Producer Adnams of Ghost Ship movie significantly reduces financial losses.
Suffolk-based alcohol producer Adnams announces reduced losses as part of a commercial turnaround plan, although retail sales continue to face challenges. Adnams, known for its cask ales, bottled beers, and spirits, reported sales growth of 3% to £68.1 million in the year ending December 31, 2024.
Despite the overall sales growth, the operating loss has been more than halved, falling from £2.5 million in 2023 to £1.1 million in 2024. Similarly, the pre-tax loss decreased from £4 million in 2023 to £2.7 million in 2024. The company noted that revenue increased across all business areas, except for retail trading, which remained challenging.
Adnams has initiated a commercial turnaround plan to boost revenue growth and profitability, with the 2024 performance indicating the initial stages of its plan. Simon Wood, the interim chair, expressed disappointment with the retail sector's performance, which necessitated a comprehensive review of product and service costs.
In terms of market performance, Adnams' cask ale volumes saw a decline of 5.3% against a market decline of 7.6%. Off-trade ale volumes experienced a slight decrease of 0.3%, performing better than the wider industry with a 6.3% decline. On-trade ale volumes dropped 5.8%, albeit with an improvement in performance noted throughout the year.
The company underwent several board changes in 2024, including the appointments of Simon Townsend as interim chair and Jenny Hanlon as CEO. The management anticipates the benefits of their commercial turnaround plan to flow into the financial performance in 2025 and beyond, as Adnams navigates the immensely challenging market environment and strives to become more commercially competitive.
While the financial improvements are noteworthy, the current debt level of around £15 million is considered unsustainable, with the company focusing on continued asset disposals to lower borrowings and withholding dividend reinstatement until earnings can support the debt. Additionally, while EBITDA has improved, it remains below the level representative of the company's potential, highlighting lingering profitability challenges.
In light of the financial improvements, Adnams' management is striving to make the business more commercially competitive within the industry, with the anticipation of further profitability gains in the future as they navigate the challenging market environment. The current debt level of around £15 million is considered unsustainable, and the company is focused on reducing borrowings through asset disposals and withholding dividend reinstatement until earnings can support the debt.
