Adnams plc - Final Results

Adnams Results for the 12 Months to 31 December 2024

·      Sales growth of 3% to £68.1m (2023 £66.3m), with sales increases in most business channels

·      Off-Trade ale volumes at (0.3%) outperformed the market which declined by (6.2%) versus the prior year

·      Operating losses reduced to £1.2m (2023: £ 2.5m) as a result of improved trading performance and disposal of non-core assets

·      Pre-tax loss of £2.8m (2023: £4.1m)

·      Adjusted EBITDA of £1.2m (2023: £0.6m)

·      Net bank debt reduced to £15.3m (2023: £15.9m)

Adnams plc (the "Company"), the Suffolk-based premium drinks producer and hospitality group, has today published its Report & Accounts for the 12 months to 31 December 2024.

The Company reported sales had increased 3% to £68.1m - its fourth consecutive year of growth - which it said demonstrated the resilience of its business and brand notwithstanding very challenging market conditions.  The Company saw significant Board changes during 2024, with Simon Townsend appointed as interim chair and Jenny Hanlon appointed as CEO.

It said revenue grew in all parts of the business on a like for like basis, with the exception of Retail, where trading conditions on the high street remained challenging.  The Company continues to reduce its level of debt through the divestment of non-core assets while preserving those assets critical to future success. Alongside debt reduction, the company is implementing a commercial turnaround plan to improve revenue growth and profitability.  The performance reported for 2024 illustrates the early stages of this plan.

The Company reported that cask ale volumes had declined by (5.3%) against a market decline  of (7.6%).  Off-Trade ale volumes suffered a small decline of (0.3%) versus prior year, significantly ahead of the wider industry decline of (6.3%).  On-Trade ale volume declines of (5.8%) were worse than the market (3.7%), however performance improved during the course of the year to less than 1% behind the market in H2. 

The company's leading low/no pale ale, Ghost Ship 0.5%, saw considerable success with volume growth of 8.5% in 2024. In particular, keg volume grew by 52% in 2024 and has continued its growth in 2025 with the first quarter sales up a further 50% on 2024. Overall brewed volumes increased by 12.5% in the year, largely driven by contract spirits volumes, which increased by 53% in 2024. Furthermore, sales of Adnams Copperhouse Gin continued to show growth of 30% in the first 4 months of the new financial year.

Looking to the future, the Company said that it is fully focussed on the core tasks of improving the trading performance of the company through its "Ghost Ship" and "Destination Southwold" sales and marketing strategies, and continuing to reduce borrowings.

Adnams plc's AGM will take place on 27^th June 2025.

For further information contact info@adnams.co.uk

Chair's Statement (from accounts released 29^th May 2025)

Since being appointed as Interim Chair of Adnams plc in October 2024, it has been a privilege for me to work with the Board and management team as we seek to address the company's financial performance and future prospects and ultimately improve value for shareholders.

Adnams has undergone significant change in 2024, and it is the Board's expectation that the benefits of the actions that have been taken will start to flow through into our financial performance in 2025 and beyond.

Jenny Hanlon became Chief Executive in July and immediately began to make a positive impact on the pace and urgency with which our management teams are facing up to the business challenges we have to meet. Robin Paul joined the company as Interim Funding Advisor in July 2024 and has been providing outstanding value to the company, allowing the Chief Executive to give her undivided attention to the turnaround of the business.

The market in which we are operating continues to be immensely challenging, and our business is having to become unashamedly commercial if we expect to be able to compete effectively, grow our share and improve our underlying performance. It has been extremely reassuring to witness how our teams have been responding to the demands that are being placed upon them.

It would be remiss of me not to mention the support that I have received, both as a non-executive Director and since as Interim Chair, from Jonathan Adnams, who retired as chair in October 2024. Jonathan's contribution to the company that bears his family name has been considerable throughout his 49 years of service, and we wish him every happiness in his retirement.

At the last AGM, Steve Sharp announced his intention to retire as a non-executive and senior independent director in 2025. Steve joined the board in 2007 and has provided immense marketing insight and commercial wisdom throughout his 18 years of service. I am extremely grateful to Steve for the continuity and guidance that he has provided during a period of considerable change to the board.

Sadly, the Adnams community lost two of its great stalwarts in recent months. Firstly, in October 2024 we learned of the sudden death at the age of 55 of John McCarthy, Head Distiller. John had been an integral part of the Adnams team for over 20 years. In January 2025, we also learned of the passing of Karen Hester, who had only retired from her role as Chief Operating Officer in April 2024, after completing over 35 years of service with Adnams. Karen's dedication and commitment to the company throughout her career was clear, and both she and John are much missed.

Turning to the financial performance of the company in 2024, adjusted earnings before interest, tax, depreciation and amortisation (Adjusted EBITDA) grew to £1,204k (2023: £586k) and resulted in a reduced operating loss of (£1,169k) (2023: (£2,515k)). Whilst this was an improvement on the prior year, both adjusted EBITDA and operating profit are not representative of the returns that Adnams should be capable of realising. Net debt was £15,304k at the end of the year (2023: £15,933), a reduction of £629k. £629k arising entirely as a result of the receipt of disposal proceeds in the year.

In simple terms, the company's current level of indebtedness is unsustainable and we have therefore embarked upon a programme of asset disposals, the proceeds of which are being used to reduce the company's borrowings. The asset disposal programme will continue until such time as the company's earnings are sufficient to support its debt. At the same time we are driving our underlying business performance to enable sufficient free cash to be reinvested in the business and facilitate the reinstatement of dividends for shareholders.

Profitability across the business has been extremely unpredictable, and whilst most parts of the business failed to meet our budget expectations during the year, our hotels, managed pubs and tenanted pubs performed satisfactorily under the circumstances.

The contribution from our shops was disappointing, on top of which generating profitable sales across our business-to-business channels fell well short of expectations, necessitating both a root-and-branch review of product and service costs across all channels and product lines, as well as a restructuring of our salesforce resources. We expect to see the benefits of these substantial changes take effect in 2025.

Contract production in both brewing and distilling delivered an important contribution in 2024, demonstrating our capability as a high quality and flexible contract partner.

What has become clear in a relatively short period of time is the necessity for strategic clarity to be brought to the Adnams business - simplification where appropriate, doubling-down on our strongest attributes and a steadfast pursuit of sales growth, providing that attractive margins can be realised. Adnams possesses a number of valuable brand and property assets and an enviable profile across Suffolk with its epicentre in Southwold. The Chief Executive is bringing much-needed clarity to our pursuit of those parts of the market where we can win profitably and those channels, or customers, where we may have to withdraw if profitable sales cannot be maintained.

The UK hospitality marketplace is facing a number of headwinds in 2025, including unreliable consumer confidence, questionable economic growth and the imminent impact of increases in employment costs through employers' National Insurance contributions and the National Minimum Wage, plus the introduction of substantial additional taxes through the Extended Producer Responsibility levy. Businesses such as Adnams are receiving no positive support whatsoever from the Government, despite our role as an important employer at the heart of the communities which we serve. It is clear that the actions we are taking, and will continue to take, to improve profitability and reduce borrowings are the essential elements of a self-help story.

As we embark upon a new phase of the Adnams legend, I would like to extend my sincere thanks to everyone in the Adnams team for their resilience, commitment and loyalty to the company, and to our business partners - tenants, suppliers, lenders and customers - for their support and custom.

Simon Townsend

Interim Chair

Profit and loss account

For the year ended 31 December 2024

Balance sheet

As at 31 December 2024

The Directors have not recommended a final dividend for the financial year ending 31 December 2024.

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 2024. The statement preceding the profit and loss account is unaudited.

ENDS