TIDMADB
RNS Number : 8453B
Adnams PLC
07 June 2023
Adnams plc Results for the 12 Months to 31 December 2022
Adnams, the brewer, distiller and retailer has today published
its Report & Accounts for the 12 months to 31 December 2022,
showing sales of GBP64.2m and a GBP1.2m operating loss.
Commenting on 2022, Jonathan Adnams OBE, Chairman said: "In the
early months of 2022 the beer market began its journey back to
health, and customers were clearly pleased to be visiting pubs and
bars again throughout our heartland and London. Our retail shops,
hotels and pubs enjoyed a good beginning to the year, enabling the
payment of an interim dividend."
The Adnams Report & Accounts headlines include:
-- Sales grew from 2020 to GBP64.2m
-- Beer volumes grew 2.7% on 2021
-- Net bank debt GBP13.9m
-- Positive EBITDA of GBP2.7m
-- 2022 interim dividend
Revenues were up GBP7m from 2021, which benefitted from buoyant
trading in the early months of the year, but would have been higher
had demand not suffered as consumer confidence fell away. This,
coupled with the impact of the war in Ukraine and rising inflation
put significant pressure on our underlying cost base, requiring the
business to manage cashflows tightly. The resultant EBITDA of
GBP2.7m is evidence of our ability to continuously strive to make
efficiencies in our processes and harness our IT systems
technology.
We won a number of awards in the year, including:
-- Worlds Whiskies Awards: Icon Award for Rye Whisky, Silver for
Single Malt Whisky and Category winner for Rye Malt Whisky
-- IWSC Gin and Spirit Awards: Bronze for both Copper House Gin and First Rate Gin
-- Siba Independent Regional Beer: Gold for Dry Hopped Lager
Our 150(th) celebrations gave the opportunity to bring back
Spindrift, following a public vote, develop a hazy pale ale called
Sea Fog and produce a limited release barrel-aged beer called
'150'. We also celebrated Broadside's 50(th) birthday, an ale
entwined in our heritage and location at Sole Bay.
Ghost Ship in both 4.5% and 0.5% formats continued as the
company's best-selling beer and Copper House Dry Gin remained its
best-selling spirit.
Chairmans Statement (from accounts released on 07 June 2023)
As I prepared this report one year ago, I talked with some hope
that the two years of pandemic were behind us and that the world
for brewing, distilling and hospitality would enjoy a period of
stability as markets returned to some normality and businesses in
our sector would be able to rebuild their balance sheets. I wrote
those words before the Russian invasion of Ukraine and all the
implications this has brought to economies around the world with
the widely reported knock-on effects for global energy and
commodity prices. The UK economy was far from immune and has been
profoundly impacted. This, along with the instability brought about
by the autumn mini-budget, rising interest rates and industrial
unrest, has led to consumer confidence levels being at their lowest
for decades. It is no overstatement to suggest that, for the
company and the wider brewing and hospitality sector, the business
environment has been at least as challenging as during the Covid-19
pandemic. In the final nine months of 2022, the business has had to
absorb a GBP4.9m increase to its costs base driven by rising
prices. The business has worked extremely hard during the year to
mitigate inflation, control expenses, manage cash flows and serve
customers well. However, it has had no alternative other than to
pass most of the increased costs through to customers.
The challenge for Adnams and the sector as a whole is to ensure
that the increased costs of going out are met with an experience
that the customer values and feels compelled to repeat even during
a cost-of-living crisis. Our response has been, through our data,
to know our customer better, to maintain quality in all that we do,
and to seek to exceed their expectations. Related to this, as the
company emerged from the pandemic, it needed to catch up on a
property maintenance deficit and this has been the principal driver
behind borrowing increasing by GBP2.9m to GBP13.9m as we invested
in the long-term fabric of our buildings. It is against this
backdrop and given continued uncertainty in the UK economy that the
company is unable to recommend a final dividend this year. The
Board keeps this matter under regular review and wishes to return
to its regular pattern of paying dividends as soon as
practicable.
During the year the business was able to rebuild sales to
GBP64.2m and has generated an EBITDA, a proxy for cash flow, of
GBP2.7m. When depreciation and interest are added, this leads to an
operating loss of GBP1.2m (2021: GBP0.9m). In the early months of
2022, there were certainly signs of recovery as the beer market
began its journey back to health, following a 55% fall in the
previous two years, and customers were clearly pleased to be
visiting pubs and bars again throughout our heartland and London.
Our retail shops, hotels and pubs also enjoyed a good beginning to
the year and we were able to pay an interim dividend in February of
156p per 'B' share and 39p per 'A' share reflecting strong trading
in the summer of 2021 and the good start to 2022. By mid-year the
impact of the conflict in Ukraine and its implications for the UK
economy were being felt and this led to the beer market beginning
to plateau and customer sentiment begin to move from a broadly
positive stance to concerns about inflation and the cost of living.
The long warm summer offset this to a certain extent and bookings
in our well-located hotels, pubs and restaurants remained strong
through this period. As we moved from summer to autumn, the mood
began to change as the nation mourned the passing of the Queen and
the mini-budget hit consumer confidence hard.
Throughout all of this, the low and no alcohol sector has been
enjoying continual growth and our Ghost Ship 0.5% beer has become
the best-selling Lo/No Ale in the on-trade and, alongside its
full-strength sibling Ghost Ship, it continues to secure further
distribution in both the on- and off-trade. We also won some awards
in the year, which are a useful external validation of our product
quality. The World Whiskies Awards 2022 saw Adnams Rye Malt Whisky
win an 'Icon' award and be inducted into the Whisky Hall of Fame,
the International Wine & Spirit Competition (IWSC) gave awards
to our Copper House Gin and First Rate Gin, Dry Hopped Lager won a
Society of Independent Brewers (SIBA) Gold award and was supported
by Silver awards for Adnams New England IPA and Innovation and
Bronze awards for Mosaic Pale Ale and Kobold English Lager. The
quality and distinctiveness of our products will always remain a
priority of ours.
The autumn also saw us celebrate the 150th anniversary of
Adnams. We were joined over two days by suppliers, local
dignitaries and the wider Adnams team to celebrate all the company
has achieved. Across the two days, I was able to present both the
long heritage of Adnams and talk of the more contemporary things we
have done with our award-winning products and our approach to wider
societal work through the Adnams Community Trust (ACT) and our
commitment to environmental sustainability. We also produced a
suite of beer products to mark the occasion, bringing back
Spindrift following a public vote, undertaking a collaboration brew
with Sierra Nevada called Eastern Edge, encouraging one of our
young brewers to develop a hazy pale ale called Sea Fog and,
finally, producing a limited release barrel-aged beer called '150'.
The year also saw Broadside celebrate its 50th birthday. Once
described by a customer as 'fruitcake in a glass', this classic
dark bitter remains a firm favourite with customers in cask format
and in bottle as Broadside, Strong Original. The name is derived
from naval guns firing a 'Broadside' during the battle of Sole Bay
in June 1672. To mark the company's 150th and Broadside's 50th - I
was delighted to receive the gift of a new pub sign for the Sole
Bay Inn, Southwold. This beautiful work of art depicting the battle
was hand-painted by Dave Barber and replaces a sign produced by his
father. Three generations of Barbers have contributed so much to
Adnams over the years and embody the long-term, mutually beneficial
relationships the company builds. This latest example of the
signwriter's craft can be seen hanging proudly outside the Sole Bay
Inn for all to see. The period of celebration culminated in
December with the Lord Lieutenant presenting the company with its
third Queen's Award for Sustainable Development.
The outside world remains uncertain and volatile. Early in the
year, we had looked forward to our markets returning to normal post
pandemic. The start to the year promised this, then global events
transpired and has led to the UK and the rest of the world facing
many challenges from economic, social and environmental
perspectives. Our response is that we continue to pursue our
long-term strategy of building a premium beer, spirits and
hospitality brand that attracts and grows its loyal customer base.
We do this by continuing to invest in the fabric of our hotels,
pubs, shops and online businesses, by exceeding customers,
expectations in terms of service and product quality, and by using
our data to better target offers towards customers to reward their
loyalty. Simultaneously, we are digitally transforming our back
office for better efficiency and effectiveness. Relationships in
our supply chain remain strong and we remain committed to operating
with care for the natural, built and social environment and to
doing the right thing.
The pandemic slowed down our Board succession plan as we opted
for continuity and experience, as our industry endured the impact
of the prolonged closure of large parts of the business. Having
come through this period of uncertainty, I am able to announce a
number of Board changes in accordance with good corporate
governance.
First, I would like to express my gratitude to Bridget McIntyre
who retired as a non-executive director of Adnams on the 31
December 2022. During her nine-year tenure, Bridget has brought
wise counsel and considerable expertise to the Board. Bridget will
continue her role as Chair of the Adnams Pension Trustees and I
thank her for her contribution to the company over the years.
Bridget has been succeeded by Simon Townsend. Simon was most
recently CEO of Ei Group plc, the FTSE-listed owner and operator of
4,000 pubs across England and Wales. Simon also served as a
non-executive director of Countryside Properties from March 2019 to
November 2022 and is a non-executive director of private equity
owned Cote Restaurants and senior adviser at global consultancy
Teneo. He is also a member of the advisory board of diversity and
inclusion organisation WiHTL.
Nicky Dulieu also intends to retire as a non-executive director
at the company's Annual General Meeting and having been in office
for over nine years will not be offering herself for reappointment.
Again, I thank Nicky for her nine years of service to the company,
and her expertise and counsel has been invaluable during that
time.
Nicky will be succeeded by Sacha Berendji. Sacha is a qualified
accountant and has extensive experience in the UK retail
industry.
Sacha joined Marks & Spencer in 1994 through their graduate
recruitment scheme and has held a number of senior roles in the
company and is currently their Operations Director, responsible for
their stores, property and store development. Sacha has joined the
Board as a non-executive director, and will chair our audit
committee.
Having been appointed by the Board during the year, both Simon
and Sacha will resign at the company's Annual General Meeting and
offer themselves for reappointment, in accordance with the
company's articles of association.
Finally, Guy Heald intends to retire as a non-executive director
of the company at the company's Annual General Meeting this year.
Guy joined the Board in April 2015 and is a long-term supporter of
the company. His family has been involved with Adnams since its
very early days and is a major shareholder. Guy has suggested that
he be succeeded by his son, Andrew Heald, and the Board has agreed
to this seeing it as the natural succession of a major stakeholder
in the company.
Finally, it just leaves me to say that I am grateful to the
whole Adnams team and to our loyal shareholder base in supporting
the company through these uncertain and challenging times.
Dr Jonathan Adnams OBE
Chairman
Adnams plc profit and loss account
For the year ended 31 December
2022 2021
GBP000 GBP000
--------- ---------
Turnover 64,215 57,368
--------- ---------
Other operating income 62 1,938
--------- ---------
Operating expenses (65,504) (60,204)
--------- ---------
Operating loss (1,227) (898)
--------- ---------
Gain/(loss) on disposal of assets 2 (4)
--------- ---------
Loss on financial instruments at fair value (212) -
--------- ---------
Loss before interest and taxation (1,225) (902)
--------- ---------
Interest payable (759) (352)
--------- ---------
Other finance charge on pension scheme (89) (134)
--------- ---------
Loss before taxation (2,285) (1,388)
--------- ---------
Tax on loss on ordinary activities 757 (254)
--------- ---------
Loss (1,528) (1,642)
--------- ---------
Earnings per share basic and diluted
--------- ---------
'A' Shares of 25p each (81.0)p (87.1)p
--------- ---------
'B' Shares of GBP1 each (323.8)p (348.3)p
--------- ---------
Balance sheet
As at 31 December
2022 2021
GBP000 GBP000
--------- ---------
Intangible assets 1,939 2,054
--------- ---------
Tangible fixed assets 34,900 36,859
--------- ---------
36,839 38,913
--------- ---------
Current assets
--------- ---------
Stocks 10,615 9,779
--------- ---------
Debtors 5,171 4,202
--------- ---------
Cash at bank and in hand 693 1
--------- ---------
16,495 13,982
--------- ---------
Creditors: amounts falling due within one
year (16,288) (13,439)
--------- ---------
Net current assets 207 543
--------- ---------
Total assets less current liabilities 37,046 39,456
--------- ---------
Creditors: amounts falling due after more
than one year (10,180) (9,867)
--------- ---------
Derivative financial instruments falling due
after more than one year (228) -
--------- ---------
Provision for liabilities (1,106) (623)
--------- ---------
(11,514) (10,490)
--------- ---------
Net assets excluding pension liability 25,532 28,966
--------- ---------
Pension liability - (4,988)
--------- ---------
Net assets including pension liability 25,532 23,978
--------- ---------
Capital and reserves
--------- ---------
Called-up share capital 472 472
--------- ---------
Share premium 144 144
--------- ---------
Profit and loss account 24,916 23,362
--------- ---------
Equity shareholders' funds 25,532 23,978
--------- ---------
The Directors have not recommended a final dividend for the
financial year ending 31 December 2022.
The information contained in the above profit and loss account
and balance sheet has been extracted from the audited accounts of
Adnams PLC for the year ended 31 December 2022. The statement
preceding the profit and loss account is unaudited.
A trading update will be released on 30(th) June 2023.
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END
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