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Wed 14th Aug 2019 - Adnams report First Half dip in turnover, losses up
Adnams report First Half dip in turnover, losses up: Suffolk brewer and retailer Adnams has reported half year losses to 30 June rose to £783,000 from £557,000 in the year before. Turnover dipped to £34.7m from £35.5m for the comparable period. Chairman Jonathan Adnams said: “The last few years have seen substantial change and considerable investment in the Adnams business as we have positioned ourselves in crowded and rapidly changing markets. The last, and vital, plank of this investment has been renewal of our core systems, the previous system having been in place for towards thirty years. Against this backdrop turnover was slightly lower than in 2018 and the half year operating loss rose from £557,000 to £783,000 as we needed to increase costs to deal with the business change. Our new system went live at the end of March and has unarguably been a major distraction during the past half year. However, the process of change is easing, and we are starting to be able to remove the additional costs required to facilitate and embed our new processes. For its size, Adnams is a complex business selling a large variety of products in many different ways through many different channels. This makes our system needs relatively onerous and the process of change particularly challenging. Adnams beer volumes were ahead of the market for the first six months of 2019, showing an increase of 2% against a market fall of 1%.The growth of the Adnams managed estate continued during 2019 with an important outlet in Aldeburgh, the Cross Keys, moving from tenancy to management in April. The estate now numbers nine properties. The Swan Hotel, which was completely refurbished during 2017, has continued to build its business with turnover 11% up on 2018 leading to an improved bottom line and net cash generated 14% higher than the prior year. Our leased and tenanted estate has reduced in size in recent years and now comprises thirty-eight properties. There were no sales during the last six months, however the comparative period included profits from the King’s Head, Laxfield, the Lord Nelson, Ipswich and the Bridge House, London. The first two were sold in 2018 and the lease on the latter expired just after the half year end last year. Nonetheless, despite the smaller estate results were close to those achieved in 2018.Our shops performed well in the first half of 2019, with results ahead of 2018 with an unchanged estate. Our shops have an important role in helping to display our brand to a wider audience, in acting as a launch platform for our new products, and in providing a valuable sales channel through which we can directly sell product that we make or brand ourselves. The disruption from our new systems had some inevitable impacts on our bank debt which at 30th June was £21.0m (30th June 2018: £18.6m).”

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