Strong sales of weak beer are helping keep 152-year-old British brewer Adnams plc (AQSE:ADB) afloat, as the low-alcohol version of its Ghost Ship ale drove an increase in revenues in what was a retreating market.
The Suffolk company reported a 32% increase in turnover to £31.9 million for the first half of 2024, helping it cut operating losses almost a third to £1.8 million.
Off-trade sales, that is via supermarkets and off-licences, grew 2.7% while the overall beer market declined 6.8%.
Ghost Ship's 0.5%-alcohol version drove the majority of these gains, Adnams said, and across the brewing and pubs business sales volumes of the booze-free tipple leapt 12.5% and revenues 13.3%. It noted that one in three visits to pubs and bars are now alcohol-free.
The on-trade, ie pubs, continued to struggle across the market, with the company's sales falling 6.9% and the market down 3.9%.
Despite growing customer numbers at Adnams-run pubs, a trend of declining orders in pubs has continued, it said, with sales to other pubcos and wholesalers seeing even greater pressures. Efforts to stem this downward trend are being worked on.
As well as the challenges of the wider market, the company is battling to find a solution to its medium- and long-term finances, with a spending review being carried out by the board, led by chief executive Jenny Hanlon since July.
The prime focus is on cash generation to try and strengthen its balance sheet, which shows a negative cash position of £1.3 million and creditors falling due to be repaid within one year at £28.3 million.
"Our asset disposal programme is now underway, and the funds realised will be used to reduce our debt," said interim chairman Simon Townsend.
"This, together with our best-ever product line-up, will allow us to explore multiple growth opportunities to utilise our brewing capacity, drive top-line sales and build back to profitability."