Chapel Down Full Year Results | 2019

Chapel Down Full Year Result | 2019

by Chapel Down 19 June 2020

Chapel Down Group PLC is pleased to announce the Company’s Full Year Results for the 12 month period ended 31st December 2019.

Key highlights:
• Year on year sales on a continuing basis up 14% to £14.801m (2018: £13.016m)*/**
o Chapel Down Wine and Spirits sales on a continuing basis up 13% to £10.102m (2018: £8.977m)
o Beer and Cider sales, in Curious Drinks Limited, up 16% to £4.699m (2018: £4.039m)***
• Wines and Spirits gross profit on a continuing basis up 8% at £3.920m (2018: £3.626m)
• Beer and Cider gross profit (in Curious Drinks Limited) up 16% at £1.431m (2018: £1.229m)
• EBITDA on a continuing basis was a loss of (£0.862m) (2018: loss of (£0.155m))*/**** as we continue to reinvest in our brands, infrastructure and supply
• The extraordinary harvest in 2018 has enabled us to increase stocks by 40% to £10.719m (2018: £7.680m) reflecting the substantially higher levels of sparkling stock
• A Platinum medal and “Best in Show” at The Decanter World Wine 2019 Awards for our Kit’s Coty Coeur de Cuvee 2014 and our Kit’s Coty Chardonnay 2016 along with Golds for both wines at The International Wine Challenge 2019 Awards. Our Kit’s Coty Bacchus 2017 also won a Platinum medal at The Decanter World Wine 2019 Awards
•  Additional 154 acres of new vineyards planted on outstanding chalk terroir on the North Downs in Kent close to our Kit’s Coty vineyard
• Our Bacchus Gin won Gold at The Gin Masters 2019 and our Chardonnay Vodka a Gold in The Vodka Masters 2019 in addition to the D&AD packaging award
• Brewery build completed and opened to the public from 10 May 2019 with first commercial brews on 24 June 2019 and full brewing capacity available from Q4
• Stop Press –Curious Brewery won UK Brewer of the Year 2019

John Dunsmore, Chairman, said: 

Chapel Down has always been singularly focused on building strong differentiated and valuable brands. We believe that they will deliver a more sustainable long term profitable business. Chapel Down operates in attractive growth sectors – English wine, craft spirits and contemporary beers and cider with good growth potential both in the UK and abroad. We have built a portfolio of attractive innovative brands with premium positioning supported by well executed marketing, strong distribution and visibility, high profile sponsorship’s, attractive experiential brand homes and serving a loyal and growing customer base of shareholders, brand advocates and fans. In a challenging environment, we believe those assets are vital to our long term success. Whilst we all wish for a speedy return to normality, and in particular a healthy pub, bar and restaurant trade, there is still much uncertainty.

Now, more than ever we should support British brands and companies that can help re-build our economy and grow employment. Those that succeed will not compromise on quality and value. That is why I believe that despite the current crisis, Chapel Down is in an exciting position to thrive. We are a young British company with a rapidly growing customer-centric business. We make and sell market-leading brands increasingly on-trade but also to retailers who want truly World class products, great service and great value.

2019 was another busy year. We took in another substantial harvest of good quality fruit which will make high quality premium wines. We planted a further 154 acres of perfect chalk down land in Kent with vines which will yield around 250,000 bottles of world class sparkling wine a year. We continued to grow the sales of our wines, spirits and beers and won yet further critical acclaim for our wines, spirits and beer with some remarkable awards. However, the development of our Chapel Down Gin Works in Kings Cross was not the commercial success we had anticipated and so, despite giving consumers a great experience, we decided to close the operation at the end of December. Our brewery in Ashford, became finally operational in June and fully productive in Q4. It has attracted great reviews and the beer is excellent. Indeed, so good that it won “UK Brewer of the Year 2019” in 2019. Sadly, the current crisis has forced us to mothball the operation as we are heavily skewed to supplying the on-trade. It’s heart-breaking to stop after just a few months of operation. Nevertheless, we are currently in good shape to weather the storms of change with strong brands and a more sizeable wine business in the off-trade and in e-commerce. The future looks exciting, albeit with the prospect of high short term volatility, as we see the rise in importance of the membership economy, online sales, British products and sourcing, trusted premium brands along with a solid asset base.

We will continue to make substantial investments over the coming years in planting more vineyards, developing our winery, improving our commercial and online infrastructure, hiring and training the best talent and creating smarter and more effective marketing to ensure that we build the strongest quality brands and are therefore best placed for future growth and any industry consolidation.

Our assets are supportive of the business: land – and high quality vined land in particular – continues to appreciate, our brand assets are more valuable than ever and our balance sheet is strong.

It has been my privilege to Chair the Board for the last six years. We enjoy the custom and support of our many shareholders who tell the Chapel Down story with energy and enthusiasm. On a personal note, I am delighted that Chapel Down has attracted a new Chairman of the calibre of Martin Glenn who will make a great contribution in supporting our inspirational management team to further success. Thank you for your continued faith, for your excitement, your encouragement and your support.

* For the years ended 31 December 2016 and 2017 Curious Drinks Limited was accounted for as an associate company in the consolidated financial statements. Following changes during 2018 in the composition of the board of Curious Drinks Limited and a significant increase in funding from Chapel Down Group Plc, Financial Reporting Standard 102 requires us to report Curious Drinks Limited as a subsidiary in the consolidated accounts of Chapel Down Group Plc from 30 January 2018. In the comparative period Curious Drinks Limited was an associate for January 2018 and a subsidiary for 1 February 2018 to 31 December 2018. To enable a like for like comparison table 1 in the performance review section of the Chief Executive’s commentary shows the turnover and gross profit as if Curious Drinks Limited had been a subsidiary for the entirety of 2018.
** Includes 12 months of Beer and Cider sales for Curious Drinks Limited for both periods.
*** In April 2016 Curious Drinks Ltd raised £1.736m for a 9.79% economic share and a 50.21% share of the voting rights in the business. The sale resulted in Chapel Down Group PLC retaining a 49.79% voting share and a 90.21% economic share of Curious Drinks Ltd.
**** Excludes the effect of the FRS 102 Section 26 share option accounting adjustment of £43k (2018: £57k) which is a non-cash item.

19th June 2020