Lord Ashcroft invests further £2.7m in English wine

Conservative peer Lord Ashcroft, the majority shareholder in English winery Gusbourne, has invested a further £2.7 million in the company as it announced it had raised a total of £3.7 million through the issuing of new shares to investors.

Based in Appledore in Kent, Gusbourne has released an update to its announcement on 12 July that it was intending to raise between £3 and £5 million through a subscription offer of new shares priced at 60 pence each.

The winery has now raised a total of £3.7 million which equates to 6,221,699 new shares.

Gusbourne added that the money will be used to cover costs on its existing vineyards “until maturity,” provide “working capital with regard to [its] increasing wine stocks” and fund additional winery and storage expansion.

Lord Ashcroft has subscribed for £2.7 million, representing 4,504,510 new shares, of which £1 million, Gusbourne states, “will be satisfied through the repayment of the shareholder loan, in full, which was provided to the Company on 31 May 2018”.

In addition non-executive director Paul Bentham has subscribed for 83,334 new shares worth £50,000; Ian Robinson for 41,667 new shares worth £25,000; James Arbuthnot for 25,000 new shares worth £15,000; Matthew Clapp for 16,667 new shares worth £10,000, and non-executive deputy chairman Mike Paul for 83,334 worth £50,000.

The Nest at Gusbourne.

Lord Ashcroft owns a 72.4% stake in Gusbourne and following his investment, has a total of 33,005,663 ordinary shares.

Gusbourne has applied for the 6,221,699 new shares to be admitted to trading on AIM which is expected to be approved tomorrow (11 September). Once this has been achieved, Gusbourne will have a total of 45,588,683 ordinary shares on AIM.

Shellproof, Lord Ashcroft’s wine investment company, bought Gusbourne in 2013 for £7 million from former South African consultant orthopaedic surgeon Andrew Weeber, who had spent 10 years converting the former “turnip patch” into a vineyard.

In its 2017 results, published in June, Gusbourne reported a 56% rise in revenue to £998,000 in the year ending 31 December 2017, compared to £640,000 in the previous year.

However, its EBITDA was down by £690,000 compared to £802,000 in 2016 with operating loss after depreciation and amortisation amounting to £1,169,000, compared to £1,159,000 in 2016. The company said this was “in line with expectations and the long-term development strategy of the Group”.

Gusbourne now exports its wines to 16 countries with exports representing 25% of its total revenue, up from 14% last year. It opened its cellar door operation called the Nest in July 2017.

The winery produces Berry Bros’ own label brand of English sparkling wine and has a total of 231 acres of vineyards, with plantings dating from 2004 to 2015.