Adnams, the Suffolk brewer, distiller and pub operator, has reported a 15% rise in profit pub, while turnover climbed to £54.6m (2010: £50.9m) for the year to the end of 2011.
Operating profit climbed by 2.8% to £3.27m during the year, while like-for-like sales increased 13% across its shops. Pre-tax profit for the year stood at £1.3m (2010: £2.8m), after the group incurred an exceptional charge of £1.7m during the year.
The group said that in line with the harsh economic conditions it has toughened the criteria that its uses to assess when its assets should be written down in value. It said it had moved to look at each pub and each store as a separate entity and not as part of a group.
It said that this change in approach has in part driven the exceptional charge in this year's accounts, with £900k of the £1.7m charge arising from impairment provisions and £800k from closure costs.
The group said that its pub estate benefited from “good consistent trading”. It said that despite having a slightly lower average number of pubs, beer barrelage grew in 2011, with its own beers being particularly strong. In September, the group acquired the White Horse at Blakeney, a coastal pub with rooms and an excellent reputation for food.
The company said it saw “very strong year-on-year sales growth” within its shops, which it described as “a good performance in a very difficult retail market”.
It carried out a review of its Cellar & Kitchen store estate during the year, finding that some locations traded better than others. This has led to some relocations and closures, while it also opened three new stores, two of which were in London. The change in terms of openings and closures in the division led to extra cost during the year.
Adnams said that it hotels business started the year well, but trading conditions toughened notably from May onwards. It said it suspected that reduced hotel visits have been a way “in which some have been able to tighten their belts”.
The group said: “It may also be the case that the typical clientele of the Adnams hotels has been disproportionate losers from the UK's monetary policy. Whilst very low interest rates help borrowers, they have the opposite impact on savers and will inevitably have meant that some have needed to cut-back their spending.”
The company brewed 7% more Adnams beer in 2011 than in 2010. It said that biggest driver of it beer business success in 2011 was the market for drinking at home. Having had a tough 2010, this business made a “major move forward in 2011” and 0ver 20% of the company’s beer is now sold in bottles, cans and mini-casks.
The group said that its distillery, which opened towards the end of 2010, had a “very promising” first year of operation. It said: “As a new business, the volumes sold have inevitably been small, but they exceeded our expectations and we are looking for strong and continued growth over the next few years, with some exciting new product launches.”
On the back of the results, the group proposed an increase in its dividend for 2011. The final dividend will be £1.25 per 'B' share, a 2.5% increase.
Jonathan Adnams, chairman, said: “For many years Adnams has championed the importance of taking a long-term view. We firmly believe that it is by taking a values-based approach to business, building trust and loyalty with our customers, employees and shareholders that we carve a path to sustainable business success. By investing for the long-term, we have been able to make reductions in our carbon emissions and it is this approach that has contributed to our being able to hold Adnams beer prices for the 4th consecutive year.
“Despite sounding a note of caution about economic uncertainty, our response to the current conditions is to keep an eye on costs, but we will not be distracted from our long-term goals and will continue to invest for the future.”
