TIDMADB
RNS Number : 1994A
Adnams PLC
22 September 2022
Adnams plc Interim Accounts 2022
"Our investments in sustainability will serve us well into the
future."
Chairman's Statement
In so many respects the nation limped into 2022 as the pandemic
subsided and the economy took its first tentative steps towards
recovery. So it was for pubs and bars as they looked forward to a
year where they were able to trade normally and without
restriction. For the company this has led to the first half of 2022
being a period of stabilisation and consolidation of our position
following two years of disrupted trading. I am pleased to report
sales of GBP30m in the first half of the year, up by GBP9m from
2021. This gives rise to a GBP2.4m improvement in our operating
loss at (GBP0.7m) vs (GBP3.1m) last year. Cashflow remains strong
and we have repaid all outstanding monies owed to HMRC and are no
longer in receipt of any Government support schemes. We refinanced
in January and maintained our facility with Barclays to GBP20m.
This comprises a GBP10m term loan, GBP7m revolving credit facility
and a GBP3m overdraft. The business also retains the ability to
call down a further GBP3m facility.
During the first six months of the year, we saw the on-trade
recover some of its lost ground at the expense of the off-trade,
although we believe it will be some time yet before it returns to
pre-pandemic levels. In this period, we have seen the behaviour of
customers in rural and coastal pubs also change. They are visiting
and eating much earlier in the evening and consequently going home
much earlier. Later in the evening pubs are much quieter than
pre-pandemic and we are seeing pub visits even more weighted
towards the end of the week and weekends. This leads to some pubs
still operating restricted opening hours, time alone will tell if
this becomes normal practice. Our managed estate, comprising mainly
of hotels and larger pubs with rooms, have continued to fare well
and benefit from the staycation phenomenon. The media reporting of
disruption at airports and ports has led many of our customers to
retain a UK break in their repertoires and this has benefitted us.
Our leased and tenanted pubs, many of which are in tourist
locations, have also benefitted from this development. Covid
lockdowns were ongoing in the first half of 2021 and as a result we
still had many leased and tenanted pubs on a support package of
cancelled, reduced, or minimal rents. These have all been fully
restored in the first
six months of 2022 and it is very gratifying that all our pubs
made it through the most difficult set of circumstances.
Our retail business continues to make good progress and its
performance in the first half of the year is ahead of last year.
Our shops are developing into hubs that not only distribute our
online orders within a 15-mile radius but serve bars and
restaurants with a fast delivery service for Adnams beers, spirits,
and wines and we see this as a model for future development. Our
shops are largely located in interesting buildings and locations
and have not suffered the dramatic falls in footfall experienced in
larger towns and cities.
In the wider beer market, we have seen a recovery in the
on-trade and rising sales volumes through from early in the year to
May, albeit that the cask beer market remains somewhat subdued.
June promised much with the Jubilee, but it turned out not to be
the wonderful on-trade event everybody was hoping for. We have
worked hard during the period to manage our cost base tightly and
preserve margins. Much of this work has been successful and we have
seen an improved result across our beer and spirits distribution
channels. Our primary focus remains on our core products Ghost Ship
4.5%, Ghost Ship 0.5% and our Copper House Gin range. Our
investment in the low/no alcohol reverse osmosis plant in 2018 has
proven to be prescient as that segment of the market remains in
strong growth and I am pleased to say that Ghost Ship 0.5% is now
our second largest beer product behind its full alcohol
sibling.
Our outlook for the full year remains cautious. Our long-term
investments in sustainability and sustainable production have
served us well. However, we are not completely immune from what is
going on in the wider world. We are a relatively large consumer of
energy, water, and raw materials in our manufacturing business and
like others across our industry we are currently seeing only upward
pressure on global energy and cereal prices, packaging and fuel
costs and interest rates. As I write this report, the Governor of
the Bank of England is talking very candidly about the likelihood
of a long recession and the global geopolitical situation remains
very concerning. We also face pressure on wages as the costs of
living for staff and their travel to work costs substantially
increase. Much of this is also true for our leased and tenanted pub
estate, and we will be working closely with them in the coming
months to ensure the wider Adnams organisation successfully
navigates its way through these troubling economic times. This
situation is really the last thing our industry needed after the
previous two years, and we are highly conscious as to how much cost
can realistically be passed directly through to the customer before
a visit to the pub becomes too expensive. As ever we shall approach
the issues with cool heads and our values front of mind as we
navigate our way through this latest set of challenges underpinned
by a strong brand, loyal customers and committed teams.
In my annual report last year, I stated 'whilst the company
wants to return quickly to 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'. I am pleased
therefore that we were able to pay an interim dividend in February
this year of 156p per 'B' share and 39p per 'A' share in
recognition of our strong trading in the Spring and Summer of the
previous year and that fact that the Company did not pay a final
dividend in relation to 2019, or any dividend in 2020 and 2021.
Despite somewhat gloomy economic news, 2022 is also a year for
celebration. September sees the company's 150th anniversary and our
Broadside beer become 50 years old. Both events that are worthy of
raising a toast. Thank you for your continued loyal support.
Jonathan Adnams OBE
Chairman
At the time of preparation of this Chairman's report, we were
deeply saddened to hear of the passing of Her Majesty Queen
Elizabeth II. The Queen has reigned for longer than any other
Monarch in British history and was loved and respected across the
globe. Adnams has been deeply connected with her through our 3
successes with the Queens Award for Enterprise, Sustainable
Development. We are immensely thankful for her lifetime of
dedicated service and her extraordinary legacy. She has been a
symbol of all that is great about Britain.
Profit and loss account
For the six months ended 30 June 2022
Unaudited
Unaudited 6 months
6 months to 12 months
to 30 June to
30 June 2021 31 December
2022 (Restated) 2021
Notes GBP000 GBP000 GBP000
--------------------------------------- ----- ------------- ----------- ------------
Turnover 30,075 20.518 57,368
Other operating income 2 - 1,933 1,938
Operating expenses (30,789) (25,537) (60,204)
--------------------------------------- ----- ------------- ----------- ------------
Operating loss (714) (3,086) (898)
Loss on disposal of assets - - (4)
--------------------------------------- ----- ------------- ----------- ------------
Loss before interest and taxation (714) (3,086) (902)
Interest (275) (187) (352)
Other finance charge on pension scheme (30) (67) (134)
--------------------------------------- ----- ------------- ----------- ------------
Loss before taxation (1,019) (3,340) (1,388)
Tax on loss 3 208 185 (254)
--------------------------------------- ----- ------------- ----------- ------------
Loss (811) (3,155) (1,642)
--------------------------------------- ----- ------------- ----------- ------------
Loss per share 4
'A' Shares of 25p each, inc. asset
disposals (pence) (43.0)p (167.2)p (87.1)p
'B' Shares of GBP1 each, inc. asset
disposals (pence) (172.0)p (668.6)p (348.3)p
'A' Shares of 25p each, exc. asset
disposals (pence) (43.0)p (167.2)p (86.9)p
'B' Shares of GBP1 each, exc. asset
disposals (pence) (172.0)p (668.6)p (347.6)p
Balance sheet
As at 30 June 2022
Unaudited Unaudited
30 June 30 June 31 December
2022 2021 2021
GBP000 GBP000 GBP000
------------------------------------------ --------- --------- -----------
Tangible Fixed assets 37,792 39,540 38,913
Current assets
Stocks 10,463 8,889 9,779
Debtors 5,447 6,448 4,202
Cash at bank and in hand 44 1 1
------------------------------------------ --------- --------- -----------
15,954 15,338 13,982
------------------------------------------ --------- --------- -----------
Creditors: amounts falling due within one
year (15,705) (15,716) (13,439)
------------------------------------------ --------- --------- -----------
Net current assets/(liabilities) 249 (378) 543
------------------------------------------ --------- --------- -----------
Total assets less current liabilities 38,041 39,162 39,456
------------------------------------------ --------- --------- -----------
Creditors: amounts falling due after more
than one year (10,192) (10,188) (9,867)
Provision for liabilities (414) - (623)
------------------------------------------ --------- --------- -----------
(10,606) (10,188) (10,490)
------------------------------------------ --------- --------- -----------
Net assets excluding pension liability 27,435 28,974 28,966
Pension liability (5,005) (11,243) (4,988)
------------------------------------------ --------- --------- -----------
Net assets including pension liability 22,430 17,731 23,978
------------------------------------------ --------- --------- -----------
Capital and reserves
Called up share capital 472 472 472
Share premium 144 144 144
Profit and loss account 21,814 17,115 23,362
------------------------------------------ --------- --------- -----------
Equity shareholders' funds 22,430 17,731 23,978
------------------------------------------ --------- --------- -----------
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. The 2021 full year accounts were audited. The accounting
policies are unchanged from 2021. Given the major uncertainties at
this time, few businesses can have absolute confidence in their
long-term position. We continue to manage cash carefully in the
business and have concluded, based on our cash management over the
past few months and our current projections, that Adnams continues
to be soundly based thus the adoption of the going concern basis in
these accounts is justified.
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 GBP471,842. The earnings per share calculation is the
same for basic and diluted earnings.
5 Dividend
The directors of Adnams plc (the "Company") resolved to pay an
interim dividend in recognition of:
(a) the continued support of the members of the Company during
the pandemic;
(b) the fact that the Company did not pay a final dividend in
relation to its financial year ended 31 December 2019 or any
dividend in relation to the financial year ended 31 December 2020
or 2021;
(c) our strong trading during the Spring, Summer and Autumn of
2021; and
(d) the confidence we have in our business as we emerge from the
pandemic.
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END
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