REG - Chapel Down Group - FY23 Trading Update

Chapel DownAnnouncement

23/01/2024 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240123:nRSW5305Aa&default-theme=true

RNS Number : 5305A  Chapel Down Group PLC  23 January 2024

 

Chapel Down Group Plc

('CDG' or 'the Company')

EPIC: CDGP

FY23 Trading Update

Chapel Down, England's leading and largest winemaker, is pleased to provide an
unaudited trading update for the year ended 31 December 2023.

The Board is pleased to report a strong result for the financial year. In line
with strategy, the Group has continued to deliver profitable growth and expand
its brand presence both domestically and internationally.

The Group expects to report:

                                                2023     2022     Change  H2 2023  H2 2022  Change
 Gross Sales Revenue (GSR)                      £20.1m   £17.7m   +13%    £10.8m   £9.9m    +9%
 Duty                                           £2.2m    £2.1m    +5%     £1.2m    £1.2m    +8%
 Net Sales Revenue pre-retro (NSR)              £17.9m   £15.6m   +14%    £9.6m    £8.7m    +9%
 Retro                                          £0.7m    £0.6m    +15%    £0.5m    £0.4m    +7%
 Net Sales Revenue post-retro (NSR post retro)  £17.2m   £15.0m   +14%    £9.1m    £8.3m    +10%

 

 ●    Chapel Down has shown continued sales momentum.

      ○                                         NSR post retro(1) is expected to have grown 14% to £17.2m (2022: £15.0m).

      ○                                         NSR pre retro(1,2), Chapel Down's previously disclosed main revenue metric, is
                                                expected to have grown 14% to £17.9m (2022: £15.6m).

 ●    Strong Traditional Method Sparkling (TMS) wine volume and value growth
      underpinned the premiumisation strategy:

      ○                                         Core TMS wine NSR grew by 25% to £12.0m (2022: £9.6m) on underlying volume
                                                growth of 12% to 887k bottles (2022: 789k).

      ○                                         "A Touch of Sparkle" Carbonated wine NSR grew by 7% to £1.5m (2022: £1.4m)

      ○                                         Still wine NSR reduced by 7% to £2.6m (2022: £2.8m), in a competitive market
                                                for Still wines and with the increase in Duty during the year.

      ○                                         Spirits NSR reduced by 7% to £0.6m (2022: £0.6m). Chapel Down reconfirms its
                                                planned exit from Spirits in Q1 2024.

 ●    Sales growth was spread across all of Chapel Down's UK & International
      trade channels and the Direct-to-Consumer business, showing the benefits of
      scale and breadth of distribution.

      ○                                         Off-trade remains the largest channel and NSR grew +9%. Off-trade TMS wines
                                                NSR grew +21%, strengthened by the introduction of Sparkling Rose for sale
                                                alongside Brut in the Premium category, as well as an expanded distribution to
                                                3,805 listings (2022: 3,116).

      ○                                         English Sparkling Wine as a category grew retail sales value by 16% in the UK
                                                Off-trade, whilst Champagne sales declined 9%.  Chapel Down's Off-trade value
                                                market share, measured by Nielsen, was maintained at 35.4% in 2023 (2022:
                                                35.7%), re-confirming its market leadership.

      ○                                         On-trade NSR grew +26%, driven by a significant increase in listings to over
                                                2,000, with over 1,000 being "by the glass", which leads to the greatest rate
                                                of sale and consumer conversion.

      ○                                         Export NSR grew +67% primarily due to a very strong first year listing in UK
                                                Duty Free outlets including Heathrow, Gatwick and London City airports. Chapel
                                                Down is also focused on establishing its brand and growing sales
                                                internationally across core export markets.

      ○                                         The Direct-to-Consumer business accounted for 32% of NSR (2022: 33%) with
                                                strong Ecommerce NSR growth of +18% and Tenterden brand home & Events
                                                increasing +14%, supported by a successful summer of events.

 ●    Chapel Down's average realised sales price (ASP) grew 12% during the year,
      illustrating the continued premiumisation of the brand and favourable mix.

 ●    The Chapel Down brand continues to grow strongly due to best-in-class wines
      (winner of 28 awards in 2023), scale and sustained investment, with prompted
      brand awareness at 39% (2022: 32%) and penetration of 14% (2022: 10%). Source:
      BrandVue

 ●    The brand home at Tenterden operated at close to full capacity for the year,
      with 60,000 visitors in 2023.

 ●    The Company recorded net debt of £1.2m (2022: Net Cash £3.3m) after a record
      Harvest of 3,811 tonnes (2022: 2,050) and the planting of 118 acres at the
      Boarley vineyard, which takes total land under vine to 906 acres, or 367
      Hectares (2022: 788 acres, 319 Hectares).

 

Andrew Carter, Chapel Down CEO, commented:

"2023 was a landmark year for English Wine and Chapel Down, and it is great to
see the strategic and operational progress that we have delivered, and the
continuing sales momentum 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 with growth across
all our UK & 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
plans. We look forward to updating the market on the continued profitability
of our business in our full year audited results.

"Chapel Down is the market leader in an industry which is enjoying rapid and
sustained growth, we have the strongest and most recognised brand, the deepest
distribution which we continue to expand at pace, and we continue to win
international acclaim for the quality of our wines. Reflecting the maturity of
the business and our ambitious growth plans, in December Chapel Down's shares
admitted to trading on the London Stock Exchange's AIM, enabling a wider pool
of investors to participate in Chapel Down's growth in 2024 and beyond.

"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. This includes netting
Retrospective discount support (Retro), which is promotional price support
given to customers by Chapel Down, from Net Sales Revenue ("NSR post Retro").
Previously, Net Sales Revenue was reported before netting Retro ("NSR pre
retro"). The full impacts of moving to IFRS accounting, and a reconciliation
to results under the Company's previous FRS accounting standard, will be
provided in the year end audited accounts.

Note 2: All channel and category splits in this announcement are shown pre
retro, to enable like for like comparison.

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

 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 Fischer

 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 and tours and
tastings at the brand's home at Tenterden 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 GB and practices sustainable
viticulture.

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTDGGDBUDDDGSD