Brewer Adnams Back on Road to Recovery

(I-Newswire) April 15, 2010 - A DOUBLING in profits has put brewer Adnams back on the road to recovery but not without caution for the rest of 2010.
The Southwold-based beer and wine producer revealed last week that its 2009 profits were up 53pc to £3.2m, a massive improvement on last year's trading figures but still below the £4.2m made before the downturn bit in 2008.
Overall sales were up by 9pc, with turnover at £51.3m.
Jonathan Adnams, executive chairman, said the outlook for the coming year was still cautious, but that the firm would again be holding its beer prices for Adnams pubs and free-trade customers, to trade.
“It is very difficult out there,” he said. “It started off with snow and the cold weather hasn't been good for business.
“Beer sales nationally were down 23pc in January and it hits rural areas harder.
“The economic environment isn't looking much better, the price of beer has just gone up in the budget and this is not helpful.
“We have to be cautious. We think 2010 could be equally as difficult as 2009. If we can do the same as we did in 2009 we will be pleased.”
Strengths in the business came from sale of take home beers, up 22pc.
Beer sales were up 4pc, against a static market, the firm said, adding that sales of Bitburger were up 5pc against a 4pc decline in the premium lager market.
Although mail order wine sales were down, the wine merchant had seen a significant rise in wine sales through its website.
The firm's new Adnams Cellar & Kitchen stores had also now broken even, with a 34pc rise in turnover in the second year of trading.
And an increase in visitors to Southwold had resulted in a record year for Adnams Hotels.
Mr Adnams said, although 2008 was a difficult year, investment made in the business from 2006, including a sustainable warehouse at Reydon and new energy recovery brewery, as well as restructuring, had meant they could hold their beer prices to their pubs and free-trade customers.
“By the end of 2007 we had put in six new Cellar and Kitchen shops and then the world fell apart,” he said.
“Having put in extra resources we had to take a lot of that out.”
“Customers were also hit by the recession and we had a lot of extra re-structuring costs. “Everything that could bite us did in 2008.
“But that enabled us to hold beer prices through 2009 and we are going to hold them through 2010 to help businesses out there funding it difficult trading.”
Innovation through launching new products, with eight new beers last year, had also helped the firm maintain its beer sales through maintaining customer interest, he said.
An anaerobic digester to make bio-gas is currently being built is due to come on stream in August.
It will provide power for the plant and delivery fleet and should reduce the firm's carbon footprint by 30pc, said Mr Adnams.
The pub has 72 pubs in its estate and 380 employees, up about 60 on April last year.

About Rory Smith:
A doubling in profits has put brewer Adnams back on the road to recovery but not without caution for the rest of 2010.

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Rory Smith
Rory Smith
East Green Street, Southwold
IP18 6JW
Phone : +44 (0)1502 727200