Sales sparkle for Gusbourne and Chapel Down as English wine market expands
Chapel Down continued strong sales growth momentum with H1 net sales revenue growth, of 21% to £8.4m, with strong sales growth across all trade channels.
In H1, Chapel Down's gross profit margin increased by 3% to 55%, driven by a shift to traditional method sparkling wine and higher selling prices. Operating profit grew 27% to £685k, pre-tax profit increased 26% to £618k, and EBITDA grew 36% to £1.2m due to higher sales, improved gross margin, and disciplined overhead management. Chapel Down's net cash as of June 30th was £1.1m.
Chapel Down said current trading is meeting expectations, and its 2023 outlook remains positive, with anticipated double-digit net sales growth and steady margins for the year.
At Gusbourne, UK wine sales increased to 24% to £2.3m in the first half, driven by robust growth in both direct-to-consumer and UK Trade sales channels. International sales saw a slight decline, down 7% due to the timing of export orders.
Gusbourne’s gross margin improved by 840bps to 68.3%, reflecting improved price and sales mix dynamics, in line with the group's premium positioning and product strategy, as well as a decreased mix in H1 of International sales that are at a lower margin.
Adjusted EBITDA loss improved, narrowing to £0.58m compared to £0.70m in H1 2022. Additionally, its net debt increased to £15.2m from £10.3m in H1 2022, primarily due to increased investments in inventory and the capital expenditure in land, acquired in August 2022.
Looking ahead, Mike Paul, Gusbourne’s interim Chief Executive Officer, said "Whilst we are mindful of the current economic headwinds, with these strong results, an anticipated good harvest in 2023, new land purchases made during last year and healthy inventory levels in our cellars, the Board continues to look to the future with great confidence as we further strengthen our position as one of the UK's most significant fine wine producers."
View from Vox
Impressive results from Gusbourne and Chapel Down, which continue to position themselves as market leaders in the buoyant English sparkling wine market.
Both companies are poised to benefit from the growth of the English wine market, which has seen exceptional progress in recent years. Approximately 11 million bottles of English wine were sold in 2022, of which 7.5 million bottles were sparkling, which represents a growth of approximately 30% year on year. In the UK, 10,000 acres of land are planted under vines according to Wine GB, more than doubling in eight years and quadrupling since 2000.
The growth of the English wine market alongside the strong financial and operational progress from Chapel Down and Gusbourne demonstrates that they are set for success as the year progresses. Chapel Down aims to double revenue between 2021-2026 to £28m, while setting plans in motion to deliver profitable growth beyond 2026. Gusbourne's long-term strategy envisions revenue growth and margin improvement through scale, driven by increased production from new vineyards.
Follow Chapel Down and Gusbourne for more News and Updates: ,
Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.