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Chapel Down considers sale in strategic review
Kent-based producer Chapel Down is considering putting itself up for sale as the firm conducts a strategic review of its business.
In a statement today on behalf of the company from chief financial officer Robert Smith, the board said the review would look at “the options to fund its plan to continue driving strong and profitable growth in the long-term”.
The group’s growth strategy includes investing in new vineyards, a new purpose-built winery, which it plans to be operational for the 2026 harvest, and “the development of our brand home at Tenterden”.
Appropriate time
It said: “Considering the timeline of these investments, the board believes that it is now appropriate to review the full range of long-term funding options that support this plan.”
As part of the review, it will look “consider all alternatives”, it said, including a sale of the company — as well as investment from new and existing shareholders.
The news comes as the producer also said it “remains on-track” to deliver double digit sales growth in 2024 and “retains a strong balance sheet with significant headroom” to its existing debt facility of £12m — and has reached agreement in principle “to extend and increase this facility”.
It added that there can be “no certainty” that a transaction would be pursued by the company — nor the terms of any eventual transaction.
AIM
The news comes only six months after the producer was admitted to the Alternative Investment Market (AIM) as part of its bid to “attract a wider pool of investors”.
It also follows as the company, which was founded more than twenty years ago, is looking to expand. In March 2023, the producer said it would produce three million bottles a year by 2028, and extend plantings to 1,023 acres (414 ha) by 2024 as part of a “long term enterprise”.
CEO Andrew Carter told the drinks business at the time that he was “delighted” with the results, which saw full year Net Sales Revenue (NSR), which excludes duty, grow by 10% year-on-year to £15.6m. The Kent-based wine company planted an additional 38 acres of vines at our Boarley Farm site in 2022. It plans to plant an additional 118 acres there in spring 2023, taking the company’s total to 906 acres under vine, of which 750 will be fully productive in 2023. All 906 acres will be fully productive by 2027.
The Company sold 1.4 million bottles of wine in 2022, and approximately 60,000 visitors a year for winery tours and tastings at its brand home and retail experience in Tenterden, Kent.
Chapel Down CEO, Andrew Carter, said in December that the AIM admission was “the next positive step in the evolution and growth of the company”.
He said: “It is testament to the maturity of the business and the growth we have delivered and anticipate in the years ahead.
“The decision to move the Company’s shares to AIM reflects increasing demand from institutional investors. We believe it will help attract new investors to participate in Chapel Down’s growth as the leading producer in the world’s newest global wine region.”
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