Adnams hails 'year of investment' despite dip in profits
PUBLISHED: 10:03 23 March 2018 | UPDATED: 10:03 23 March 2018
Brewer, distiller and leisure retailer Adnams has reported a fall in annual profits following a year of significant investment, including a lengthy closure of the Swan Hotel in Southwold for refurbishment.
Turnover for the 12 months to December 31 grew by 6.4pc, from £70.265m in 2016 to £74.765, but underlying operating profit came in 45.1pc lower at £2.159m against £3.937m.
And bottom line pre-tax profits were 69pc down, at £1.549m against £5.020m in 2016, with last year’s total also affected by increased interest and pension charges.
Company chairman Jonathan Adnams said the fall in profit had been well flagged to shareholders in advance, including the impact of a delay in reopening the Swan due to the discovery of asbestos which was the biggest factor in one-off costs which reduced actual operating profit to £1.438m.
Investment across the Adnams business totalled £9.3m last year. Besides the work at the Swan, which reopened last October, this included the completion of a three-year investment in the brewery and the start of an IT systems upgrade which will continue until October.
Adnams’ beer volumes grew by 9.1pc, with continued diversification of its product range, and – as a result of investment in new equipment – this will continue in May with the launch of an alcohol-free version of its top-selling ale Ghost Ship.
Last year also saw another strong performance for the company’s distilling operation, with Copper House Gin now among the UK’s top 25 best selling gins,
Mr Adnams said the company was continuing to sell some smaller village pubs which, in the current market, it felt were better suited to individual or community ownership, such as the current talks in relation to the King’s Head at Laxfield.
On the retail side, the company’s shops remained a valuable outlet for Adnams products, he added, but the company was responding to the changing nature of the market by developing its online order business while moving its bricks and mortar presence more towards providing customer experience.
The board is recommending an unchanged final dividend of £1.50 per B-share to make a total for the year of £2.28, up 0.9pc from £2.26 for 2016.