English sparkling winemaker Chapel Down expects to return to profit this year, following a strong start to trading in 2025.
The Kent-based supplier, which released audited financial results for the year ended 31 December 2024 today (3 April), said it was “currently trading well ahead of prior year” and expected “strong sales growth for the year, with a return to full profitability”.
“Whilst 2024 was a tougher year for Chapel Down following the outstanding performance seen in the previous year, the business performed creditably, making continued strategic and operational progress,” said chairman Martin Glenn. “The prospects for Chapel Down as the leading English winemaker remain exciting.”
Adjusted EBITDA at Chapel Down fell by 58% to £2.4m in the year to 31 December, with the reduction driven by an 11% dip in gross profits, and a non-cash in-year fair-value adjustment on biological produce. Operating profit swung from £2.5m in 2023, to a £900k loss, while losses before tax stood at £1.4m compared to profit of £2.3m reported in 2023.
Net debt, meanwhile, rocketed by 641% to £9.2m on account of new vine plantings and increased stock levels from the 2023 harvest.
Full-year sales net of duty and retrospecitve discount support were broadly in line with those outlined in a trading update in January, declining by 5% to £16.4m.
However, sales in Q4 grew by 7% to £5.7m.
The aborted attempt to find a strategic partner for Chapel Down had resulted in £1m of exceptional items recorded in this year’s financial results, Glenn revealed.
Despite “extensive conversations with interested parties on an array of structures”, Chapel Down “did not find a partner with the right fit on both strategic direction and valuation”, leading its board to conclude “the best way to create superior long-term shareholder value was for Chapel Down to remain a standalone, AIM listed, company”, said Glenn.
No update on Chapel Down winery
Meanwhile. Chapel Down did not have “any certainty on the final completion date” for its new purpose-built £32m winery in Kent, advised new Chapel Down CEO James Pennefather.
“Planning permission is subject to ongoing judicial review, the next step of which is expected to be completed by late summer 2025, when we will provide an update,” he said. “In the meantime, the company has been reviewing alternative options to increase winemaking production capacity in the medium term.”
The results are a significant improvement on a torrid first half for Chapel Down, in which challenges in the off-trade relating to excess stock held by retailers resulted in a 36% collapse in sales.
Over the full year, off-trade sales fell by 19%, but this was “not reflective of positive off-trade consumer sales growth” Chapel Down insisted. It pointed to a 3% increase in brand sales, and a 4% increase in sparkling wine sales to shoppers.
“The board is confident that the one-off factors that contributed to this [decline in sales] are unrelated to the underlying growth in consumer demand for Chapel Down Wines, which continues,” Glenn insisted.
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