Adnams profits to be lower
PUBLISHED: 13:11 01 July 2008 | UPDATED: 20:45 05 July 2010
Brewer Adnams yesterday warned that its half-yearly profits would be "substantially lower" than a year ago as the industry faced the "most difficult" trading conditions for years.
Brewer Adnams yesterday warned that its half-yearly profits would be “substantially lower” than a year ago as the industry faced the “most difficult” trading conditions for years.
The Southwold-based business warned of “challenging and uncertain” times ahead at its annual general meeting in April - but yesterday revealed it expected a fall in half-yearly and annual operating profits for 2008 compared to the £1.2m half year and £4.2m annual profits declared the year before.
Adnams said it was now “reviewing its investment plans”, having announced in April that it hoped to increase its sales workforce and open new stores.
But in a statement, the company added it was still “committed to investing in the business to support long-term growth”.
“Since the end of April trading conditions, particularly in the UK on-trade, have deteriorated significantly,” Adnams said.
“Reports indicate that four pubs are closing every day.”
Adnams, which sells 93pc of its beer to other pub companies, said ale volumes had fallen 8.3pc in the five months to May as the firm faced faltering consumer confidence, higher costs, the impact of the smoking ban and “penal” rises in alcohol duty.
But Adnams also said sales in more than 500 Tesco stores since April of its carbon- neutral beer, East Green, had been “very pleasing”.
Adnams has 80 pubs and two hotels and it said the performance of its estate had been “resilient” despite the economic climate. But the five Cellar & Kitchen stores opened last year - including three last November - are not yet profitable.
“The board believes that Adnams is well positioned to withstand the present downturn and our confidence in the future remains strong, though current trading conditions are undoubtedly the most difficult in recent years - and may well get worse before the market recovers,” the company said.
“The strength of our brand, our innovations, our investments and our unique environmental positioning give us a sound base to achieve sustainable growth in the long term.”