Adnams made the following comments at their AGM on the 27th April 2017.
Underlying trading is encouraging with continuing strong growth in our sales of beers and spirits, notably Adnams Ghost Ship and Adnams Copper House Gin.
Our enlarged estate of managed inns has traded well so far this year, as have our shops and our leased and tenanted pub estate.
The sale of some of our smaller and less profitable pub outlets has meant some decline in overall profitability from this part of the business. Second half 2016 results were affected by the depreciation of Sterling and by lower turnover following the sale of our UK distribution rights for Lagunitas beers. These impacts have continued into 2017.
2017 will be a year of substantial investment for Adnams. The Swan Hotel closed at the start of the year for a major renewal project which will see it transformed into a top-quality hotel celebrating the Adnams brand and its historic place in the center of Southwold. Building works have been delayed by four months following the discovery of asbestos. Removal expenses have added about £0.5 million to the project cost, but our previous estimate of the total cash cost of this project of £6 million remains broadly correct. There will be an impact on 2017 profits, including our half year outturn, resulting from this important business being closed until the autumn.
Our second substantial 2017 investment is the £7 million project in our brewery, which is now close to completion. This will extend capacity and provide us with beer conditioning, filtration, enhanced cooling and an automate kegging line.
Political uncertainties have become almost the norm in recent years and we are now approaching an unexpected general election. Nonetheless, Adnams has a firm commitment to the long-term and we will continue to invest on that basis.