Adnams toasts rising profits

Southwold brewing and leisure retail group Adnams has posted increased pre-tax profits for the first half of 2011, despite 'difficult' trading in much of the pubs sector.

Revenues for the six months to June 30 grew by 6pc on last year's first half, from �23.12m to �24.51m, although the company said the month-by-month performance had been highly variable.

Operating profit dipped by 1.7pc, from �826,000 to �812,000 but the pre-tax figure came in 9.2pc ahead at �700,000, against �641,000 for last year's first half, largely reflecting reduced interest charges.

'The first half of 2011 witnessed consumer confidence on something of a rollercoaster,' said company chairman Jonathan Adnams.

'Shareholders will recall that we expressed caution at the time of our AGM in early May and we feel that was justified.'

The difficult trading conditions seen in the pub company last year had continued and acquisitions by other brewers – resulting in Adnams being locked-out from supplying the pubs acquired – had also represented a challenge, said Mr Adnams.

Three small pub groups supplied by Adnams had been acquired in quick succession, he said – Geronimo (bought by Young's in December) and Realpubs and Capital (both acquired by Greene King, in April and June respectively).

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However, Mr Adnams said the company's own tenanted estate had 'so far enjoyed a rather better 2011' following a difficult 2010, with own beer volumes 4.5pc up on last year's first half, and Adnams' take-home beer business had also experienced a good first six months,with volumes up 17pc.

The overall volume of own beer sold was 2.5% up, he added, with volumes of Bitburger lager, for which Adnams is UK distributor, 4.4% ahead.

Adnams' hotels in Southwold, the Swan and the Crown, had experienced 'changeable' trading conditions, with May and June being 'notably tough' after a strong April when trade was boosted by exceptionally warm weather.

The management of Fritton House, near Somerleyton, the Victoria Hotel at Holkham and the Gobe Inn at Wells, for which Adnams receives a management fee, had created a steadier stream of income, he said.

Mr Adnams added that the company's wine and shops business had enjoyed a 'very strong' first half in revenue terms, with shop sales up by 22pc in total and by 14pc on a like-for-like basis, excluding the new Norwich shop, although profitability was 'slightly behind' 2010. No new stores had been opened in the first half but the company continued to seek suitable new sites.

Shareholders will receive an unchanged dividend of 65p per B-share and 16.25p per A-share.