Adnams losses widen as it overhauls systems

Suffolk brewer Adnams made a loss of £939,000 for the first six months of 2019, as it overhauled its 30-year-old core systems.

Turnover was down 2.4% year on year to £34.7m as the company concentrated on the substantial change and considerable investment.

The disruption caused bank debt to rise 11% to £21m, as Adnams increased stock levels to minimise potential disruption, also to mitigate against the potential impact of Brexit.

Higher debt levels raised interest costs 11% to £257,000.

Adnams said the overhaul had been a “major distraction”, with the complexity of the business making its needs “relatively onerous” – though this was now starting to ease.

Adnams grew its managed estate in 2019, with the Cross Keys, in Aldeburgh, moving from tenancy to management in April, bringing the estate to nine properties.

The Swan Hotel, which was completely refurbished during 2017, has increased turnover 11% on 2018.

However a fire at the Ship at Levington impacted results, coming after a period of closure for refurbishment.

The leased and tenanted estate has reduced in size in recent years and now comprises 38 properties.

There were no sales during the period, however the comparative period included profits from the King’s Head, Laxfield, the Lord Nelson, Ipswich and the Bridge House, London.

The first two were sold in 2018 and the lease on the latter expired just after the half year end last year.

Adnams said despite the smaller estate, results were close to those achieved in 2018.

Beer volumes were up 2%, against a wider market fall of 1%.

The company was “particular pleased” with the success of new low alcohol product, Ghost Ship 0.5%, launched a little over a year ago.

Gin volumes were down in the first half of 2019, as a boom in small distilleries has caused the market to fragment and spread over a greater range of products and producers.