REG - Chapel Down Group - Unaudited Trading Statement ended 31/12/2024

Chapel DownAnnouncement

23/01/2025 07:00

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RNS Number : 3366U  Chapel Down Group PLC  23 January 2025

This announcement contains inside information for the purposes of the retained
UK version of the EU Market Abuse Regulation (EU) 596/2014 ("UK MAR").

Chapel Down Group Plc

('CDG' or 'the Company') EPIC: CDGP

 

UNAUDITED TRADING STATEMENT FOR THE PERIOD ENDED 31 DECEMBER 2024

Chapel Down, England's leading and largest winemaker, is pleased to provide an
unaudited trading update for the year ended 31 December 2024, with net sales
revenue in line with guidance and strong sales momentum in H2. The Group
expects to report:

Highlights

                                         2024      2023      Change  2024      2023     Change

                                                                     H2        H2
 Gross sales revenue (GSR)               £19.8m    £20.1m    -1%     £11.4m    £10.8m   +5%
 Duty                                    (£2.6m)   (£2.2m)   +16%    (£1.5m)   (1.2m)   +22%
 Net sales revenue - gross of retro      £17.3m    £17.9m    -4%     £9.9m     £9.6m    +3%
 Retro                                   (£0.9m)   (£0.7m)   +28%    (£0.6m)   (0.4m)   +62%
 Net sales revenue - net of retro (NSR)  £16.3m    £17.2m    -5%     £9.2m     £9.2m    +1%
 NSR ex Spirits                          £16.2m    £16.6m    -3%     £9.2m     £8.8m    +4%

 

 ·                     Chapel Down sales net of duty and retro (NSR) are expected to have reduced by
                       5% during the year to £16.3m (2023: £17.2m), in line with guidance.
                       Excluding the exited Spirits business, NSR is -3%.

 ·                     Chapel Down showed good sales momentum in H2 (H2 NSR +1%, +4% ex-Spirits),
                       with particularly strong trading over the Christmas period (Q4 NSR +7%, +10%
                       ex-Spirits)

 ·                     Strong performances in eCommerce (+22%) and the On-trade (+16%) offset by NSR
                       decline in the Off-trade (-19%) due to the previously reported one-off
                       reductions in stock held by retailers during H1. Sales to consumers in the
                       Off-trade, continued to show growth throughout the year(1) (FY +2%, Q4 +25%).

 ·                     Chapel Down remains the leading brand in English wine with continued growth in
                       Awareness(2) (42%), Affinity(2) (25%) and Penetration(2) (17%), higher than
                       any other English wine brand.

 ·                     The Company recorded net debt of £9.2m after planting 118 acres of new vines
                       taking total acreage to 1,024 (c10% of the UK's total) and also increased
                       stock levels after the exceptional 2023 harvest, which underpins future
                       growth. The company retains significant headroom on its £20m revolving credit
                       facility.

 ·                     As announced on 13(th) December 2024, James Pennefather joins as Chief
                       Executive Officer on 1st February 2025.

Andrew Carter, Chapel Down CEO, commented:

 

"2024 was a year of continued strong consumer demand for Chapel Down's
award-winning wines, as well as significant strategic and operational progress
for the Company. Chapel Down enjoyed strong growth in its direct-to-consumer
channels, maintained its market leadership in the critical Off-trade, with
strong sales momentum across our channels in H2, accelerating in the
all-important final quarter.

Chapel Down continues to consolidate its position as the leading English
winemaker, with the strongest brand metrics and the deepest distribution in
English wine. The exceptional quality of our wines was recognised in 2024 with
some of the industry's most prized awards, including 'best in show' at the
global Decanter awards for our Sparkling Rosé and Wine GB's 'Supreme
Champion' with Kit's Coty Coeur de Cuvee 2016.

"As I reflect on my time at Chapel Down, our fantastic team can take great
pride in what we have achieved. Chapel Down has a renewed focus on our market
leadership of the growing English wine region. We have invested to grow our
vineyards to over 1,000 acres, c10% of the UK's total, we have developed our
premium sparkling wine brand, grown the broadest and deepest distribution base
and created a single business platform to support future growth. Under the new
leadership of James Pennefather, the Board's confidence in the future growth
of both Chapel Down and English wine is as strong as ever."

 

Trading performance

Company sales

 

 ·                     Chapel Down sales net of duty and retro (NSR) are expected to have reduced by
                       5% during the year to £16.3m (2023: £17.2m)
                       o  Strong performances in the On-trade (+16%) and eCommerce (+22%)
                       o  Offset by NSR decline in the Off-trade (-19%)
                       §   Significant reduction in stock held by retailers in H1, impacted sales
                       by c£1m for the full year, which we do not expect to recur.

                       §   Nielsen(1) data shows +2% sales to consumer growth in the year for
                       Chapel Down in the Off-trade.

 ·                     Chapel Down has good sales momentum from trading in H2, particularly over
                       Black Friday and the Christmas period.
                       o  H2 showed +1% NSR growth to £9.2m (H2 2023: £9.2m)
                       o  NSR growth accelerated in Q4 with +7% growth to £5.7m (Q4 2023: £5.4m)

 ·                     Excluding the now exited Spirits business, the full year NSR decline reduced
                       to -3% (NSR 2024: £16.2m, 2023: £16.6m) and the Company showed +4% H2 NSR
                       growth, accelerating to +10% in Q4

 

Channels and Products

 

 ·                     Chapel Down continues to benefit from the industry's broadest distribution and
                       expects to report.
                       o  Continued strong consumer demand driving +22% growth in eCommerce revenues
                       to £3.8m (2023: £3.1m) and overall DTC growth of 13% to £6.4m (2023:
                       £5.7m).
                       o  On-trade revenue growth at +16% to £2.5m (£2.1m) as Chapel Down
                       continued to enjoy a strong rate of sale and secure key distribution wins
                       (outlets +25% to 2,462), including The Langham, and extended partnerships with
                       Greene King and Mitchells & Butler, among others.
                       o  Off-trade remains Chapel Down's largest channel with strong sales to
                       consumers and H2 momentum being offset by previously reported one-off impacts
                       of reductions in stock held by retailers in H1.
                       §   NSR -19% to £6.8m (2023: £8.4m), however, sales to consumers through
                       the Off-trade(1) continued their growth in 2024 (+4% Sparkling, +2% overall)
                       with particular momentum in the Christmas period (+38% Sparkling, +29%
                       Overall).

                       §   Chapel Down maintained market leadership in the Off-trade in 2025 with
                       its 34% market share(1).

                       §   Overall statutory sales growth in 2024 was materially impacted by both
                       the Coronation being in the comparative period and retailers significantly
                       reducing their stockholdings in H1, as referenced above.
                       o  International NSR was 10% lower at £0.7m, (2023: £0.8m)
                       §  Primarily driven by a decline in Export sales. Chapel Down is currently
                       reviewing a range of options to optimise distribution in export markets.

                       §   Global Travel Retail +33% year on year growth. Chapel Down is now
                       listed in 35 key UK travel hubs including Heathrow, Gatwick, London City,
                       Luton and Manchester airports (2023: 13 locations).

                       §   International remains a significant future growth opportunity for the
                       company.

 ·                     Sparkling wine remains our strategic focus and was 70% of wine sales in 2024
                       (2023: 74%). Chapel down sales by category are expected to show that:
                       o  Sparkling wine NSR was £10.6m (2023: £11.4m), primarily due to one-off
                       challenges in the Off-trade, as referenced above. In the Off-trade(1), Chapel
                       Down Sparkling wines (+4%) outgrew English sparkling wine as a category (+2%)
                       and Champagne (-2%).
                       o  Still wine NSR grew 22% to £3.1m (2023: £2.5m), due to customer demand,
                       increased distribution and a planned RRP reduction in 2024.
                       o  A Touch of Sparkle (ATOS) NSR showed a slight decline to £1.3m (2023:
                       £1.4m). ATOS classic was relaunched, under a new label consistent, with ATOS
                       Rosé, in Q4.
                       o  Chapel Down fully exited Spirits in the year, reflected in sales of £0.2m
                       (2023: £0.6m)

 ·                     Sparkling average selling price (ASP) grew 5% showing continued brand strength
                       and consumer demand but was offset by planned RRP reductions in Still (-9%)
                       and ATOS (-4%) leaving blended ASP -4%.

 

Financial

 

 ·                     The Company recorded net debt of £9.2m (2023: £1.2m). Increased net debt was
                       after:
                       o  Planting 118 acres (48 hectares) at our new Buckwell vineyard. Chapel
                       Down's total planted vineyards now extend to 1,024 acres (414 hectares), c10%
                       of all UK planted vineyards.

                       o  Stock growth of c£4m, which underpins future growth, primarily as a
                       result of the exceptional 2023 Harvest.

                       o  The Company retains significant headroom on its RCF of £20m.

 

Note 1:

 ·                     Consumer sales in Off-trade for 52 weeks to 28(th) December - Chapel Down +2%,
                       Chapel Down Sparkling +4%. Chapel Down market share, 34%, unchanged on PY.
 ·                     Q4 consumer sales in Off-trade for 12 weeks to 28(th) December - Chapel Down
                       +25%, Chapel Down Sparkling +32%
 ·                     Chapel Down sales in 4 weeks to 28(th) December - Chapel Down +29%, Chapel
                       Down Sparkling +38%
 ·                     Source, Nielsen

 

Note 2:

 ·                     Source: Savanta, BrandVue, Sparkling Wine drinkers, MAT End December 2024

 

Contacts

 

 Chapel Down Group plc   Chief Executive Officer

 Andrew Carter           Chief Financial Officer       01580 763 033

 Rob Smith

 Singer Capital Markets  Nominated Adviser and Broker

 Shaun Dobson

 Tom Salvesen                                          020 7496 3000

 Asha Chotai

 James Todd

 H/Advisors Maitland

 Sam Cartwright                                        020 7379 5151

 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 10,000
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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