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Chapel Down concludes strategic review
The UK’s largest winemaker will remain a standalone AIM listed company after its strategic review concluded that “there were no transactions that would create superior long term shareholder value”.
Chapel Down, which owns around 10% of the UK’s planted vineyards, has announced that it is is no longer in an “offer period”, as defined in the takeover code.
The conclusion of its strategic review found that retaining the firm’s position as an AIM listed company would provide the best outcome in long term shareholder value, it announced on Friday (25 October).
In a statement, the firm said going forward it will “only consider transactions that are value creating for our shareholders”.
The Kent-based producer announced in June that it was considering putting itself up for sale as it conducted a strategic review of its business.
In a statement 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”.
As part of the review, Chapel Down said it would “consider all alternatives”, including a sale of the company — as well as investment from new and existing shareholders. The company has more than 414 planted hectares of vineyards, which is c10% of the UK’s total. It has the capacity to produce three million bottles of English wine per year.
The news of the strategic review came just 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”.
When the review was announced in June, Chapel Down’s half-year results showed that its pre-tax profits were down from £2.4m to just £40,000.
Announced on Friday, Chapel Down now expects the full year net sales revenue to be a low, single digit decline from prior year.
It said it expects its profit before tax to be in the red for the full year, although it gave no further detail.
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