Adnams plc Interim Accounts 2025

Chair's Report

The business has made good progress in implementing its simplified strategy in the first half of 2025. Debt reduction is on target and despite challenging market conditions, we are seeing some successes in the turnaround plan.

At the half year our debt had reduced considerably to £11.7m, down from £18.2m at the same time last year and by the end of September will have reduced further to c£8m. This has been achieved through the disposal of a number of non-trading assets, alongside a small number of trading sites sold, enabling us to limit the impact on trading revenue where possible. Wherever circumstances permitted, long term trading arrangements were made with the acquirers of trading sites, so our products remain on the bar. Our pub trading estate will comprise 28 sites, 19 of which are run as independent businesses by our Tenants and the other 9 are operated directly by us as Managed Properties. We expect to conclude our strategic asset disposal programme imminently, with debt now at a more sustainable level for the business.

Achieving the planned timeline for such a level of debt reduction has reinforced our strong relationship with Barclays, who have actively demonstrated their willingness to collaborate with us as a true partner.

Performance at an operating income level, before gains on disposals, was flat year on year at £1.5m. This arises through the mitigation of lost income from disposal sites with cost reductions across the business, whilst we accelerate the implementation of sales initiatives designed to grow our top line.

Exceptional costs of £1.2m, predominantly comprise of a charge in relation to the Extended Producer Responsibility (EPR) scheme, a new regulatory regime requiring producers to pay for the costs of recycling consumer packaging. Due to the complex and burdensome mechanics of introduction of the scheme, and in common with many UK brewers, we have incurred a charge for 2024 packaging despite being unable to recover these costs from our customers.

Revenues for the business as a whole were £30.1m, 5.7% down on the previous year. Performance in the on- and off-trade markets across the sector remains in decline, with our trading in the off-trade bucking the trend, performing 2% better than the market in the first 6 months of the year. In June alone, our on-trade business grew by 3.3% compared to an 8.5% reduction across the market as a whole.

Our Direct on-trade business, which trades with independent publicans, remained stable against a very challenging back drop where many free-trade pubs are struggling to stay in business. This channel performed particularly strongly in June, up 18% on the previous year, benefitting from additional wine and spirit sales and very good weather conditions.

Our National business, which sells into Pub Companies and Wholesalers, had a very challenging start to the year, with an 18% reduction on 2024, albeit we have managed to substantially stem the rate of decline recently. Sales into supermarkets fell slightly, but this is more as a result of proactively managing both range and customer profiles, actively looking to remove less profitable transactions.

In Managed Properties, total revenues grew 4% on 2024 with growing occupancy in hotel sites and more food and beverage sales. Revenues increased 5.8% on a like-for-like basis, which is the most appropriate way to illustrate the performance of the underlying business as it removes those sites which have transferred to tenancy or those which

have been sold. All months saw an uplift on the previous year, with the exception of March due to the timing of where Easter fell.

As expected, Tied revenue, both wet sales and rental income were down due to the reducing size of the estate. However, like-for-like performance in the remaining estate improved on the prior year.

The Retail business including online operations remains in line with the prior year.

Our strategic focus remains on Ghost Ship and Destination Southwold. These two key elements are crucial to our future success, not only playing a significant role in how we appeal to consumers, but also in how we structure our internal operations, ensuring disciplined focus and efficiency.

Through rigorous cost management, operating costs fell 5.4% to £31.6m, essential as we transition from pressured revenues into balanced growth. This is a considerable achievement given the rising costs of the National Living Wage, National Insurance Contribution changes and the on-going costs of EPR. As we reported to the AGM, the combination of these items is expected to cost Adnams £2m in 2025.

Ghost Ship 0.5% maintains its popularity, holding its position as the fastest selling low/no ale. Our branding will see the name evolve to Ghost Ship Alcohol Free, following new guidance that suggests this product labelling is more appropriate. At the same time, we are changing our can format from 330ml to the more traditional 440ml, which further meets consumer

needs. This move has already won new listings in the off trade which will support future growth.

We continue to make good progress on recruiting new consumers through our sampling programme, having delivered 71,000 samples of Ghost Ship Alcohol Free out of our 100,000 target for the year. Furthermore, the Adnams partnership with Classic Ibiza is allowing us to reach in excess of 60,000 people at the 7 live events, growing our engagement online, and broadening our appeal to a wider demographic. Our Classic Ibiza on pack promotion has had over 8,000 entries to date showing a strong level of interest in the partnership.

To celebrate our 15th anniversary of Ghost Ship and given the popularity of the brand, a new member of the family is being launched, Ghost Ship Session IPA, which has already gained listings with off-trade customers. This is timed to coincide with cask ale week, naturally elevating the Ghost Ship brand's visibility.

We recently announced the appointment of Andy Driscoll as Chief Financial Officer and executive director of the company.

Andy is a qualified accountant with significant financial leadership experience across FMCG and logistics sectors

and will formally join the business on 1st September 2025. The appointment of a permanent CFO means that Robin Paul will stand down in the coming weeks after a period of handover. I would take this opportunity to thank Robin on behalf of the whole Adnams community, for his outstanding support through a challenging period for the business.

We have much work to do as we implement our sales and marketing plans to enable the business to grow again into areas of opportunity. With the benefit of a stable balance sheet and substantially lower debt, and by driving a much greater degree of commerciality across the business, we can look to the future with confidence.

On behalf of the Board

Simon Townsend

Interim Chair

Profit and loss account

For the six months ended 30 June 2025

Balance sheet

As at 30 June 2025

Notes

1 Basis of preparation

The interim accounts, which have not been audited, have been prepared under the recognition and measurement principles of FRS 102 using the accounting policies consistent with those disclosed in the 2024 annual report. These are the policies expected to be applied in the preparation of the audited financial statements for the year ended 31 December 2025.

The financial information for the year ended 31 December 2024 does not constitute the full statutory accounts for that period. The Annual Report and Financial Statements for the year ended 31 December 2024 have been filed with the Registrar of Companies. The Independent Auditor's Report on the Annual Report and Financial Statements for the year ended 31 December 2024 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

Despite the major uncertainties at this time across the economy as a whole, and the challenges of this industry, in the reported first half of the year Adnams has continued to operate within its banking covenants on its debt facility. The business manages cash carefully and has concluded, based on its cash management ability and current projections, that it is appropriate for Adnams to adopt the going concern basis for these accounts.

2 Other operating income

The inclusion of the other operating income line within the profit and loss account is to reflect correct accounting treatment of furlough claims and grant income in all periods.

3 Taxation

The taxation charge is based on the estimated tax rate for the year.

4 Earnings per share

Earnings per share is calculated by dividing the earnings available to ordinary shareholders by the issued ordinary share capital of £471,842. The earnings per share calculation is the same for basic and diluted earnings.

5 Loss per share

Loss per shares after asset disposals is not reported above as there were no asset disposals in the period.