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Chapel Down reports strong sales growth

Sales of wine and spirits were up 11% to £8.97 million in the year to 31 December 2018, while the company’s beer and cider arm – Curious Drinks, posted a 10% increase in sales to £4 million.

Gross profit for the group was up 9% to £4.9 million, but the English winemaker however made a loss before tax of £850,328 compared to £243,115 profit for the previous year as it invested in expanding its operations.

The company said it had also been “slightly affected” by the collapse of Conviviality last year.

“Along with many other drinks businesses our performance was slightly affected by the collapse of Conviviality, but we are pleased to see the recovery under C&C,” said Chapel Down chief executive Frazer Thompson.

Like-for-like earnings before interest, tax, depreciation and amortisation (EBITDA) was up 18% to £1.1 million.

“With sales growth of 10% in the group we are able to invest the proceeds to build the business whilst still delivering growth in like for like EBITDA,” said Thompson.

“With eight years of strong compound revenue growth of 22% per annum, Chapel Down is now developing to become a player with serious potential in growth markets. We are seeing good demand for English sparkling wines in sophisticated international markets and we enjoyed our second full year in the US and growth at present is limited only by our production,” he said.

Nevertheless, its key market remained the UK and managing and servicing its customers better to "ensure we turn awareness and desire for Chapel Down and Curious into profitable sales remains our key challenge”, added Frazer.

“We were blessed with an extraordinary harvest this year. Our average yields per acre were up some 97% and with the addition of new plantings starting to produce, our vineyard and winemaking team were able to secure well over double the volume of fruit in good condition to enable us to build our stocks and to start to satisfy the excess demand for our wines.”

Last year Chapel Down planted a further 102 acres of new vineyards, taking the total planted on long term leased land to 274 acres since 2015. It also completed on the lease of a further 388 acres of viticultural land adjoining existing vineyards on the North Downs in south east England, which is expected to produce up to one million extra bottles of wine per year.

This month, the company opened a new brewery in London t boost beer and cider sales in the year ahead. It was also “optimistic” about continuing growth in wine sales in 2019, it said

“We will continue to make substantial investments over the coming years in planting more vineyards, developing our winery, improving our commercial infrastructure, hiring and training the best talent and creating smart effective marketing to ensure that we build the strongest quality brands and are therefore best placed for future growth and any industry consolidation.”

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