Adnams announced £7m expansion as it celebrates strong year

By Arabella Mileham

Published: 25 March, 2015

Adnams has announced a major expansion of its Suffolk brewery and distillery as it celebrates strong sales in 2014.

The Suffolk brewer and distiller is investing £7m in its brewery over the next three years to boost capacity, including £500,000 to enlarge its distillery. Scheduled to be operational by January 2016, the new distillery will have two new pot stills and extra storage tanks installed.

The news comes off the back of strong sales to the end of 31 December 2014. The company saw turnover rise 9.1% to £66m, with operating profits seeing a 14.7% boost. Spirits volumes rose 37% and there was also volume growth across its beer portfolio, up 9.7% to a record 95,000 barrels. Although its primary business is cask ales, non cask-ale sales also grew 15% in the last year, driven by strong growth in kegged beer. There was also continued growth in bottled and canned, albeit at a slower rate.

Chairman Jonathan Adnams said the retail business had been one of the "successes of 2014", with around half of the sales coming from the brewery's own products. Two outlets were closed in 2014, at Bloomsbury and Waterside, but he noted that the strong trading at its new Aldeburgh shop, which it said may provide a blueprint for smaller units elsewhere. Further pop-ups are also being considered.

Net debt also fell, down £2.7m to £8m.

Adnams' Cellar & Kitchen store in Bloomsbury is helping boost the retail side of the business, where sales grew 6% in 2013.

Adnams said the company had benefited from the improving economy and the cut in the rate of beer duty last year.

"We have still seen an exceptionally large hike in duty rates since 2008, but the smaller reversals that we have seen in this trend in the last two years have definitely helped to improve some confidence for the future," he said.

"The economic outlook is by no means certain, however we are making a confident statement in announcing the start of a major and innovation project to expand and improve our brewery and distillery."

It also confirmed that operations director Karen Hester and Adnams Charity trustee Guy Heald will join the Adnams board at the AGM.