Adnams ‘currently evaluating offers’

Adnams is evaluating offers for moving its business forwards with a view to revealing plans later in the summer, telling db that it was “grateful” for customers’ “unwavering loyalty”.

Speaking at its recent AGM, where it also welcomed its new CEO Jenny Hanlon to the helm, the brewer also revealed plans to broaden distribution in both the no and low alcohol sector as well as boost its visibility within English whisky to bolster the business.

The Southwold-based brewery outlined the initiatives as a means to “accelerate its position” by focusing on “greater distribution in the low and no alcohol segment” and “expanding its presence in the English whisky market”.

Challenging

Hanlon, who replaced Andy Wood as chief executive from 1 July, described how “the business has come through some challenging market conditions” but said that Adnams needed to capitalise on its “unique strengths” in order to “drive profitable and sustainable growth”.

She identified how the business had “a well-invested asset base” through its “brewery, distribution centre and pubs” and noted how it also had “a fantastic team of committed people with decades of brewing, distilling and hospitality expertise” as well as “an award-winning line-up of products, and a premium, heritage brand that is punching well above its weight”.

In April, Wood dismissed rumours that Adnams was considering an outright sale of the business and assured that instead it was searching for external investment – short of a full takeover.

Potential

At the AGM, Adnams simply explained the plight for financing as a means of fulfilling the business’s “potential” and described how its next moves were just its “next phase of growth”.

Hanlon explained: “Securing additional capital from a successful funding process would help us unlock this potential, enabling us to both reduce the company’s level of debt and interest costs, whilst enabling us to invest in this next phase of growth.

“Our plan is focused on ensuring Adnams fulfils its potential by becoming a profitable, brand-led, sales-focused organisation that delights its customers with its range of drinks and experiences, and supports its people, communities and environment with its values-based approach.”

Adnams has previously stated that, as part of its funding process, its board is currently evaluating offers based on its agreed framework to determine which route offers the best long-term value for the company and its shareholders, and expects to be in a position to revert to shareholders for approval on its recommendations later in the summer.

Grateful

Speaking to the drinks business about the situation, a spokesperson for Adnams highlighted how it wanted to show gratitude to everyone for their loyalty amidst these challenging times.

The spokesperson said: “In the face of extremely challenging headwinds for the industry, Adnams is grateful to its customers, team and its shareholders for their unwavering loyalty and support throughout the year”.

They also admitted that Adnams always considers  its AGM “an important opportunity for those who care about our brand as much as we do, to express their views” and added: “We welcome and respect that”.

From this month with Hanlon’s appointment as CEO, the brewery spokesperson admitted that it would “enter a new era” and said Hanlon was “focused on driving revenue growth and ensuring the brand continues to innovate and to appeal through the products and experiences it offers its customers”.

At the AGM, Adnams additionally presented a detailed review of its financial performance for the year ending 31 December 2023, highlighting sales growth of 3% to £66.3 million (up from £64.2 million in 2022) – its third consecutive year of post-pandemic growth – which it said demonstrated the resilience of its business and brand in the face of the sector’s multiple and ongoing challenges.

Plus, it showed how sales for the five-month period to the end of May 2024 had accelerated faster, outperforming the market in beer volumes and sales. However, Adnams also reported a loss before tax of £4 million due to “the aggregate impact of cost increases including grain, glass, CO2, energy, wages and financing” and added that, despite this, “falling inflation had eased some costs in the current year”.

Adnams did however assure that by increasing sales, implementing cost reduction measures and showing continued disciplined cost management its approach would support its profit improvement plan in the current year.

To look back at Adnam’s plight and understand why its next steps are crucial for its survival, read more from db here.