REG - Chapel Down Group - Audited Results for the year ended 31/12/2023
16/04/2024 07:00
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RNS Number : 6761K Chapel Down Group PLC 16 April 2024
Chapel Down Group Plc
('CDG' or 'the Company')
EPIC: CDGP
AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2023
The Board is pleased to report record company sales, strong profitable growth
and an exceptional harvest for 2023 as it continues to develop its
market-leading brand, both in the UK and around the world.
Financial Highlights
● Net Sales Revenue, gross of retro(1) grew 15% to £17.9m, (2022: £15.6m) and
15% to £17.2m net of retro(1) (2022: £15.0m) as Chapel Down showed continued
sales momentum.
● Chapel Down's brand-defining Traditional Method Sparkling (TMS) wines
continued to grow strongly with Net Sales Revenue(2) increasing 25% to £12.0m
(2022: £9.6m) on volumes up 13% to 887k bottles (2022: 789k).
● Strong NSR growth is across all UK & international trade channels, as well
as the direct-to-consumer business, showing the benefits of scale and breadth
of distribution.
● Chapel Down's Average Selling Price (ASP) grew 13% during the year, evidencing
the continued premiumisation of the Chapel Down brand.
● Chapel Down remains strongly profitable at all levels, driven by profitable
trading and the IFRS fair value adjustment on grapes from an exceptional
harvest:
o Gross profit increased 16% to £8.9m (2022: £7.7m), with an increase in
gross profit margin to 52% (2022: 51%)
o EBITDA grew strongly, up 87% to £5.4m (2022: 2.9m)
● Net debt of £1.2m (2022: net cash £3.3m) resulting from investing in a
record harvest of 3,811 tonnes (2022: 2,050) which has increased wine stocks
by 44% to £22.6m (2022: £15.6m) and the planting of 118 acres (48 hectares)
at Boxley Abbey vineyard. At year end, Chapel Down had an unused Revolving
Credit Facility (RCF) of £12m.
● Strong balance sheet with high quality net assets of £34.3m (2022: £32.3m),
including freehold land and buildings, planted vineyards and stock. The Board
remain confident the market value of these tangible assets is significantly
higher than the reported values. Chapel Down does not assign a value to its
brand in the financial statements.
Operational Highlights
● Successful listing on AIM on 7th December 2023, a move which reflects the
maturity of the business and the ambitious growth plan that we are committed
to delivering in the years ahead and maintains the inheritance-tax free status
of Chapel Down's shares.
● Continued brand leadership with prompted awareness(5) growing to 39% (2022:
32%), and penetration(5) to 14% (2022: 11%). Off trade value market share(4)
was maintained at 35.4% (2022: 35.7%). Social media following grew 13% to over
105k followers across all social channels (2022: 93k). These awareness,
penetration, market share and social media metrics are higher than for any
other English winemaker.
● Favourable growing conditions, combined with the skill of our world-class
viticulture and winemaking team, resulted in an exceptional, high-quality
harvest in 2023. Chapel Down delivered a record 3,811 tonnes of grapes, 86%
higher than 2022 (2,050 tonnes), and 75% higher than Chapel Down's previous
record (2018: 2,173 tonnes). This will create c3.4m bottles of wine.
● Future growth enabled with the planting of the Boxley Abbey vineyard on the
North Downs of Kent. This increases total planted vineyards to 906 acres (367
hectares) (2022: 788 acres, 319 hectares), accounting for nearly 10% of UK
planted vineyards (Source: Wine GB).
● Continued success at international wine awards, with 28 major successes in
2023 reinforcing the exceptional quality of our wines. Highlights include
Chapel Down Kit's Coty Coeur de Cuvée receiving gold medals in the
International Wine Challenge, Decanter World Wine Awards and Wine GB Awards,
and as the 'Best Prestige Cuvée Trophy' in the Wine GB Awards, as well as
Kit's Coty Chardonnay and Bacchus still wines both winning Gold medals in the
Wine GB Awards.
Outlook
● Current trading is in line with management expectations and our outlook for
2024 remains positive. We expect to deliver double digit sales growth in the
year, weighted towards H2. We expect underlying profitability to return to
normalised levels, with an increased proportion of still wine and 'A Touch of
Sparkle' in the sales mix as a consequence of the exceptional 2023 harvest, a
more typical harvest yield in 2024, and continued brand investment.
● As previously announced, our next phase of growth, from 2026, incorporates
plans for a new purpose-built winery, which we expect to be operational in
time for the 2026 harvest (subject to final planning approval).
● Opportunities to secure new vineyard acreage will continue to be explored, as
well as developing an expanded tourism offering at the Tenterden brand home,
to accelerate future growth.
● Planting will begin at our newest vineyard at Buckwell, on the North Downs of
Kent, in spring 2024. This will be 117 acres (47 hectares) of Chardonnay and
Pinot Noir, and will increase our planted vineyards to 1,023 acres (414
hectares).
● To capitalise on our medium-term growth opportunity, we are in advanced
discussions to extend and increase our existing RCF to be drawn when required
as part of the overall mix of funding for our investment plans.
Andrew Carter, Chief Executive Officer of Chapel Down, commented: "2023 was a
landmark year for English wine and Chapel Down. It is great to see the
strategic and operational progress that we have delivered, and the continuing
sales momentum that we have. In line with our 2023 targets, the business
achieved double digit net sales revenue growth, driven by the exceptional
performance of our traditional method sparkling wine and growth across all of
our UK and international trade channels and our direct-to-consumer business.
"Chapel Down continues to grow profitably - a core strength which, along with
our strong balance sheet, makes us resilient and underpins our ambitious
future growth plans.
"Chapel Down is the market leader in an industry which is enjoying rapid and
sustained growth. We have the leading brand, the deepest distribution which we
continue to expand at pace, and we continue to win international acclaim for
the quality of our wines. Our continued outstanding performance, and the
fantastic, record-breaking 2023 harvest, means our passionate and highly
skilled team carries significant momentum into the new financial year."
Note 1:
Chapel Down listed on AIM on 7(th) December 2023. Consequently, the company
has adopted IFRS as its accounting standard. All numbers shown, including
comparatives (except where specified in note 2) are prepared under IFRS.
Note 2:
The IFRS standard requires netting Retrospective discount support (Retro),
which is promotional price support given to customers by Chapel Down, from Net
Sales Revenue ("NSR net of Retro").
Previously, Net Sales Revenue was reported before netting Retro ("NSR gross of
retro"). All channel and category revenue splits in the Financial Highlights
and CEO Strategic Review are shown in this transition year as NSR gross of
retro, to enable like for like comparison.
Note 3:
Adjusted EBITDA relates to profit from operations before interest, tax,
depreciation, amortisation, share based payment expense and exceptional costs.
Note 4:
Source, Nielsen
Note 5:
Source, BrandVue
Chairman's Statement
2023 saw the continuation of the exceptional growth of the English wine
industry. We continue to see the ongoing creation of a new global wine region,
with a number of high quality vineyards, award-winning wines and an increase
in wine-related tourism.
The English wine region's growth is enabled by the excellence of the terroir,
with an abundance of south facing, chalk and clay slopes and a cool maritime
climate that give rise to perfect conditions for traditional method sparkling
wine production. Wine GB estimates that there were 10,695 acres (4,328
hectares) of vineyards planted at the end of 2023, and this is growing
rapidly, up 180% over the past decade. The mid-point of Wine GB's industry
forecast is to have 18,780 acres (7,600 hectares) of vineyards planted by 2032
and wine production increasing from 12.2m bottles in 2022 to 24.7m in 2032.
This quality underpins the increased growth in demand for English traditional
method sparkling wine, with sales growth of 16% in the UK off-trade seen in
2023, whilst comparable UK off-trade Champagne sales(4) value declined by 9%
in the year.
This quality and buoyant demand also continues to attract international
interest. For example, Jackson Family Wines purchased land to create a new
vineyard in 2023, and we expect the release of the first of Taittinger's
English sparkling wines during 2024.
Within this exciting new global wine region, Chapel Down is the largest
winemaker by both production and sales, as well as having the leading brand.
We have 906 acres (367 hectares) of vineyards planted, predominantly on south
facing chalk soils in the North Downs of Kent, which equates to 8.5% of all UK
planted vineyards. Chapel Down will plant its newest vineyard at Buckwell in
spring 2024. This will be 117 acres (47 hectares) of Chardonnay and Pinot
Noir, and will increase our planted vineyards to 1,023 acres (414 hectares).
Chapel Down's yields continue to increase, with a 5-year average of 3.3 tonnes
per acre, significantly higher than the English average. The quality of our
wines also continues to increase, evidenced by the outstanding number of
awards won in 2023.
Chapel Down not only has the largest revenue in the industry but is already
profitable at all levels. Chapel Down's scale allows the broadest
distribution, and it helps manage unit costs that, in turn, drives further
sustainable profitability.
Underpinning the business are an outstanding collection of assets, which are
both long term in nature and very difficult to replicate. These include wine
stocks of £22.6m, which have increased 44% in the year due to the exceptional
harvest (2022: £15.6m). These significantly increased wine stocks give
resilience against any potential future smaller harvest. We, additionally,
have a very strong balance sheet and a £12m RCF, which was unused at year
end.
Furthermore, we have a world-class team in place, led by our CEO Andrew
Carter, who will continue to deliver Chapel Down's continued outstanding
leadership and performance. At the heart of our culture is a commitment to
"deliver together" our ambitious plans and I am proud to note that from 2024,
Chapel Down will be paying the real living wage as a minimum to all our
employees.
These enduring sources of competitive advantage, and our complete focus on
being England's leading and most celebrated winemaker, give us great
confidence about the future. I remain hugely excited about the prospects for
continued exceptional growth in the English wine industry but particularly for
the market leader, Chapel Down.
Finally, I would like to thank all of our customers, our teams, growers, as
well as our committed, loyal and enthusiastic shareholders, without whom these
ongoing successes would not have been possible.
CEO Strategic Review
Chapel Down's vision is to be the leading and most celebrated English
winemaker and I am proud of the team performance in 2023. As we continue to
build our position as England's largest winemaker, we are at the forefront of
the continued growth and development of the world's newest global wine region.
Chapel Down is the leading brand in English sparkling wine with higher
awareness and penetration(5), and a larger social media following, than any
other brand. We are positioned as a fresh, innovative challenger in the
traditional method sparkling wine market, with our excellent, award-winning
wines at the heart of the brand. We continue to premiumise the brand, as is
reflected in our refreshed design, range architecture, continued strong ASP
growth (+13%), and our brand leading position in sponsorship and events.
Our brand-defining traditional method sparkling wines are our focus. They are
what we are famous for. Still wines and A Touch of Sparkle continue to play an
important role in our portfolio, providing us with additional access points
into the brand and operational integration, but we have now exited the spirits
category, as flagged at H1. We are always looking at innovative new wine
products and expect to be able to make exciting announcements in 2024 and
beyond.
The scale and breadth of our distribution is unmatched and growing rapidly. We
have an incredible home market, where English sparkling wine as a category
grew 16% last year. However, domestic English sparkling wine sales are still
only 3% of total sparkling wines and one tenth the size of UK Champagne
sales(4). This means there is still a significant amount of growth potential
in the UK market, and we see increasing opportunities in export markets which
are currently under-served by English sparkling wine.
Our direct-to-consumer (DTC) channel was 32% of our business this year (2022:
33%). We aim to maintain this share as the company grows since DTC helps
rapid, continued brand build, as well as exciting consumer opportunities for
the future, including the fast-growing wine tourism sector.
2023 Performance Review
Key metrics
P&L account 2023 2022 % Change
£000s £000s
Net sales revenue((2)) - gross of retro 17,921 15,635 +15%
Retro((2)) (720) (636) +13%
Net sales revenue((2)) - net of retro 17,201 14,999 +15%
Gross profit 8,911 7,709 +16%
Gross profit % 52% 51%
Fair value movement in biological produce 2,171 (156)
Operating profit before exceptional costs 3,688 1,464 +152%
Exceptional costs (1,235) (110)
Operating profit 2,453 1,354 +81%
Profit before tax 2,307 1,236 +87%
Adjusted EBITDA((3)) 5,437 2,905 +87%
Balance sheet account
Stocks 22,581 15,645 +44%
Net assets 34,326 32,255 +6%
Net cash / (debt) excluding lease liabilities (1,236) 3,262
Key metrics
Average selling price £11.58 £10.29 +13%
Planted vineyards (acres / hectares) 906 / 367 788 / 319 +15%
EPS (basic / diluted) 0.95 / 0.94 0.49 / 0.49 +94% / +92%
Financial Review
Traditional method sparkling wine remains our strategic focus and largest
category. NSR grew 25% to £12.0m (2022: £9.6m), driven by a mix of an
increased ASP of 10% and a 12% volume increase to 887k bottles (2022: £789k).
This ASP and volume growth was further augmented by some additional favourable
product and channel mix movements.
Rosé traditional method sparkling wine was an outstanding growth story in the
year with 47% volume growth to 262k bottles (2022: 178k). We believe there is
a strong, ongoing consumer appetite for rosé traditional method sparkling
wines.
A Touch of Sparkle grew NSR 7% to £1.5m (2022: £1.4m), driven by an 8%
increase in ASP alongside a 1% decline in volumes to 179k bottles (2022:
180k). 'Black Friday' was particularly successful for A Touch of Sparkle
sales, bringing new consumers into the English wine category.
Still wine NSR reduced 7% in the year to £2.6m (2022: £2.8m) with a 9% ASP
increase being offset by a 14% volume decrease to 375k bottles (2022: 435k).
Still wine is a competitive market, and in addition, there was an unwelcome
increase in duty rates during the year which increased the consumer price,
impacting volumes.
Spirits were an insignificant part of our business and NSR reduced by 7% to
£0.6m (2022: £0.6m). Chapel Down reconfirms its planned exit from Spirits in
Q1 2024.
NSR gross of retro((2)) 2023 2022 % Change % Wine sales
£000s £000s
Traditional method sparkling 11,999 9,607 +25% 74%
A Touch of Sparkle 1,471 1,379 +7% 9%
Still 2,638 2,840 (7%) 16%
Spirits 553 592 (7%)
Tours 689 675 +2%
Other sales 571 542 +5%
Total NSR gross of retro((2)) 17,921 15,635 +15%
The off-trade remains our largest distribution channel, accounting for 54% of
wine sales in the year (2022: 57%). Off-trade NSR grew 9% to £9.0m (2022:
£8.2m). Traditional method sparkling wines NSR grew 21% to £7.2m (2022:
£5.9m), driven by premiumisation of pricing up 9%, as well as growth of
distribution for 'premium' traditional method sparkling wine to 3,462 retail
listings (2022: 2,991 retail listings). Chapel Down's off-trade value growth
for traditional method sparkling wine of 21% continues to outpace the overall
English sparkling wine category which grew 16% in the year(4) to £33m (2022:
£29m). Off-trade value market share(4), was maintained at 35.4% (2022:
35.7%).
Strong momentum continued in the on-trade, with NSR growth of 26% to £2.2m
(2022: £1.7m) driven by growing depth of visibility and availability in
premium hospitality outlets. The on-trade saw continued excellent traditional
method sparkling wine performance +39% to £1.3m (2022: £1.0m). ASP in the
on-trade grew at 9%, again led by traditional method sparkling wine at 14%,
reflecting the continued success of our premiumisation strategy. Total outlet
distribution also grew strongly to 2,100 outlets (2022: 1,300). Chapel Down is
now stocked in 76 of the UK's 200 most iconic venues, including The Ritz, The
Lanesborough, and Nobu Hotels.
Continued consumer trial and an enhanced rate of sale is driven through more
than 1,000 'by the glass' placements in the UK on-trade in the year, up 101%
(2022: 536).
Whilst export only reflects 5% of wine sales (2022: 4%), it is the fastest
growing distribution channel, with NSR up 67% to £0.9m (2022: £0.5m). Export
was boosted by a very strong performance across the newly launched travel
retail business. Distribution during the year grew to 36 stores in 14 UK
travel hubs, including Heathrow, Gatwick, Luton, Stansted and London City
airports, and our rate of sale was particularly strong. Chapel Down continues
to maintain a highly selective export market focus, to balance current
financial performance with future growth prospects. During the year, Chapel
Down has continued to seed and develop the brand in 14 international markets
with the key focus markets being USA, Scandinavia and UAE.
2023 was also a strong year for e-commerce, with NSR increasing 18% to £3.1m
(2022: £2.6m). We had over 1m visits to our website (2022: 926k) and a 20%
increase in order numbers. This was driven by 12,000 new customers, as well as
an improved returning customer rate of 62% (2022: 60%). Our 'Black Friday'
activity supporting A Touch of Sparkle was particularly successful, creating
2,700 new customers in a week.
In 2023, we welcomed 60,000 visitors to our brand home in Tenterden, and our
tour numbers were flat at 26,000. Our overall retail and tours NSR increased
10% to £2.3m (2022: £2.0m). For the second year running, we were thrilled to
have been awarded the TripAdvisor 'Travellers' Choice Award' for 2023, placing
us in the top 10% of attractions worldwide. The award is in recognition of our
consistent high-scoring TripAdvisor reviews where we have received an average
of 4.5/5 stars.
Total direct-to-consumer NSR was £5.7m, a growth of 11% (2022: £5.1m). DTC
is 32% of our business this year (2022: 33%), and we aim to maintain this
share as the company grows. DTC allows us to build brand affinity more
strongly, as well as enabling exciting consumer opportunities for the future,
including the fast-growing wine tourism sector.
NSR gross of retro((2)) 2023 2022 % Change
£000s £000s
Off trade 8,968 8,192 +9%
On trade 2,176 1,730 +26%
Export 885 530 +67%
e-Commerce 3,070 2,599 +18%
Retail & Events 1,561 1,368 +14%
Tours 689 675 +2%
Other sales 541 524 +3%
Other income 30 17 +78%
Total NSR gross of retro((2)) 17,921 15,635 +15%
Total DTC 5,684 5,106 +11%
Chapel Down remains strongly profitable at all levels. We are a
well-established business, with the scale to create profitable revenues, which
underpins a strong balance sheet and provides a sustainable platform for
future growth.
Gross profit increased 16% to £8.9m (2022: £7.7m). The biggest component of
this was an increase in ASP by 13%, as well as a small shift in sales mix
towards e-commerce and export.
Administrative costs grew 21% to £7.4m (2022: £6.1m) reflecting a continued
strong investment in our sales and operations teams, as well as the increase
in customer and consumer marketing which continues to grow the strength of the
brand.
Operating profit before exceptionals grew strongly, up 152% to £3.7m (2022:
£1.5m), boosted by the grapes Fair Value (FV) adjustment on the exceptional
2023 harvest of £2.2m (2022: -£0.2m). The FV adjustment is part of the IFRS
accounting standard and reflects the "viticulture profit" for the year. The FV
adjustment is calculated as the estimated market value of grape production
less the vintage's growing costs. The grape juice then enters wine stocks at
this assessed FV and is thus reflected in future cost of goods sold. Further
details of the FV adjustment can be found in note 16.
Exceptional costs of £1.2m reflect both the listing costs associated with
AIM, and the successful implementation of a new cloud-based ERP system
alongside the initial phase of a new cloud-based CRM as part of the creation
of a single, cloud-based technology and data platform. IFRS accounting policy
requires cloud-based technology builds to be expensed.
Operating profit grew strongly, up 81% to £2.5m (2022: £1.4m) as did Profit
before Tax (PBT), up 87% to £2.3m (2022: £1.2m). EBITDA also grew 87% to
£5.4m (2022: £2.9m). PBT and EBITDA growth are driven by profitable trading
but also the fair value adjustment on grapes from an exceptional harvest.
Operational Review
Favourable growing conditions at key periods throughout 2023, combined with
the skill of our world-class viticulture and winemaking teams, enabled the
delivery of a harvest of exceptional grape quality and yield. Across our 750
fully productive acres (304 hectares) under vine, we harvested a record 3,811
tonnes of grapes. This tonnage is 86% higher than 2022 (2,050 tonnes), and 75%
higher than Chapel Down's previous record posted in 2018 (2,173 tonnes).
The majority of grapes (c.80%) harvested were of varieties primarily used for
traditional method sparkling wine, in line with the Company's strategy to
focus on its higher margin award-winning sparkling wines, which benefit from
the cool maritime climate and chalk soils of the North Downs of Kent. The 2023
vintage of traditional method sparkling wines will predominantly be sold from
2026.
In spring 2023, we completed the planting of our exceptional Boxley Abbey
vineyard on the North Downs of Kent. This includes 42 acres (17 hectares) of
Chardonnay and 76 acres (31 hectares) of Pinot Noir for the production of
traditional method sparkling wine and brings our owned and leased holding on
this escarpment of Kent Downs chalk to a total of over 595 acres (241
hectares) of planted vineyard. In total, we now have 906 acres (367 hectares)
of planted vineyards.
In the first half of 2023 we launched our new brand identity, which gives
Chapel Down a more premium, modern and distinctive look. We invested in more
premium materials and finishes to ensure that our packaging lives up to the
quality of our wines. The new identity has been rolled out across all of our
packaging, communications, website, events, sponsorships and brand home. Our
new brand identity has been received well by our consumers, customers,
shareholders and employees.
The Chapel Down brand continues to grow strongly. We have a market share(4) in
the UK off-trade of 35.4%, a prompted brand awareness of 39% and a 12-month
penetration rate(5) of 14%. These market share, brand awareness and
penetration scores are higher than for any other English winemaker. This
growing brand strength comes from significant investments made during the
year. Our sponsorship and events programme were a great success. We were the
'Official Sparkling Wine' of The Boat Race, with the winning men's and women's
crews presented with bottles of Chapel Down sparkling wine, which was
televised live on BBC One. As 'Official Sparkling Wine' of the England Cricket
Board, the 'Player of the Match' for both the men's and women's teams in last
year's Ashes series received a bottle of Chapel Down sparkling wine, which was
televised on Sky Sports with a peak audience of 2m.
During the year, we also became the 'Official English Sparkling Wine' of Tom
Kerridge's Pub in The Park, the biggest food and music festival tour in the
UK, at which our branded airstream sold a range of our sparkling wines at 10
locations across the south of England. A new 3-year agreement was also signed
with Ascot racecourse, which will come fully into effect in 2024, and marks
the first time in the 300-year history of the prestigious British racecourse
that an English wine brand has become an Official Supplier.
Our social media following grew 13% during the year to over 105k followers
across all social media channels (2022: 93k), making us the most followed
English wine brand. In addition, our consumer database grew 8% to 96k (2022:
89k).
Finally, one particular highlight - in celebration of English Wine Week - was
when we took Chapel Down to the Champagne region of France under the guise of
'Chapelle en Bas to run a blind taste test versus a leading champagne brand.
60% of participants preferred the taste of Chapel Down, which continues to
generate significant media exposure in the UK and France.
Sustainability
Chapel Down is committed to delivering its long-term growth ambitions and
aspires to sustainability leadership in the English wine sector. We will
develop best-in-class environmental frameworks and sustainability measures,
focusing on the development of relevant, meaningful and measurable
sustainability plans that benefit the business and the environment in which it
operates.
Significant work was undertaken in 2023 to understand the total company carbon
footprint and identify opportunities for reductions and improvements. Changes
have already been implemented to decrease emissions and increase efficiency,
alongside vineyard plantings & ecosystem management to maximise
sequestration. Our plans and timelines to establish a net zero position will
be further developed and communicated through 2024.
We are committed to working in harmony with nature and continue to maximise
opportunities to increase biodiversity and create habitats for wildlife on our
estates. With the growth of our business, we continue to manage our waste,
energy, water and supply chain responsibly, for example, all of our energy is
sourced from renewable sources, including the use of waste grape skins.
Moving through 2024, Chapel Down will continue to measure and manage key
elements of sustainability and in H2 we will publish our sustainability
strategy and targets in context of the company's future growth plans.
Outlook
Current trading is in line with management expectations and our outlook for
2024 remains positive. We expect to deliver double digit sales growth in the
year, weighted towards H2. We expect underlying profitability to return to
normalised levels, with an increased proportion of still wine and 'A Touch of
Sparkle' in the sales mix as a consequence of the exceptional 2023 harvest, a
more typical harvest yield in 2024, and continued brand investment.
As previously announced, the Company's next phase of growth incorporates plans
for a new purpose-built winery, which the Company expects to be operational in
time for the 2026 harvest (subject to final planning approval being granted at
a judicial review in May 2024).
The Company will continue to explore opportunities to secure new acreage and
develop an expanded tourism offering at the Tenterden brand home to accelerate
future growth. Chapel Down will plant its latest vineyard at Buckwell in
spring 2024. This will be 117 acres (47 hectares) of Chardonnay and Pinot
Noir, and will increase our planted vineyards to 1,023 acres (414 hectares).
To capitalise on our medium-term growth opportunity, the Company is in
advanced discussions to extend and increase its existing RCF, to be drawn when
required as part of the overall mix of funding for its investment plans.
Chapel Down has a great team and is well positioned in an exciting growth
market. The creation of a new global wine region is rare, and we are excited
to be leading the way. I remain hugely confident and excited about the future
of English wine and Chapel Down.
I would like to conclude by thanking our customers, our teams, our growers and
shareholders for their ongoing support. We are looking forward to continuing
this journey together in 2024, with huge anticipation and excitement.
Andrew Carter, CEO
Note 1:
Chapel Down listed on AIM on 7(th) December 2023. Consequently, the company
has adopted IFRS as its accounting standard. All numbers shown, including
comparatives, except where specified in note 2, are prepared under IFRS.
Note 2:
The IFRS standard requires netting Retrospective discount support (Retro),
which is promotional price support given to customers by Chapel Down, from
Sales Revenue ("NSR net of Retro").
Previously, Net Sales Revenue was reported before netting Retro ("NSR gross of
retro"). All channel and category revenue splits in the Financial Highlights
and CEO strategic review are shown in this transition year as NSR gross of
retro, to enable like for like comparison.
Note 3:
Adjusted EBITDA relates to profit from operations before interest, tax,
depreciation, amortisation, share based payment expense and exceptional costs.
Note 4:
Source, Nielsen
Note 5:
Source, BrandVue
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
2023 2022
£ £
Gross sales revenue 20,135,454 17,745,572
Duty (2,214,575) (2,110,323)
Net sales revenue - gross of retros 17,920,879 15,635,249
Retros (719,833) (636,147)
Net sales revenue - net of retros 17,201,046 14,999,102
Cost of sales (8,289,842) (7,290,304)
Gross profit 8,911,204 7,708,798
Administrative expenses (7,394,154) (6,088,595)
Operating profit before exceptional costs and fair value movement in
biological produce
1,517,050 1,620,203
Fair value gain/(loss) on measurement of biological produce 2,171,386 (156,373)
Operating profit before exceptional costs 3,688,436 1,463,830
Exceptional costs (1,235,478) (109,517)
Operating profit 2,452,958 1,354,313
Share of after tax losses in associates - (15,207)
Finance income 47,222 16,147
Finance costs (193,057) (119,567)
Profit before tax 2,307,123 1,235,686
Tax charge (779,773) (451,312)
Profit for the year 1,527,350 784,374
Other comprehensive income for the year
Tax credit 324,626 -
Total comprehensive income for the year 1,851,976 784,374
Total comprehensive income attributable to the equity holders of the company
1,851,976 784,374
Basic profit - pence per share 0.95 0.49
Diluted profit - pence per share 0.94 0.49
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
2023 2022
£ £
Non-current assets
Intangible assets 41,803 79,318
Property, plant and equipment 23,898,358 22,240,670
23,940,161 22,319,988
Current assets
Biological produce - -
Inventories 22,581,264 15,645,107
Trade and other receivables 3,593,348 2,695,075
Cash and cash equivalents 1,004,305 5,800,771
27,178,917 24,140,953
Total assets 51,119,078 46,460,941
Equity and liabilities
Equity
Called up share capital 8,566,939 7,964,506
Share premium 31,541,143 32,143,576
Capital redemption reserve 400 400
Revaluation reserve 936,703 970,457
Retained earnings (6,719,248) (8,824,022)
Total equity 34,325,937 32,254,917
Non-current liabilities
Borrowings - 2,071,159
Trade and other payables 22,630 17,969
Lease liabilities 7,457,140 6,582,798
Deferred tax liabilities 893,397 438,249
8,373,167 9,110,175
Current liabilities
Borrowings 2,240,748 467,385
Trade and other payables 5,748,571 4,287,569
Lease liabilities 430,655 340,895
Total current liabilities 8,419,974 5,095,849
Total liabilities 16,793,141 14,206,024
Total equity and liabilities 51,119,078 46,460,941
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
2023 2022
£ £
Cash flows from operating activities
Profit before tax 2,307,123 1,235,686
Adjustments to reconcile profit before tax to
net cash flows:
Amortisation of intangible assets 37,516 37,516
Depreciation of property, plant and equipment 306,163 211,728
Profit on disposal of property, plant and equipment (13,738) -
Finance cost included within cost of sales 1,139 2,029
Finance income (47,222) (16,147)
Finance cost 193,057 119,567
Fair value movement in biological produce (2,171,386) 156,373
Equity-settled share-based payments 219,044 57,790
Increase in trade and other receivables (898,275) (1,437,715)
Increase in inventories (3,310,142) (1,422,697)
Increase in trade and other payables 1,465,663 455,688
Tax received - 51,195
Net cash flows used in operating activities (1,911,058) (548,987)
Cash flows from investing activities
Purchase of property, plant and equipment (1,816,517) (2,121,743)
Proceeds from sale of property, plant and equipment 9,671 -
Interest received 47,222 16,147
Net cash flows used in investing activities (1,759,624) (2,105,596)
Cash flows from financing activities
Proceeds from issue of shares - 220,019
Repayment of borrowings (300,000) (300,000)
Lease payments (645,284) (566,611)
Interest paid (180,500) (113,184)
Net cash flows generated from financing activities
(1,125,784) (759,776)
Net decrease in cash (4,796,466) (3,414,359)
Cash and cash equivalents at beginning of year 5,800,771 9,215,130
Cash at the end of year 1,004,305 5,800,771
1. BASIS OF PREPARATION/ACCOUNTING POLICIES
The Company's report for the year ended 31 December 2023 was authorised for
issue by the directors on 15(th) April 2023. The financial information does
not constitute statutory accounts within the meaning of Section 434 of the
Companies Act 2006. Accordingly, this report is to be read in conjunction with
the Annual Report for the year ended 31 December 2023, which was prepared in
accordance with the Company's reporting standards (International Financial
Reporting Standards as adopted by the UK, IFRS) that were in effect at that
time.
The Company is required to value net assets in accordance with the Company's
reporting standard (IFRS). The assets (wine stock, land, vineyard) are held at
cost which the Directors believe is considerably less than the net realisable
value.
The statutory accounts for the year ended 31 December 2023 have been reported
on by the Company's auditors, received an unqualified audit report and will be
issued to shareholders in June 2024.
2. BALANCE SHEET REVIEW
The net asset value of the Company as at 31 December 2023 was £34,325,937
which includes:
• Fixed assets held at net book value of £23,898,358, including
vineyard development expenditure which is capitalised at cost.
• £22,581,264 of stock, which is valued at cost being the lower
of cost or net realisable value.
3. PROFIT PER SHARE
The calculation of the profit per share for the year ended 31 December 2023 is
based on the profit for the period of £1,527,350 and the weighted average
number of shares in issue during the period of 160,260,960 exclusive of the
effect of dilutive share options, and 161,665,581 inclusive of dilutive
options.
4. DISTRIBUTION OF THE FULL YEAR STATEMENT
Copies of this statement will be available for collection free of charge from
the Company's registered office at Chapel Down Winery, Small Hythe Road,
Tenterden, TN30 7NG. An electronic version will be available on the Company's
website, www.chapeldown.com (http://www.chapeldown.com) .
This announcement contains inside information for the purposes of the retained
UK version of the EU Market Abuse Regulation (EU) 596/2014 ("UK MAR").
Contacts
Chapel Down Group plc Chief Executive Officer
Andrew Carter Chief Financial Officer 01580 763 033
Rob Smith
Nominated Adviser and Broker
Singer Capital Markets
Shaun Dobson 020 7496 3000
Tom Salvesen
Asha Chotai
James Todd
H/Advisors Maitland
Sam Cartwright 020 73795151
Jonathan Cook
About Chapel Down:
Chapel Down (AIM: CDGP) is England's leading and largest winemaker and the
power brand of English wine, the world's newest international wine region.
From its home in Kent in the heart of the Garden of England, Chapel Down
produces a range of sparking and still wines which consistently win
prestigious international awards for their quality. Chapel Down has over 1,000
acres of vineyards, of which 750 acres are fully productive.
Chapel Down's status as the most recognised English wine brand is supported by
its partnerships with flagship sporting and cultural events including Ascot,
The Boat Race and Pub in the Park, and Chapel Down is the 'Official Sparkling
Wine' of the England and Wales Cricket Board.
Chapel Down is listed on the London Stock Exchange's AIM and has over 8,000
retail investors who enjoy discounts on Chapel Down's wines, tours and
tastings at the brand's home at Tenterden in Kent, which each year attracts
c60,000 visitors.
Chapel Down is strongly committed to growing its business in balance with the
environment and sustainability is a strong, ongoing focus. The company is a
founding member of Sustainable Wines of Great Britain and practices
sustainable viticulture.
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. END FR SFIFLIELSEDLRecent news on Chapel Down
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