Adnams has provided a half-year report for H1 2023, with sales in the first half of the year level with 2022 at £30m.
The brewer, distiller, and pub operator further reported it has seen input costs continue to climb, contributing to the widening of operating losses to £2.4m.
The two quarters were different in composition; with Q1 ‘subdued’ and seeing inflation at its peak, while Q2 saw a ‘marked improvement’ due to lighter evenings and warmer weather.
Hotels and pubs have traded well in terms of room occupancy, although lower footfall in key coastal locations has meant walk-in food and beverage sales have been impacted.
The ‘unwinding of the staycation phenomenon’ has also been a factor in footfall levels in key locations.
Sales of beer to pubs outside of Adnams’ own estate have also been challenging, with many rural pubs remaining closed in the early part of the week.
Sales volumes to supermarkets have therefore become a greater proportion of output, with lead products such as Ghost Ship 4.5% and its low-alcohol counterpart Ghost Ship 0.5% benefitting from increased distribution.
Cash flow remains consistent and in line with expectations, according to the company.
In March, Adnams reduced its debt position by £0.5m as part of its banking arrangements. The facility stands at £19.5m comprising of a £10m term loan, £6.5m RCF and £3m overdraft.
Early in the year, a cost reduction exercise led to some redundancies and changes to production operation.
This initiative is delivering ahead of plan, according to the update, as Adnams looks forward to its key trading period.
Earlier this summer, the company announced Dr Andy Wood OBE DL will step down as CEO at the end of 2024.
A succession process, led by senior non-executive director Steven Sharp, will consider both internal and external candidates, with a further announcement to be made when appropriate.
Chairman Dr Jonathan Adnams OBE commented: “Although trading conditions continue to be uncertain. We are encouraged by the growth in new on-trade customer numbers, new listings in the off-trade and the performance of Ghost Ship 0.5%. Finally, our recent customer research gave an indication of a younger cohort of consumers discovering Adnams.”
