Gusbourne Estate set to raise £3.57m from share to boost investment

By Arabella Mileham

Published: 28 May, 2015

English wine producer Gusbourne Estate is looking to raise more than £3.57m to invest in its winery and brand.

This morning the Ashford-based business issued an open offer to its shareholders. The shares are being offered at a fixed price at 50p per share, the company said, a discount of 28.6 % on yesterday's closing middle market price per existing ordinary share.

The funds will be used to further expand production and sales, by increasing capacity in the winery and helping with working capital, which is currently represented in its sparkling wine stocks.

"The production of premium sparkling wine from new vineyards is by its very nature a long term project and requires funding to support the investment in new vineyards, additional winery capacity and stocks," a statement said. "The long term development plans for the business will require further funding over the next few years before it reaches sales maturity and a growing level of investment in wine stocks will become an increasingly important feature of the company's balance sheet."

The new vinyeards are not expected to reach maturity until 2019, and Gusbourne's statement said it would consider both further equity and debt funding to achieve its objectives.

The company is committed to using only its own fruit, which makes it a capital intensive and generated business, Gusbourne's chief executive officer Ben Walgate told Harpers.co.uk. However he said that once production come to full maturity, "we will see substantial growth".

"We are only scratching the surface of what we can do," he said. Currently the company exports to five or six international markets, but Walgate hopes to double this as well as boosting domestic trade. The recent appointment of sommelier Laura Rhys will be key in building and consolidating relationships in the UK trade, as well as forging new export links, he said. "There is growing interest and more [international] enquiries and we are developing an export strategy. But with the volumes at the moment we have to allocate stock to the UK, which is our primary market."

There are also plans to develop the Gusbourne brand, with refreshed packaging, Walgate confirmed. "We are excited about the reboot of the brand. We are investing in packaging and branded items to evolve the Gusbourne brand, although it won't be a major overhaul."

The company statement said current trading was in line with expectations and its development plans remain on course.

In April, it reported sales surging 56% to £434,000 in the 52 weeks to end to 31 December 2014, but there was a net loss of over £1m due to its expansion investment. Capex included the establishment of new vineyards in Kent and West Sussex, to boost its vineyards by 50.7acres as well as additional investment for production equipment.

The company was founded by Andrew Weeber in 2004 and was the first English wine producer to join the Alternative Investment Market (AIM) of the London Stock Exchange, in 2013. Later that year it was bought by Shellproof Plc for £7m and subsequently changed its name to Gusbourne Plc before being re-admitted to AIM.

One of the company's biggest shareholders, Lord Ashcroft is set to maintain his 64.4% interest in the business, the statement confirmed.

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