Adnams PLC AGM Statement

The following comments were made at today's AGM:

Adnams' focus in the first quarter of 2018 has been on bedding-in the major investments that we made in 2017 and completing the investment that we have been making in dealcoholisation plant. The new computer systems project will continue throughout most of 2018. Our most notable 2017 investment was in transforming the Swan Hotel where reviews have been very positive and we look forward to building a strong and successful business. We also completed the £7 million three-year project in our brewery, which has extended capacity and is providing us with beer conditioning, filtration, enhanced cooling and an automated kegging line. This equips us well for the changing beer market and the growth in demand for kegs, bottles and cans.

In the first quarter of 2018 we have continued to grow our beer volumes and these were towards 5% higher than in the first quarter of 2017. Spirits volumes were up by approaching 30%. Though we are pleased with these growth rates, they are a little slower than we have seen in many recent periods and this reflects what has been quite a challenging quarter for some parts of the business. The poor weather that we saw in March was a particular challenge for our pub and managed inns business.

We have focused on our cost base in this quarter and initiated some important savings, though these will mainly affect periods beyond the first half year. We are expecting a first half result behind 2017 on the back of the less good trading conditions and the costs of completing our investments in the brewery and in implementing new central systems. As we have grown the retail side of our business, notably hotels, shops and managed inns, our profit has shifted towards the second half of the year and we anticipate a stronger second half to 2018.