Adnams PLC Final Results (0046I)

TIDMADB

RNS Number : 0046I

Adnams PLC

12 April 2022

Adnams plc Results for the 12 Months to 31 December 2021

Adnams, the brewer, distiller and retailer has today published its Report & Accounts for the 12 months to 31 December 2021, showing sales of GBP57.4m and a GBP0.9m operating loss.

Commenting on 2021, Jonathan Adnams OBE, Chairman said: "Once again, I was delighted to see how our customers adapted to multiple changes to government restrictions as the year progressed and people enjoyed our pubs and hotels with good cheer and a generosity of spirit towards our frontline colleagues. The loyalty and support of our customers throughout the pandemic has been vital and I would like to take this opportunity to record my heartfelt thanks to them".

The Adnams Report & Accounts headlines include:

   --    Sales grew from 2020 to GBP57.4m 
   --    Beer volumes level with 2020 
   --    Net bank debt GBP11m 
   --    Positive EBITDA of GBP2.6m 
   --    No 2021 final dividend 

After the early months of the year where restrictions were at their most stringent, trading months operated ahead of expectations, delivering GBP7m higher revenues than 2020. Strong cost control and investment in our IT systems technology, enabled the business to mitigate the financial impact of the pandemic and position us well for 2022.

We won a number of awards in the year, including:

   --    CAMRA awarded Adnams with a Golden Pints Award to mark their 50(th) Anniversary 

-- Worlds Whiskies Awards: Gold for Rye Whisky - Best English Rye Whisky, Silver for Single Malt Whisky and Bronze for Triple Malt Whisky

   --    International Beer Challenge Kobold English Lager won Gold 

And launched various new products with an ESG theme:

-- Smidgin, part of our low and no offering, a gin that is strong in flavour and so only a tiny measure is needed. 8 Smidgins contains the alcohol content of one normal G&T

-- In-store refill stations offer the opportunity to purchase a range of Adnams products in a refillable container

-- Wine in a box containing the equivalent to 3 bottles, their carbon footprint is around 10 times smaller than a single-use bottle due to their reduced weight

Ghost Ship in both 4.5% and 0.5% formats continued as the company's best-selling beer and Copper House Dry Gin remained its best-selling spirit.

Chairmans Statement (from accounts released on 12 April 2022)

When I sat down to write this statement it gave me the opportunity to reflect on what a tumultuous two years the company and the wider hospitality industry has faced. As we begin to move from the pandemic to coronavirus being endemic and hopefully subsiding within the population, we can look forward to things returning to some normality. From Adnams' perspective that normality includes being able to welcome our shareholders to our AGM at Snape on the 12th May 2022, an event we look forward to.

The year began with the country in lockdown and the hospitality industry closed. This meant that the company had to continue to operate on a footing very similar to that which it operated for much of 2020, namely: focusing on its online and off-trade business and seeking to retain cash in the business. Whilst this situation is very uncomfortable and incurs losses, the business has become highly competent at managing itself in this situation and adapting rapidly to changing rules, regulations and restrictions. As the darker winter months gave way to an optimism associated with the spring, on the 22nd February the Prime Minister announced his roadmap to reopening the economy.

Key dates for our industry were; 12th April, when pubs were allowed to open for outdoor service only, 17th May, when customers were allowed inside following the rule of 6 or two households mixing; and finally from 21st June all restrictions being removed. The announcement was followed by the Budget speech on 3rd of March where the Chancellor extended flexi-furlough until September and announced a tapering of business rate relief together with VAT remaining at 5% for a period before stepping up to 12.5%. As with 2020, support from HM Treasury was essential for hospitality businesses the length and breadth of the country, with Adnams being no exception. In 2020 we were closed or operating under restriction for 280 days, in 2021 that number reduced to 220 days.

In 2021, the business generated turnover of GBP58m, an EBITDA of GBP2.6m and an operating loss of GBP0.9m. Net debt at GBP11m increased in line with expectations over the previous year as we paid down prior year HMRC commitments, restocked following closure, undertook maintenance in our pubs and reduced government support as we reopened. Given large parts of the business were closed or operating under restrictions for 31 weeks of the year this is considered a creditable performance. The company traded well and was cash generative once restrictions really began to be removed from 17th May. The business undoubtedly benefited from foreign travel restrictions and was well positioned to take advantage of more people choosing to holiday in the UK. Beer and spirit volumes in the on-trade took longer to re-establish themselves as free trade customers and pubcos were understandably cautious about overstocking whilst there was still uncertainty related to the pandemic and the potential for further restrictions to be imposed. Beer and spirits volumes remained largely flat with 2020 and relate to similar trading patterns in both years.

Our development of technology has enabled us to control costs well in the year and the premium nature of the Adnams brand has enabled us to improve profit margins. Given the strong trading position throughout the summer and our confidence in the Adnams brand, the Board decided in January 2022 to pay an interim dividend to reward shareholders who have loyally supported the company through the pandemic. As the company continues to recover from the crisis and rebuild its balance sheet, this payment should be viewed as a one-off. Whilst the company wants to return quickly to a more normal cycle of paying a final and interim dividend, it cannot yet be precise around when this might happen although the Board will keep the situation under continual review.

Concurrent with paying the interim dividend, the company is repaying staff who took reductions in pay during the pandemic. I am proud to say that the company is also a living wage employer, as the cost of living crises disproportionately affects those on lower pay. Our belief is that, in addition to being entirely the right thing to do, paying the living wage creates a virtuous circle with our colleagues demonstrating greater loyalty and commitment to Adnams over the long term.

Once again, I was delighted to see how our customers adapted to multiple changes to government restrictions as the year progressed and people enjoyed our pubs and hotels with good cheer and a generosity of spirit towards our frontline colleagues. The loyalty and support of our customers throughout the pandemic has been vital and I would like to take this opportunity to record my heartfelt thanks to them. It was 1872 when my great grandfather Ernest and his brother George made their way across southern England, arriving in Southwold to found the modern-day Adnams. 2022 therefore represents our 150th anniversary. Added to this, Broadside is 50 years old and we celebrate 30 years of our relationship with Bitburger.

All this in the Platinum Jubilee year for Her Majesty The Queen, meaning there is much to look forward to. We plan a number of events throughout the year and, as you would expect, some celebratory products. All of this will be communicated more fully on our website as the year progresses, so watch this space.

As we moved into 2022 we were looking forward to the future with optimism. However, as I write this statement, a dramatic event is unfolding in Ukraine which besides being a catalyst for a humanitarian crisis has the potential to disrupt commodity markets around the world. Our thoughts are with the Ukrainian people at this time and Adnams will do what it can to support agencies who will be mobilising to provide relief to those affected. Returning to the company, it has invested significantly in upgrading its back office systems in the recent past and is implementing a greater level of technology to serve our customers better. Early this year we implemented a new checkout system in our stores that enables colleagues to check out customers from anywhere in the store via a mobile device; the system also integrates with our website and enables us to have one view of the customer across the business. We have also implemented a new website that enables us to improve the user experience, share our stories and grow online sales still further.

Throughout this whole uncertain period, Adnams values will guide our response towards our customers, staff, shareholders and the communities we operate within. Adnams aspires to be a model company that can be relied upon to do the right thing and I hope we have demonstrated that in 2021.

On behalf of the Board I would like to thank shareholders for the continued support.

Jonathan Adnams OBE

Chairman

 
 Adnams plc profit and loss account 
  For the year ended 31 December 
                                                2021       2020 
                                              GBP000     GBP000 
                                           ---------  --------- 
 Turnover                                     57,368     50,661 
                                           ---------  --------- 
 Other operating income                        1,938      3,196 
                                           ---------  --------- 
 Operating expenses                         (60,204)   (57,599) 
                                           ---------  --------- 
 Operating loss before highlighted items       (898)    (3,742) 
                                           ---------  --------- 
 Highlighted items - operating expenses            -       (90) 
                                           ---------  --------- 
 Operating loss                                (898)    (3,832) 
                                           ---------  --------- 
 Loss on disposal of assets                      (4)          - 
                                           ---------  --------- 
 Loss before interest and taxation             (902)    (3,832) 
                                           ---------  --------- 
 Interest payable                              (352)      (355) 
                                           ---------  --------- 
 Other finance charge on pension scheme        (134)      (117) 
                                           ---------  --------- 
 Loss before taxation                        (1,388)    (4,304) 
                                           ---------  --------- 
 Tax on loss on ordinary activities            (254)        521 
                                           ---------  --------- 
 Loss                                        (1,642)    (3,783) 
                                           ---------  --------- 
 Earnings per share basic and diluted 
                                           ---------  --------- 
 'A' Shares of 25p each                      (87.1)p   (206.8)p 
                                           ---------  --------- 
 'B' Shares of GBP1 each                    (348.3)p   (827.2)p 
                                           ---------  --------- 
 
 
 Balance sheet 
  As at 31 December 
                                               2021       2020 
                                             GBP000     GBP000 
                                          ---------  --------- 
 
 Tangible fixed assets                       38,913     40,816 
                                          ---------  --------- 
 
 Current assets 
                                          ---------  --------- 
 Stocks                                       9,779      8,719 
                                          ---------  --------- 
 Debtors                                      4,202      3,562 
                                          ---------  --------- 
 Cash at bank and in hand                         1        435 
                                          ---------  --------- 
                                             13,982     12,716 
                                          ---------  --------- 
 
 Creditors: amounts falling due within 
  one year                                 (13,439)   (11,923) 
                                          ---------  --------- 
 Net current assets                             543        793 
                                          ---------  --------- 
 Total assets less current liabilities       39,456     41,609 
                                          ---------  --------- 
 Creditors: amounts falling due after 
  more than one year                        (9,867)   (10,199) 
                                          ---------  --------- 
 Provision for liabilities                    (623)          - 
                                          ---------  --------- 
                                           (10,490)   (10,199) 
                                          ---------  --------- 
 Net assets excluding pension liability      28,966     31,410 
                                          ---------  --------- 
 Pension liability                          (4,988)   (11,198) 
                                          ---------  --------- 
 Net assets including pension liability      23,978     20,212 
                                          ---------  --------- 
 Capital and reserves 
                                          ---------  --------- 
 Called-up share capital                        472        472 
                                          ---------  --------- 
 Share premium                                  144        144 
                                          ---------  --------- 
 Profit and loss account                     23,362     19,596 
                                          ---------  --------- 
 Equity shareholders' funds                  23,978     20,212 
                                          ---------  --------- 
 

The Directors have not recommended a final dividend for the financial year ending 31 December 2021, as was the case for 2020.

The information contained in the above profit and loss account and balance sheet has been extracted from the audited accounts of Adnams PLC for the year ended 31 December 2021. The statement preceding the profit and loss account is unaudited.

A trading update will be released on 12(th) May 2022.

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April 12, 2022 02:01 ET (06:01 GMT)