Suffolk brewer and pub operator Adnams has been accused of a lack of transparency over its chain of Cellar&Kitchen kitchenware and wine shops.
Last week, in advance of Adnams’ AGM yesterday, the activist shareholder Guinness Peat Group wrote to fellow shareholders saying, amongst other things, that the company should be more open about Cellar&Kitchen.
“The conspicuous lack of disclosure regarding the retail chain is highly unsatisfactory for a venture so far removed from the company’s core competencies as a regional brewer and owner of pubs,” the letter said. It went on to claim that shareholders had “every right to expect transparent reporting of its performance”.
GPG also wants to see the end of the “anachronistic dual share structure” that effectively gives the Adnams family control, and slams investments made in the business by chairman Jonathan Adnams.
But in a letter of response to shareholders Jonathan Adnams maintains that some of GPG’s points “are inaccurate, others a matter of interpretation with which we strongly disagree”.
The letter goes on: “We have had a profitable Cellar&Kitchen store in Southwold for over 20 years and we believe that the expansion of the Cellar&Kitchen outlets is well founded though we have halted further store openings in the current climate. As with any such developments, the returns on investment take time, but we are encouraged by progress to date.”
Adnams says Cellar&Kitchen has enjoyed a good start to 2009, with sales in the first three months up more than a fifth on the same period last year.
However, in the year to December 31 2008 rising costs at the brewer saw operating profits slashed by 68% to £1.5m, on turnover down less than 1% to £47.1m. Pre-tax profits slumped from £7.5m to £1.3m.