Adnams blames ‘disrupted year’ for hit to turnover and profits

Suffolk brewery and drinks producer-retailer Adnams saw turnover dip in the first half of the year, amid a rise in operating losses in part which it blamed on the ‘disruption’ caused by the replacement of its core IT systems.

Turnover fell 2.3% to £34.7 million in the first six months of this year (to 30 June), compared to £35.5m in the previous year, while operating losses also rose 40%, from £557,000 in the same period last year to £780,000. Interest on debt was also up, from £228,000 last year to £257,000 as the brewer ramped up costs to deal with the business change.

This was in part due to the disruption caused by replacing its core systems after 30 years, the brewery said, but there was an impact on online sales, which took a hit, after a new website was rolled out a month based on the new core systems.

Meanwhile beer volume sales rose 2% in the first six months of 2019, ahead of the wider market which saw a 1% decline. This it said was particularly good news given the importance of cask ale to the company, which is falling 5% in the general market. Beer exports were also good, it noted.

However gin sales were down in the first half of the year, following a downward trend first seen in 2018, which it attributed to greater competition in the market following the boom in new smaller distillers and the fragmentation of the market in new gin flavours.

“Demand has continued to grow, but it has been spread over an ever greater range of products and producers and supermarkets are stocking fewer traditional gins as they cater for the ever-growing range of new flavours,” it said.

However it argued that its strategy playing toward the trends in the market – premiumisation, healthy lifestyles, authenticity and experience, despite the uncertainty in the market driven by Brexit.