Sales of Adnams' beers rose by 12% in 2003, as the company's total turnover increased by 14% to £42.1m. However, operating costs at the Suffolk-based brewer rose faster, at 14.4%, as operating profit before exceptionals rose 9.3% to £3.5m, while pre-tax profit dropped 3.4% to £3.35m. Operating margins dipped 0.4 percentage points to 8.3%, while the pre-tax profit margin, after an 11.2% rise in net interest payable to £209,000, fell 1.4 percentage points to 7.9%. On the positive side, company chairman Simon Loftus told investors, Adnams won top national honours for our beer, for customer service and for social impact, taking the first ever award for Small Company of the Year from Business in the Community. "To win this award we had to prove the highest standards of social responsibility in action, including the development and motivation of our people, the quality of the goods and services that we supply, our environmental impact and our relationships with suppliers, customers and the community," Loftus said. "Much of my time during the past year has been spent working with the teams to focus our environmental and social policies on clear, communicable objectives, delivering measurable business benefits. In some areas this is relatively straightforward: increased levels of employee pride and motivation clearly lead to better performance, better staff retention and lower recruitment costs; environmental initiatives targeted at energy savings also result in lower costs and enhanced efficiencies. "Other measurements have proved more challenging. But it has been worth spending time on these matters because we are now in a better position than ever before to prove that strong values, consistently applied, support sustainable business success. "Such an approach will increasingly differentiate the great companies from the also-rans, in an age when corporate trust is hard to win." Loftus said Adnams will soon start work on the final phase of its new fermenting room at the Southwold brewery, adding another seven fermenting vessels to the 12 already installed. In addition, by the spring of next year the company will have started work on the construction of its new logistics depot, in a disused gravel pit just outside Southwold. "This long-planned scheme will embody new standards of environmental excellence in its design and operation and will allow us to plan for future growth with the confidence that we can deliver," Loftus said.