Adnams sets out growth plans

SOUTHWOLD brewer Adnams has outlined “ambitious” plans to more than double operating profits over the next five years, despite warning of a more challenging trading environment for the immediate future.

SOUTHWOLD brewer Adnams has outlined “ambitious” plans to more than double operating profits over the next five years, despite warning of a more challenging trading environment for the immediate future.

Speaking at the company's annual general meeting, executive chairman Jonathan Adnams said its infrastructure and brand development work of recent years had positioned Adnams well to capitalise upon the growing market for green, ethical and fair-trade goods - currently valued at £15 billion and growing at 9% a year.

“Adnams has credibility and a strong reputation in this market, not only for the innovative nature of our infrastructure renewal but also because of our products,” he said.

“Last week we were proud to launch East Green, the UK's first carbon neutral beer in 500-plus Tesco stores. Our wine portfolio is also something about which we are very proud with around 20% of the range being either organic or biodynamic.


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“We have an ambitious strategic plan in place to more than double operating profits over the next five years and believe that by building on the strength of the Adnams brand and by our commitment to doing the right thing we will be able to deliver improving value for shareholders.”

Adnams, which has invested more than £10million over recent years in new environmentally-friendly brewing and distribution facilities, last month announced an operating profit of £4.2million for 2007, up 2.6% on the previous year, on turnover of £47.4million, an increase of 2.8%.

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Mr Adnams told shareholders at the meeting that the company had “demonstrated its resilience and exciting potential by growing turnover, profits and market share in what was an extremely difficult year for the drinks industry”, including the start of the smoking ban, poor summer weather and increasing raw material costs.

Looking to the current year, Mr Adnams said: “Adnams has entered 2008 in a stronger position than ever. However, the operating environment has become more challenging and uncertain.”

The brewing and brands business was maintaining volumes and growing market share in a beer trade being hit hard by declining consumer confidence - made worse by the “penal” increase in duty rates announced in the Budget.

On the leisure retail side, operations were “growing well” as the company continued to increase its chain of Cellar & Kitchen stores, although consumer caution was also making trading “more difficult than was recently the case.”

Mr Adnams also warned that recent moves to expand and strengthen the company's teams in order to achieve its growth plan would result in increased costs in its half-year results.

However, he added: “We believe Adnams is well-positioned to meet the challenges of 2008 and overall we look to the long-term future with confidence.”

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