Chairman's Report
2018 was a year of considerable change for Adnams. After the very substantial investments in 2017, we had our first full year of trading at the transformed
At
The changes that we made in the year led to a number of one-off costs, notably the cost of outsourcing the filling of casks for a few months whilst we installed our dealcoholisation plant, and a new cask robot. However, as we anticipated at the time of our AGM, we moved from a first half position where operating profit was behind 2017 to being ahead of the prior year in the second half. Significant exceptional highlighted items have been charged at the full year.
The strategy of Adnams is to be a high quality branded drinks producer and provider of top quality customer experience in our property estate. The success of our low alcohol Ghost Ship, further highly respected awards for our spirits, and plaudits for the reopened Swan stand as evidence that our strategy is being delivered.
Beer
The beer market continues to evolve rapidly. For the first time for many years, volumes of beer sold in the
One very positive trend for Adnams is the growing interest in 'low and no' alcohol beers, and Ghost Ship 0.5% is making a strong name for itself in this field. Adnams has invested in industry-leading technology to make its beer with results that are correspondingly good. Success has been such that we have already made a further investment to double our production capacity.
Regular readers of these accounts will know that we have frequently referred to the distortions caused by Small Breweries Relief (SBR), the
Spirits
In 2013, Adnams celebrated winning the Gin Guild Cup for the best gin at the
Adnams was an early entrant into the craft spirits market in the
Properties
The Adnams properties aim to provide top quality customer experience. Foremost amongst them is the
Over the last few years, Adnams has developed a much stronger capability to run its own managed pubs and hotels and this has allowed us the ability to move properties between tenancy, leasehold or management as circumstances suggest. In 2018, we moved the Five Bells in Wrentham under our own management and since the year end we have done likewise with the
The managed estate allows us to communicate the Adnams brand under our own direction, though some pubs, particularly smaller ones, are better managed by others and many of our tenants and lessees are excellent advocates of Adnams.
Retail
The Adnams shops have an important role in raising the visibility and reputation of our brand and in providing a valuable channel of distribution for our products, particularly given the continuing market trend for customers to prefer beer and spirits packaged for consumption at home. Our shops work hand-in-hand with our online and mail order businesses to grow and widen our customer base. Our shops estate remained largely unchanged during the year.
Brand
The Adnams brand represents our promise to customers. We continue to invest strongly in brand development and evolve the communication channels we use. Digital content is becoming ever more important. However, different from many brands, Adnams has a real authenticity and human dimension to it and we will be blending our instinctive feel for our markets, our customers and their needs with increased use of data to ensure we develop and deliver products that meet their needs in compelling and motivating ways now and in future.
Systems
For the last eighteen months Adnams has been engaged in a major and very important change to its core systems governing the operation of its manufacturing and wholesale businesses. We had hoped to complete this project in the second half of last year; however, the scale of this implementation and the extent of the changes to our business processes have meant that the system will be going live just after the signing of these accounts. There will be some inevitable early disruption from such a fundamental change; however, adopting best practice systems is vital for the future growth and resilience of our business.
Dividend
We are recommending an unchanged final dividend of
Outlook
Those writing forward-looking statements at this time no doubt share an uneasiness as to how the future will look. At the time of writing we are due to circulate this report on the day before the
Our business is well-invested including state of the art systems. We have ensured that quality is at the heart of what we do and that we can communicate that message to our customers. We are well placed for the future, uncertain as it may be, and we will continue to keep our focus on our long-term success. I would like to thank you for your support.
Jonathan Adnams OBE
Chairman
For the year ended 31 December |
||
|
2018 |
2017 |
Turnover |
78,918 |
74,765 |
Operating expenses |
(77,312) |
(72,606) |
Operating profit before highlighted items |
1,606 |
2,159 |
Highlighted items - operating expenses |
(1,766) |
(721) |
Operating (loss)/profit |
(160) |
1,438 |
(Loss)/profit on disposal of assets |
(21) |
671 |
(Loss)/profit on ordinary activities before interest and taxation |
(181) |
2,109 |
Interest receivable |
1 |
1 |
Interest payable |
(505) |
(310) |
Other finance charge on pension scheme |
(192) |
(251) |
(Loss)/profit on ordinary activities before taxation |
(877) |
1,549 |
Tax on profit on ordinary activities |
92 |
(513) |
(Loss)/profit for the financial year |
(785) |
1,036 |
(Loss)/earnings per share basic and diluted |
|
|
'A' Shares of 25p each |
(41.6)p |
54.9p |
'B' Shares of |
(166.4)p |
219.6p |
Balance sheet As at 31 December |
||
|
2018 |
2017 |
|
|
|
Tangible fixed assets |
45,181 |
46,535 |
|
|
|
Current assets |
|
|
Stocks |
9,496 |
8,065 |
Debtors |
10,654 |
10,085 |
Cash at bank and in hand |
22 |
23 |
|
20,172 |
18,173 |
|
|
|
Creditors: amounts falling due within one year |
(18,883) |
(17,185) |
Net current assets |
1,289 |
988 |
Total assets less current liabilities |
46,470 |
47,523 |
Creditors: amounts falling due after more than one year |
(10,199) |
(10,221) |
Provision for liabilities |
(720) |
(437) |
|
(10,919) |
(10,658) |
Net assets excluding pension liability |
35,551 |
36,865 |
Pension liability |
(7,964) |
(8,223) |
Net assets including pension liability |
27,587 |
28,642 |
Capital and reserves |
|
|
Called up share capital |
472 |
472 |
Share premium |
144 |
144 |
Profit and loss account |
26,971 |
28,026 |
Equity shareholders' funds |
27,587 |
28,642 |
The Directors have recommended a final dividend for the financial year ending
The information contained in the above profit and loss account and balance sheet has been extracted from the audited accounts of
This information is provided by RNS, the news service of the