Chapel Down Group PLC is pleased to announce the Company’s Interim Results for the six month period ended 30 June 2015.
Key highlights include:
• Year on year sales up 33% to £3.25m (H1 2014: £2.44m)
• Wine sales volumes up 45%, to £2.28m
• Beer and cider sales up 33% to £974k
• Gross Profit of £1.17m up 31% (H1 2014: £897k)
• EBITDA of £84k (H1 2014: £74k), as we continue to reinvest in our brands, infrastructure and supply
• A further 82 acres of vines planted at our new leased site in Boxley on North Downs
• Gold medals for our wines in three prestigious global competitions - The International Wine Challenge 2015, The Decanter World Wine Awards 2015 and the Sommelier World Wine Awards 2015
• The appointment of Mark Harvey - a new Managing Director for wine with extensive luxury and premium brand experience at LVMH
• Prospect of another excellent harvest in 2015 in both volume and quality will enable more sales and even higher quality wines
Frazer Thompson, Chief Executive, said:
“We have delivered another strong set of results, with sales and gross profits both up by a third. Consumers’ interest in English wines and beer grows from strength to strength and Chapel Down is well positioned to benefit. The proceeds of last year’s successful crowd funding are being used to plant more vines in the finest sites, improve our production facilities, winemaking equipment and systems and develop our people and brands. We are encouraged by the prospect of another good harvest in 2015 which will enable us to continue to improve the quality of our wines and ensure we have supply in place to meet future demand.”
Chapel Down continued to perform strongly in the first half of 2015, with turnover increasing 33% to £3.25m and gross profit growing 31% to £1.17m. We were encouraged by growth in sales of both wine and beer.
We have made a conscious decision to reinvest any surplus cash in our people, our systems, and our brands. We believe that the potential and the growth in both English wines and beer will continue and we want to ensure our brands are well positioned to participate in that growth. Supply issues are being addressed through both improved harvest levels and new vineyard investment. As a consequence the Group reported EBITDA of £84k, compared with £74k in the six months to June 2014.
Wine sales volumes grew 45% in the first half, to £2.28m. We are confident in the positioning of our brand and are starting to see growth across the country, as well as some exciting export opportunities.
Our still wines (much of which can be released in the year following vintage) have been winning International accolades, as well as our sparkling. As a result we are seeing strong demand and excellent sell through (volumes up 57%). We are confident of maintaining the strong top line growth over the rest of the year.
Our sparkling sales grew strongly, up 32%. We are managing that growth to ensure that we do not over-extend our distribution, but maintain a premium profile and good relationships with our distributors and retailers. Our mix of product has therefore been affected, but we can look forward to further progress as reserve sparkling wine stocks are built and the results of the excellent 2013, 2014 and - in all probability - 2015 harvests gradually become available for sale.
The investment by our shareholders has enabled us to secure an exciting future. We are very pleased with the development of our new vineyard sites and have planted a further 82 acres so far. We continue to invest in further capacity and equipment at Tenterden, improving our systems and building our team.
We are delighted with the appointment of Mark Harvey as our new Managing Director of Wine. His experience and knowledge will help us to build the Chapel Down wine brand and grow our business.
Beer and Cider
Beer and cider sales rose 33% to £974k in the first half. Our growth has focused on premium accounts and we have been delighted by the continuing progress in top end restaurants, bars, hotels and premium off trade where the brand is gaining momentum. Our quality distribution will help to build both our brand and our reputation. From Hilton and Guoman Hotels to top end restaurants and bars, Secret Cinema and Majestic Wine and Waitrose, we are attracting a knowledgeable and aspirant consumer wanting something interesting, original and accessible.
We have a unique and distinctive consumer proposition – a winemaker’s beer – which is increasingly rare in an exciting and fast-growing market. Our real point of difference and our appeal to a broad church of consumers give us a fantastic opportunity. We are very pleased with the top line growth and strong margins which are enabling us to re-invest in marketing and sales to build the brands.
We remain positive about continuing to grow sales in the second half of 2015. Furthermore, we are optimistic that the 2015 harvest will provide the quality and quantity of fruit from which we can seek to create international award winning wines in the years to come. We also have exciting plans for the growth of beer and cider.
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 cash balances remain high. We enjoy the custom and support of our many new shareholders who are spreading the word on our behalf. Thank you for your continued support.