Adnams, the Suffolk-based family brewer and pub operator, has reported a rise in revenues but widening losses of £4m, driven by cost increases.
Reporting results for the 12 months to 31 December 2023, Adnams saw sales rise 3% to £66.3m (2022: £64.2m), with stronger demand in on- and off-trade channels in the second half of year.
It comes as the company continues to explore options to fund its future growth plans with the support of its advisors and has received an “encouraging response” to the process.
The board’s preferred option remains the raising of additional capital from another party, and/or the sale of freehold assets to return capital to the company, however no decision has yet been taken.
Adnams reported year-on-year beer volumes rose 3% in the second half of 2023 and 11% in first quarter 2024 trading.
Operating losses widened to £2.5m (2022: £1.2m) due to higher costs, while the pre-tax loss was £4m (2022: £2.3m).
The company achieved a positive EBITDA of £0.6m (2022: £2.0m), with net bank debt increasing to £15.9m (2022: £13.9m) with headroom remaining.
The company said whilst multiple factors had continued to challenge brewing and hospitality throughout the year, it was pleased to report a third consecutive year of growth following the pandemic - which it said demonstrated the resilience of its business and brand.
It said positive contributions had been made by every part of its business, particularly in the second half of the year when its off-trade business materially outperformed the market.
The company said its full-year loss had widened to £4m due to the aggregate impact of cost increases including interest, adding that falling inflation had eased some costs in the current year.
It said this, together with the full-year impact of previously announced cost reduction measures and continued disciplined cost management, would support its profit improvement plans for the current year.
In April this year, the company reported positive first quarter trading for the three months ending 31st March 2024, with total sales up 11% year-on-year, with a notably strong contribution from its on-trade business and contract distilling in its spirits business, which it said showed continued forward momentum.
Andy Wood, chief executive of Adnams, who steps down from his role at the end of June to be replaced by Jenny Hanlon, said: “As we continue to pursue our strategy, it’s important that we leverage our distinctive strengths - as a heritage-rich, innovative company - to their fullest. The Adnams brand continues to hold significant equity and is championed and cherished by its customers.
He added: “The coming months will see the company undergo further change as it is positioned for further growth. This change is likely to result in a simplified operating model that encompasses the things the business does well, whilst reducing its borrowings, susceptibility to economic shocks and building greater resilience.”
