Chapel Down has initiated a strategic review to support its expansion efforts. Below are the key developments.
- The company plans to expand its Tenterden base and construct a new winery east of Canterbury.
- A potential sale and delisting from AIM is under consideration.
- This move reflects the increasing demand for English wines, driven by favourable climatic conditions.
- Chapel Down reported a 14% increase in sales and an 87% rise in pre-tax profits in 2023.
The London-listed Chapel Down has initiated a strategic review to support its expansion plans, including the enlargement of its Tenterden base in Kent and the construction of a new winery east of Canterbury. This review may lead to a sale of the company, potentially resulting in Chapel Down’s delisting from the Alternative Investments Market (AIM) after just seven months.
This strategic move is aligned with the growing demand for English wines, propelled by favourable climatic conditions that have transformed southern England into a fertile wine-producing area. Chief Executive Andrew Carter highlighted the company’s ambition to rival champagne: ‘There is a long pathway for us to continue to take share from champagne, and consumers increasingly understand that the wines in this country are as good if not better in terms of quality,’ he stated.
The burgeoning interest in English wine is evident as French champagne houses Pommery and Taittinger have already invested in Britain’s wine industry by acquiring land for production. Chapel Down, established in 2002 and publicly listed since 2003, continues to lead as England’s largest winemaker. With billionaire Lord Spencer, a former Conservative Party treasurer holding a 26% stake and serving as a non-executive director, the company enjoys significant backing.
The strategic review follows a highly successful year for Chapel Down, with a 14% increase in sales amounting to £17.9 million in 2023 and an 87% rise in pre-tax profits reaching £2.3 million. Alongside a potential sale, further investment from existing shareholders is also under consideration.
The possibility of Chapel Down going private could add pressure on London’s public markets, which have recently seen a wave of companies leaving the FTSE and AIM. Andrew Carter acknowledged the broader economic context: ‘We have enjoyed a really positive listing on AIM. It’s a relatively young listing, and when we listed, we made it very clear that we were going to continue to look at optionality around different financing options. AIM and raising money on the capital markets remains a potential option and one that we’ve been actively working on in the context of this review.’
The rising demand for English wines has not gone unnoticed, with English sparkling wine sales increasing by 16% in supermarkets last year, as per Nielsen data cited by Chapel Down, whereas champagne sales declined by 9%.
Chapel Down’s strategic review underscores its commitment to leveraging the growing demand for English wines to fuel its expansion ambitions.
