Suffolk brewing and hospitality group Adnams is toasting a 6.4% lift in sales as it looks to shed some of its non-core assets to relieve debt pressures.

The celebrated Southwold beers and pubs brand has released its half-year results showing £32m of sales to the end of June but continued losses following a tough time for the business.

Its unaudited loss before tax was nearly £2.6m for the first six months of this year compared to £3.1m over the same period last year.

Last year, despite a 3% rise in sales, its pre-tax loss rose to £4m, following losses of £2.3m in 2022.

It has been seeking to raise additional capital from another party and/or the sale of freehold assets. It has also cut its non-wages costs by about £1.9m.

A search for suitable funders continues - after it rejected funding proposals which it said were "not sufficiently attractive to merit further consideration".

The business has undergone big changes in recent months. Long-serving chief executive Andy Wood stood down at the group's annual general meeting held at Snape in June and was succeeded by Jenny Hanlon. 

Then in September, its chairman, Jonathan Adnams, announced he was retiring with immediate effect for health reasons and Simon Townsend was appointed interim chair.

However, this year its off-trade (or shop) sales have grown - lifted by a record first half for its contract brewing and distilling and revenues from its Ghost Ship 0.5 up 13.3%.

The increased revenues and effective cost control helped it to cut its operating losses by 29% to £1.8m compared to the first half of 2023, it said. But given the ongoing losses, the board did not recommend an interim dividend.

It aims to rebalance its debt levels by divesting non-core assets while holding on to "assets critical to its future success", it said. It was also focused on new sales growth initiatives.

"Looking ahead, with improving consumer confidence, an improving cash position and a strong product line-up with further innovations coming to market, the company is optimistic of utilising more of its brewing capacity, delivering improving sales growth and returning to profitability," it said.

Interim chair Simon Townsend said the business had continued to make progress on a number of fronts during the first half of 2024.

"The funding review continues to be progressed, which, given its long-term nature, has implications not just for shareholders but also for our colleagues, customers and communities, where Adnams plays an important role as both a local employer and a significant contributor to the region’s tourism economy," he said.

"While proposals to provide additional funding were made, the associated cost of capital meant these were not sufficiently attractive to merit further consideration.

"In the short-term, the company will focus on divesting non-core assets as part of a strategy to rebalance debt levels while preserving those assets critical to our future success, alongside continuing to focus on sales growth across all channels."

A fall in inflation to 2.2% and a recent interest rate cut augured well for consumer confidence in the second half of the year, he added.

But he added: "Only time will tell if this translates into a growing propensity to spend."

On-trade - or pub/restaurant - sales continued to struggle this year, with the market down by 3.9% and Adnams' own sales falling by 6.9%.

Ghost Ship 0.5 was a "star performer" product as the trend for no and low alcohol beverages continued, he added.

"Today, one in three visits to pubs and bars are alcohol-free, and two in three visits involve a non-alcoholic drink of some kind."

Adnams' managed and tied properties delivered stable results, with growth marginally up on the previous year while its two hotels in Southwold achieved occupancy levels "significantly above" pre-covid times.

The company has also undertaken a significant rebranding of its core beers in collaboration with local artist Vanessa Sorborne which helped boost sales, said Mr Townsend.

"With consumer confidence and general economic conditions appearing more positive, our asset disposal programme is now under way, and the funds realised will be used to reduce our debt," he said 

"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.