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Tue 9th Sep 2014 - Chapel Down Group launches crowd-funding move
Chapel Down Group launches crowd-funding move: Wine producer Chapel Down Group is to raise up to €5 million through crowd-funding platform Seedrs. A placing has also already secured £670,000 of extra funding. The company stated: “The new funds will be used to enable Chapel Down to satisfy the ever increasing demand for its award winning products. Funds will be used to plant more vines, build a new winery, construct new distribution and storage facilities, build a brewery and a visitor attraction and extend the hospitality at the headquarters in Tenterden.” The fund-raising move comes as it reports year-on-year sales up 21% to £2.44m (H1 2013: £1.72m) in the six months to 30 June 2014. Wine sales volumes were up 12% and beer sales were up 60% to £733,000. Gross Profit was £897,000 (H1 2013: £756k) and Ebitda was £71,000 (H1 2013: £138k) reflecting “increased investment in our brands, infrastructure and supply”. The company is finalising new long-term land leases on “four excellent sites which will add 387 acres of potential new vineyards increasing our potential production by 133% from 2019”. The company said it is “confident” for its outlook due to the prospect of an excellent harvest in 2014 in both volume and quality. Frazer Thompson, chief executive, said: “We have delivered a strong set of results with sales up 21% and we are encouraged by signs of an excellent harvest for 2014. We are also delighted to announce a new share offer, giving more people the opportunity to invest in Chapel Down as we continue to grow our business and brands. “Chairman John Dunsmore said: “2014 is proving to be an extraordinary year for the Company and the response from the team has been exceptional. Our financial performance has inevitably, and predictably been affected by the low levels of grape harvest in 2011 and 2012. Since July 2012 when it became apparent that the 2012 harvest was evidently going to be poor following a very weak flowering period, the Company has had to rein back its wine growth to maintain supply to key customers. However, despite two lean years, we experienced our largest ever harvest in 2013 and that has enabled us to recover stocks at a time of growing demand for the brand. Still wines from the 2013 vintage have been available since late April 2014, so have only very recently started to have an impact on our performance. Wine sales volumes were up by 12% over last year and reflected the recent availability of the still wine. Our beer sales continue to drive forward with a 60% increase in sales over last year. As a result we continue to drive our top line to new heights with year on year sales up 21%.We have made a conscious decision to continue to invest in our people, our systems, and our brands as we believe that the potential and the growth in both English wines and craft 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 made an Ebitda of £71k compared with £138k in the six months to June 2013. Turnover has increased 21% to £2.44m with a gross profit of £897k. We remain very positive about the growth in sales for 2014. Furthermore, we are optimistic that the excellent flowering and outstanding summer will result in the 2014 harvest yielding an exceptional quality and substantially improved quantity of fruit from which we can continue to create Award winning wines. The timely development of Curious beer sales has given the Company a new and profitable income stream and shareholders should be enthusiastic about the growth potential reflected in its £216k gross profit contribution in the first six months. We are delighted to have been able to secure a number of important new sites over the course of this summer which will give us the finest land in which to plant vineyards for our future growth. We will be planting these over the coming years. Our more immediate plans include expanding the wine production by securing more fruit from existing vineyards. We will also be improving the winery production facilities as well as building a new brewery. Our assets are extremely strong: land – and high quality vined land in particular - continues to appreciate as evidenced by recent transactions. In addition, our brand assets are more valuable than ever. As a result of the 2013 fund-raising, our ambitions are high and our debts are low. We were particularly encouraged by the number and enthusiasm of new shareholders who were attracted by our desire to give them a great deal on our wines. So I am delighted to announce details of a new share offer that goes live today. This will encourage more investors to join us as well as being appreciated by existing shareholders. Our growing band of pilgrims has spread the word about our brands whilst enjoying excellent benefits and being part of an exciting young industry. We cannot wait to welcome more of them to our company. With a strong Board and great managers, I remain confident that the prospects for the company are excellent.”
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