Suffolk brewer, distiller, retailer and pub firm Adnams has hailed 2016 as a record year, with sales up 7% to £70.3m and beer volumes up 9%.
Pre-tax profit rose 23%, reaching just over £5m, driven mainly by the profits it made on the sale of the UK distribution rights for Lagunitas beer. Operating profit was down 3.8% to £3.9m.
The company, which has around 50 pubs across East Anglia, one in London and two hotels, said beer volumes passed the 100,000 barrels mark for the first time. Adnams' beer brand Ghost Ship overtook Southwold Bitter as its best-selling beer for the first time, and is one of the UK's fastest-growing pale ales, according to the company. Meanwhile, its spirit volumes were also up by 66% following investment in its distillery and an increase in capacity.
In recent years, the company has gradually reduced its leased and tenanted pub estate, selling smaller and less viable properties as customer habits have changed and many of its more rural outlets have struggled.
Like-for-like sales in the pub estate increased 2.6% over the year, as the average quality of its sites improved following disposals.
The group's Swan hotel in Southwold, where it is based, closed at the start of 2017 for a major refurbishment. The company said: "We see this as a ‘once in a generation' opportunity to transform our historic hotel and create a gateway to the Adnams brand in the heart of Southwold. The refurbished Swan will celebrate the character and heritage of the building and at the same time will showcase the modernity of our brand and our products. It will be shut for over six months. The Cygnets building behind the hotel will be transformed into a hub for our brewery and distillery tours and will welcome approximately 16,000 visitors each year. The closure will have a material impact on our 2017 results as we will miss income from this property during the refurbishment work."
However chairman Jonathan Adnams (pictured) branded the 3.9% increase in beer duty announced in the March 2017 budget as a "disappointing relapse" and said: "We hope that it does not signal a return to a period of damaging duty hikes".
On the issue of Brexit, he added: "2016 was a momentous year for the UK with the vote to leave the European Union and there were many predictions of economic downturn. So far, at least, these have not been borne out. The economy has been reasonably robust, though the overall beer market has continued its long downward trend and pubs continue to close."
He added: "I observed earlier that the economic climate in 2016 was better than many expected. There are, at the start of 2017, similar concerned voices and a worry that inflation induced by currency depreciation will outrun wage growth, leading to a squeeze in living standards and reduced consumer spending. It remains to be seen what happens when the UK leaves the EU. However, our focus will continue to be on the longer term and we are investing accordingly, notably in the brewery and the Swan hotel."
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