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Adnams open for sale as brewing sector faces funding shortage

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Adnams, one of the most historic names in British brewing, is considering an outright sale amid a funding crunch in the industry that has sparked a growing wave of insolvencies.

Sky News has learned that Adnams began contacting investors and potential buyers after hiring advisers earlier this year to shore up its finances.

A source close to the 134-year-old Suffolk brewery has admitted a full sale of the business is now an option, after indicating last month it was not being considered.

They insisted, however, that Adnams’ preferred method of raising capital remained an injection of funding from a wealthy investor or family office.

The sale of some of its freehold assets from its pub and inn heritage would also be considered, they added.

The aim of the plan would be to raise capital to pay down bank debt and finance new growth initiatives.

Alvarez & Marsal advisors work with the company, which remains partly owned by members of its founding family.

A spokesperson for Adnams, whose B shares are listed on junior stock exchange Aquis, told Sky News last month: “We have asked our advisers to explore a range of options to fund our future share plans. growth.”

He declined to comment further on the possibility of a sale.

A&M’s appointment comes several months after Dr. Jonathan Adnams, the company’s longtime chairman, told investors that persistent inflationary pressures were having a detrimental effect on consumer demand.

Operating losses in the first half of its financial year increased to £2.4m on flat revenues of around £30m.

Dr Adnams highlighted the continuing decline in the number of pubs across Britain and a 25% drop in the size of the cask beer market since 2019.

Adnams’ best-known products include a strong beer called Broadside, Kobold lager and Blackshore stout.

It has also diversified into the non-alcoholic and low-alcohol beer categories, with Ghost Ship, a 0.5% ABV product, now among its best-sellers, notably during the “dry January” adopted by many many consumers.

The Adnams name now also graces a range of wines, such as Tally-ho, as well as gin and whisky.

The company was founded in 1890, although family members George and Ernest Adnams had originally purchased the Sole Bay Brewery 18 years earlier.

The Adnams family remains the company’s largest shareholder, with Dr. Adnams, the chairman, holding an approximately 20% stake.

The company is led by Andy Wood, who joined in the mid-1990s and became chief executive in 2010.

Last week it announced that Mr Wood would be replaced in June by Jenny Hanlon, its chief financial officer.

In the announcement, Ms. Hanlon said it was important to “continue to evolve and innovate – our brand and product portfolio, our brewing, distilling and distribution operations and our field – while continuing to support our customers, our communities and our colleagues with the same values ​​and commitments that have served us so well.”

Dr. Adnams described her as “the ideal candidate to lead us through the next chapter in Adnams’ evolution, both stabilizing our financial foundation but also capitalizing on Adnams’ unique strengths.”

Adnams has an illustrious board including marketing veteran Steven Sharp and Simon Townsend, the former boss of pub giant Ei Group.

Sacha Berendji, a senior executive at Marks & Spencer, is also a non-executive director of the brewery.

Its shares listed on Aquis have fallen by around two-thirds over the past year, although its tiny market capitalization of just £9m is misleading as only a small proportion of its shares are traded.

The search for new capital comes after a series of bankruptcies in the brewing sector.

Yorkshire-based Black Sheep went into administration last year before being bought by Breal, an investment company.

Breal has since acquired a number of other struggling players, including Purity Brewing Company, owner of Session IPA.

Leeds-based North Brewing Co also fell into administration earlier this year before being sold to a local industry executive.

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