and its historic place in the center of Southwold.

Building works have been delayed by four months following the discovery of asbestos. Removal expenses have added about £0.5m to the project cost, but our previous estimate of the total cash cost of this project of £6m remains broadly correct. There will be an impact on 2017 profits, including the half year outturn, resulting from this important business being closed until the autumn.

Adnams second substantial 2017 investment is the £7m project in its brewery, which is now close to completion. This will extend capacity and provide the firm with beer conditioning, filtration, enhanced cooling and an automate kegging line.

Political uncertainties have become almost the norm in recent years and we are now approaching an unexpected general election. Nonetheless, Adnams has a firm commitment to the long-term and it will continue to invest on that basis.