Proactive Investors - 152-year-old British brewing stalwart Adnams PLC (AQUIS:ADBA) has confirmed a weekend report from Sky News that it is scrambling to secure fresh funding for the business.
According to “people close to the situation”, the Suffolk-based brewer, whose popular ales include Ghost Ship and Broadside, engaged Alvarez & Marsal to advise on a range of options including private capital injections from high-net-worth individuals and family offices.
Adnams confirmed the press rumours in an RNS, stating: “Following media speculation, the board of directors of Adnams plc wishes to clarify that the Company has instructed advisors to explore a range of options to fund the company's future growth plans.
“As a business of more than 150 years, and ever mindful of the challenges faced by the hospitality and brewing industries in recent times, the company is continually proactive in seeking ways to ensure that the business is even more resilient for the years to come.”
Aquis-listed Adnams shares, which were already more than 60% lower year on year as of yesterday’s close, were poured another 14% lower to 2,500 today.
Interim reports published for the six months ending 30 June 2023 showed a 0.28% fall in revenues and a 200% year-on-year increase in losses before tax to -£3.13 million.
The company had £17.4 million of liabilities due within the year.
“The UK economic situation remained challenging in the first six months of the year with inflationary pressures continuing to persist and interest rates remaining stubbornly high,” said chairman Dr Jonathan Adnams at the time.
“This has led to sales across the sector remaining almost 15% below pre-pandemic levels (source UK Hospitality). Lower levels of consumer confidence endure with around 35% of people saying they were going to spend less on going out (source: UK Hospitality) and KPMG citing in April this figure may be as high as 65% (source: KPMG, April 2023).
“Consequently, we continue to see the number of UK pubs continue to fall with the current 46,000 down some 15% from a decade ago (source: British Beer and Pub Association) and the cask beer market around 25% smaller than 2019.”
The founding family remains the company's largest shareholder, with Dr Adnams holding 20% of the shares.
Adnams currently has a market capitalisation of £7.15 million.