Shareholder backing for Adnams board
SOUTHWOLD brewer Adnams said it had received “huge” support after it came under fire from one of its shareholders. Guinness Peat Group (GPG) wrote to other shareholders in the run-up to Adnams' annual general meeting held yesterday blaming the brewer's performance last year on poor corporate governance after its operating profits fell 64%.
SOUTHWOLD brewer Adnams said it had received “huge” support after it came under fire from one of its shareholders.
Guinness Peat Group (GPG) wrote to other shareholders in the run-up to Adnams' annual general meeting held yesterday blaming the brewer's performance last year on poor corporate governance after its operating profits fell 64%.
However, an Adnams spokeswoman said yesterday: “We had over 250 shareholders attend and there was overwhelming support for the board.”
In a statement to shareholders yesterday, Adnams chairman Jonathan Adnams described the financial result for 2008 as “disappointing” but said it believed it was “continuing to do the right things”.
GPG sought to blame the drop on the family management of the company, and in particular the decision to invest millions of pounds in a new energy-efficient brewery, an eco-friendly distribution centre and an expansion of its Cellar & Kitchen retail business, and called for a change in the way shares are structured.
It claimed last year's results were “so poor as to suggest that the substantial expansionary investment projects sanctioned by the board since 2000 have actually weakened rather than strengthened Adnams' traditional brewing and pub businesses in East Anglia”.
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But Mr Adnams, who last week strongly refuted GPG's criticisms and rejected some of its points as “inaccurate” said they had pressed ahead with developments that were “important to the future of the company” and continued to receive widespread external recognition.
“2008 saw the most extensive economic turmoil since the Second World War and events called into question the business practices of many institutions,” he said.
“In such times it is all the more vital that those, like this company, who are committed to doing the right thing, continue to keep their eyes focused on the longer term and are not distracted by short-termist overtures.”
He pointed out that the recent history of the beer market had been one of decline, and cask beer had been in decline for a long period, although they were beginning to see positive signs.
“At the end of April our total sales of Adnams beer will be just over 1% ahead of where they were a year ago. Adnams beer volumes in its tenanted pub estate are up by 4.2% on a like-for-like basis,” he said.
“Our Cellar&Kitchen stores have also had a strong start to 2009 and their turnover in the first quarter is up by 22%, after excluding the impact of the store in Richmond, which opened last April.”
Adnams was “appropriately cautious” given the economic climate, and noted the beer duty hike delivered last week.
“Whilst there seems little doubt that economic turbulence will continue for some while yet, we believe that Adnams has been responding appropriately. We have managed our cost base in line with more difficult times, we are supporting our pub tenants, last month we acquired three very fine new pubs and we are starting to see some encouraging signs in our sales,” said Mr Adnams.