UK: Adnams profits under pressure but beer sales rise
- Half-year net profits rise by 6% to GBP462,000 (US$763,000)
- Operating profits slip by 2% to GBP812,000
- Net sales up by 6% to GBP24.5m
- Own-beer volumes increased by 2.5% for the six months.
Adnams profits pressured as competition hots up in beer
Adnams has outperformed the lacklustre UK beer market in the first half of 2011, but profit margins at its beer business are under pressure from higher costs and stronger competition.
Adnams' net sales rose by 6% for the six months to the end of June, to GBP24.5m (US$40.5m). Own-beer volumes rose by 2.5%, compared to a UK beer market that sank by 7% over the same period, the brewer, pub owner and wine merchant said today (18 August).
Bitburger lager performed particularly well, with volumes up by 4.4%. The group also reported resurgent demand in its take-home beer business, partially boosted by the sale of five-litre mini casks at its retail stores.
However, Adnams warned that it faces a fight to maintain its premium positioning in beer. "The reality of the beer business in the UK is that consumption has been falling year by year and producer numbers have increased, with a continuing influx of tax-subsidised small brewers," it said. "Pressure on margins is an inevitable consequence."
In its wine and shops business, Adnams reported net sales up by 22% on the same period of 2010. Online wine sales also performed strongly.
In its overall business, Adnams reported operating profits down by 2% for the first-half, to GBP812,000. Half-year net profits rise by 6% to GBP462,000.
For the company's announcement, click here.
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