TIDMADB
RNS Number : 9519S
Adnams PLC
24 March 2016
Adnams Plc Annual Accounts 2015
Chairman's Statement
I am pleased to report that the Company made good progress in
2015 with our operating profits rising by 7.3% to GBP4,093,000. We
noted at the half year that turnover was 3% behind 2014, however
this improved in the second half of the year, to leave us just 0.5%
short of the prior year.
On the back of our improved profits we are recommending a 5.9%
increase in our final dividend. This represents an increase of 8p
per 'B' share and is in line with the increase in the final
dividend paid in 2014.
The economic mood for much of 2015 was reasonably buoyant,
though it is clear that consumer spending patterns continue to
evolve quickly, and it has been very important for us to keep our
finger on the pulse of the market and our eye on future trends. The
diversity of our business, spanning beer, spirits, shop retail,
hotels and pubs also gives us some protection against any downturn
in particular markets. One of the most notable features of 2015 was
the growing regulation of the beer and pubs sectors together with
continued changes to the many taxes that the industry pays.
In March we were pleased to see, for the third year running, a
cut in beer duty rates. The penny a pint reduction was welcome,
particularly when reflecting on the above inflation duty increases
that had preceded these cuts, with duty having risen 42% in the
previous five years. Shareholders will be aware of the recently
proposed changes to safe drinking guidelines in the UK. The view
that Adnams has held for many years is that we should work towards
encouraging safe and responsible drinking. We see moderate alcohol
consumption as an aid to relaxation and a source of enjoyment.
Total UK beer sales fell by 1.5% in 2015, a disappointing result
after the modest growth the previous year, though in line with the
long-term trends dating back to the later 1970s. However, within
the beer market we saw the continued growth of beers brewed by
smaller producers. UK cask ale sales, a subset of the total market,
were 0.8% ahead of last year and sales of bottled and canned ales
were 6.3% ahead. The continuing switch to the off trade is also a
long-term trend, though another of those trends, the growth of
lager relative to ale, seems to be turning around, aside from
premium and craft lagers. The main lagers being sold are still
those of the major international brewers, however we are hopeful
that consumer tastes will increasingly open the door to products
such as Adnams Dry Hopped Lager and the purchase of craft brewers
by international brewers may serve to hasten that trend.
I wrote last year about the project that Adnams wished to
undertake to ensure that we have the capacity and flexibility to
meet the demands of a changing beer market. Our investment is now
well underway and by the time that the work is completed at the end
of 2017, we will have spent around GBP7 million on extensions and
improvements. Most notably this project will give us new bottom
fermentation, beer conditioning and filtration capacity, much
enhanced cooling equipment and an automated kegging line.
During 2015 we spent about GBP0.5 million on extending our
distillery. We started distilling at the end of 2010 and have been
delighted with how well this business has grown and the reputation
that our spirits have built. The result of this success was that we
reached full capacity in the distillery last year and have now
trebled what we are able to produce. The new equipment, including
two new stills, was commissioned in January 2016.
Another clear trend of recent years has been the sad reduction
in pub numbers. We too have seen the impact on our pub estate of
changing consumer tastes and increasing competition from home
entertainment, casual dining, fast
food outlets, coffee shops and others. We continued to sell some
of our smaller pubs and six more were sold in 2015. We have sold
one more pub since the year end and have another still for sale,
but as things stand we do not envisage selling many more of our
properties. We have tried hard to sell pubs as going concerns and
to keep them trading as pubs and in nearly all cases we have been
able to do this. Trading in our continuing tenanted and leased
estate, where we have some great pubs and some first-rate
operators, was good during the year with like-for-like income up by
3.5%.
The other side of our pub business is pubs and hotels that we
manage ourselves. In the last couple of years we moved the White
Horse at Blakeney and the Ship at Levington under our own
management. We have been seeking to build a business in running
managed properties outside the Swan and Crown in Southwold and
signs so far are encouraging. There are clear advantages in running
both a managed and a leased and tenanted estate and being able to
move pubs between them as market conditions change. In 2015 the
Swan was shut for refurbishment for much of the early part of the
year, which inevitably affected its performance.
Our shops business has continued the success that we have seen
in the last few years. We have built the retail skills that we
require and honed our proposition towards our shops being an
integral part of the Adnams brand, selling goods under the Adnams
name and promoting that name to wider groups, especially a female
audience. The take home market has been the strongest part of the
beer market for some years and having our own shop outlets means
that we are well placed to take advantage of this trend. We made a
further modest expansion to our shop estate in 2015, opening in
Bury St Edmunds and running a pre-Christmas pop-up in the Coes shop
in Ipswich.
We were delighted to add Guy Heald and Karen Hester to the
Adnams Board in April, with Karen becoming our first ever female
executive director and our Executive Committee includes five senior
female employees. We seek to recruit, retain and develop the very
best talent based upon merit and contribution. We were therefore
pleased that by applying these clear principles we have achieved
such an effective gender balance. The Company is stronger as a
result.
As from April 2016 a new National Living Wage will apply in the
UK. In anticipation of this change we applied the new rate in
October 2015 and we had already been moving towards the Living Wage
Foundation rates. We believe that paying better wages is the right
approach and may be particularly important in sectors such as
leisure and hospitality where pay rates have often been less
good.
Shareholders will notice a number of changes to the format of
the accounts this year. The accounting regulators have released a
new standard replacing the many previous ones that formerly
applied. Adnams tries to keep its operations simple and the changes
that affect us are for the most part quite modest and we have
outlined these in the finance commentary section of the Strategic
Report.
In 2015 we moved our annual general meeting to Snape Maltings.
The move from Southwold was a wrench, and we know that there are
shareholders who would have preferred that we had not changed.
However, change was forced upon us by the lack of suitable and
available facilities in Southwold and feedback from most at the
Snape AGM was very positive. The facilities there are far superior
to what we previously had in Southwold and we look forward to
making Snape the regular home for our general meetings.
Outlook
I observed earlier that the economic environment in 2015 was
reasonably buoyant. Sentiment at the start of 2016 has been less
so. The uncertainties created by the forthcoming EU referendum may
have some role in this, though global economic conditions seem less
benign. The impact of this on consumer spending and our own sales
is always hard to judge, however there seems a fair likelihood that
2016 will be a tougher year for the economy than was 2015. In terms
of the alcohol business in particular we saw somewhat lower January
sales and it is hard to escape the conclusion that a growing
interest in following 'dry January' may have had a role in this.
January is far from the most important month, however the trend is
perhaps indicative of the growing prominence of public health
messages.
I nearly always conclude my comments with the observation that
Adnams is here for the long-term, and that remains the case. We are
fortunate to have a supportive group of shareholders whose
perspective is intergenerational rather than focussed on annual
announcements or exit strategies. That is a great advantage and we
will continue to build a long-term business with that support, for
which we thank you.
Jonathan Adnams OBE
Chairman
Adnams plc profit and loss account
For the year ended 31 December
------------------------------------------------------------
2015 2014
GBP000 GBP000
-------------------------------------- --------- ---------
Turnover 65,698 66,032
-------------------------------------- --------- ---------
Operating expense (61,605) (62,217)
-------------------------------------- --------- ---------
Operating profit 4,093 3,815
-------------------------------------- --------- ---------
Profit on disposal of properties 625 626
-------------------------------------- --------- ---------
Profit on ordinary activities before
interest and taxation 4,718 4,441
-------------------------------------- --------- ---------
Interest receivable 1 1
-------------------------------------- --------- ---------
Interest payable (269) (312)
-------------------------------------- --------- ---------
Other finance charge on pension
scheme (382) (240)
-------------------------------------- --------- ---------
(MORE TO FOLLOW) Dow Jones Newswires
March 24, 2016 03:00 ET (07:00 GMT)
Profit on ordinary activities before
taxation 4,068 3,890
-------------------------------------- --------- ---------
Tax on profit on ordinary activities (839) (907)
-------------------------------------- --------- ---------
Profit for the financial year 3,229 2,983
-------------------------------------- --------- ---------
Earnings per share basic and diluted
-------------------------------------- --------- ---------
'A' Shares of 25p each 171.1p 158.1p
-------------------------------------- --------- ---------
'B' Shares of GBP1 each 684.3p 632.2p
-------------------------------------- --------- ---------
Balance sheet
As at 31 December
--------------------------------------------------------
2015 2014
GBP 000 GBP 000
---------------------------------- --------- ---------
Fixed assets
---------------------------------- --------- ---------
Tangible assets 38,545 35,481
---------------------------------- --------- ---------
Investments - 5
---------------------------------- --------- ---------
38,545 35,486
---------------------------------- --------- ---------
Current assets
---------------------------------- --------- ---------
Stocks 6,377 5,921
---------------------------------- --------- ---------
Debtors 7,587 8,647
---------------------------------- --------- ---------
Cash at bank and in hand 17 1,202
---------------------------------- --------- ---------
13,981 15,770
---------------------------------- --------- ---------
Creditors: amounts falling
due within one year (18,024) (10,085)
---------------------------------- --------- ---------
Net current (liabilities)/assets (4,043) 5,685
---------------------------------- --------- ---------
Total assets less current
liabilities 34,502 41,171
---------------------------------- --------- ---------
Creditors: amounts falling
due after more than one year (223) (8,483)
---------------------------------- --------- ---------
Provision for liabilities (990) -
---------------------------------- --------- ---------
(1,213) (8,483)
---------------------------------- --------- ---------
Net assets excluding pension
liability 33,289 32,688
---------------------------------- --------- ---------
Pension liability (3,225) (11,468)
---------------------------------- --------- ---------
Net assets including pension
liability 30,064 21,220
---------------------------------- --------- ---------
Capital and reserves
---------------------------------- --------- ---------
Called up share capital 472 472
---------------------------------- --------- ---------
Share premium 144 144
---------------------------------- --------- ---------
Profit and loss account 29,448 20,604
---------------------------------- --------- ---------
Equity shareholders' funds 30,064 21,220
---------------------------------- --------- ---------
The Directors have recommended a final dividend for the
financial year ending 31 December 2015 of 144% per share (2014
136%) on the 'A' and 'B' Ordinary Shares. This amounts to GBP1.44
per 'B' share (2014 GBP1.36) and 36p per 'A' share (2014 34p), a
5.9% increase on the previous year. The dividend will be paid on 3
May 2016 to the shareholders on the register on 8 April 2016. In
line with UK accounting standards, the 2015 final dividend has not
been accounted for within the above financial statements.
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 2015. The statement
preceding the profit and loss account is unaudited.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SEIFMEFMSELD
(END) Dow Jones Newswires
March 24, 2016 03:00 ET (07:00 GMT)