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Chapel Down, England's largest winemaker, is considering selling the company as part of a strategic review to explore financing options for its ambitious growth plans.
The company said on Tuesday it was looking for long-term investment to fund new vineyards and a new purpose-built winery, and was considering a range of options, including a sale and financing from new or existing shareholders.
The maker of the popular English sparkling wine intends to double its sales between 2021 and 2026, supported in part by England's warm climate, which has led to a boom in foreign investment in the country's vineyards and wineries.
Wine production in England and Wales more than doubled to 12.2 million bottles between 2017 and 2022, according to trade association WineGB, bucking a trend of lower yields in Europe and the rest of the world as warmer weather impacts wine crops.
Investment in English lands rose dramatically as foreign winemakers discovered an opportunity to de-risk by making wine in England's relatively cooler climate. The UK wine industry has recorded investments worth £80 million in 2023, according to property consultancy Strutt & Parker.
Chapel Down's growth strategy includes investing in new vineyards and a purpose-built winery which is scheduled to open in time for the 2026 harvest. The company listed on London's Aim market in December at 55p per share. Shares fell 5 percent in early trading Tuesday.
“Given the timeline for these investments, the board believes it is now appropriate to review the full range of long-term financing options that support this plan,” said the company, which leases and supplies 1,023 acres of vineyards in the Southeast. England.
Chapel Down announced an 87 per cent rise in annual pre-tax profits for the year to the end of December, to £2.3m, thanks to an “exceptional harvest”, and a 15 per cent rise in revenue to £17.9m. British pounds.
The company said on Tuesday it was on track to achieve “double-digit sales growth” in 2024 and had “significant headroom” to facilitate existing debt of £12 million. It also reached an agreement in principle to extend these financing arrangements.
Foreign investors in the UK wine industry include the American group Jackson Family Wines, the French companies Taittinger and Pommery, and the Spanish Freixent.
