- Adnams seeks financing amid crisis
- Industry faces insolvency challenges
- Alvarez & Marsal advisors engaged
The Southwold-based brewer, established in 1890, has appointed Alvarez & Marsal to investigate financing alternatives amid the industry-wide cash crunch.
Amid an industry-wide wave of insolvencies, Adnams, one of the most illustrious names in British brewing, has enlisted the assistance of City advisers to secure additional capital.
Adnams is collaborating with Alvarez & Marsal (A&M) on various financial stabilisation strategies. According to sources familiar with the situation, these would almost certainly involve private capital injections from high-net-worth investors or family offices. They added that considering the transfer of a portion of Adnams’ freehold assets from its estate of pubs and inns would also occur.
The plan aims to raise capital to finance additional growth initiatives and reduce bank debt. The Southwold-based company attempted to dispel rumours of a possible outright sale over the weekend, contrary to speculation by some industry figures in recent weeks.
A representative from Adnams, whose B-shares are listed on the junior stock exchange Aquis, stated, “To finance our future growth initiatives, we have directed advisers to investigate a variety of alternatives.”
Adnams Navigates Market Pressures
Dr Jonathan Adnams, the long-serving chairman and a member of the company’s founding family, informed investors several months before A&M’s appointment that ongoing inflationary pressures were negatively affecting consumer demand. Operating losses for the first half of the company’s fiscal year increased to £2.4 million from approximately £30 million in revenue.
Dr Adnams cited the continuous decline in the number of taverns throughout the United Kingdom and the 25% contraction in the cask beer market since 2019 as evidence. However, an Adnams insider reported that January trading was “extremely positive” due to signs of returning consumer confidence and a gradual reduction in input cost increases.
“Unlock your financial potential with free Webull shares in the UK.”
Prominent offerings from Adnams include Broadside strong ale, Kobold lager, and Blackshore stout. Additionally, the company has expanded its product range to include low-alcohol and no-alcohol beers. Ghost Ship, with an alcohol content of 0.5% ABV, has become one of its most popular offerings, especially during the ‘dry January’ period that many consumers anticipate.
Adnams: Expansion and Industry Challenges
Adnams has also expanded its brand recognition to include a selection of wines, gin, and whisky. Although the organisation was founded in 1890, it was 18 years earlier when George and Ernest Adnams, two family members, acquired the Sole Bay Brewery. The founding family continues to hold the largest stake in the company, with Chairman Dr Adnams owning an estimated 20% stake.
Since 2010, Andy Wood, who joined the company in the mid-1990s, has served as its chief executive officer. Simon Townsend, a former CEO of pub giant Ei Group, and seasoned marketer Steven Sharp are among the distinguished members of Adnams’ board of directors. Sacha Berendji, a senior executive at Marks & Spencer and a non-executive director of the brewery, is also a board member.
Its Aquis-listed shares have declined by approximately two-thirds over the past year, although its £9 million market capitalisation is misleading because only a tiny fraction of its shares are traded.
The pursuit of additional funding comes in response to a series of insolvencies within the brewing industry. Black Sheep, based in Yorkshire, entered administration last year before Breal, an investment firm, acquired the company. Breal has since acquired several other troubled companies, including the owner of Session IPA, Purity Brewing Company. North Brewing Co., based in Leeds, also entered administration last month before its sale to a regional industry executive.
