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Thu 23rd Apr 2015 - Chapel Down reports record year
Chapel Down reports record year: Wine maker Chapel Down Group has reported year-on-year sales up 21% on last year at a record £6.1m (2013: £5.0m) in the year to 31 December 2014. Ebitda rose to £479,000 (2013: £454,000) and pre-tax profit was up 175% to £187,000 (2013: £68,000). It reported that 2014 yielded largest ever harvest and excellent quality fruit. There was further growth in beer revenues with a 43% increase in turnover. Chairman John Dunsmore said: “2014 was an excellent year with many achievements that have gone a long way to secure an exciting future. In a year of many highlights, even the weather played its part. We enjoyed a record harvest of excellent quality fruit, which will ensure that our wines will continue to grow their international reputation in the future and we are able to meet shorter term demand. We raised £3.95m in our crowd-funding in September which will enable us to accelerate the development of the brand and business. We have been able to secure 326 acres of new land on long term leases to enable us to plant more vineyards in the finest areas for grape growing to ensure that we can meet anticipated future demand. Our beer business continues to go from strength to strength. The brand is in good health and we were delighted to be nominated as one of the UK’s food and drink heroes and officially a CoolBrand. We are ever more confident of an exciting and rewarding future for the Group. Our financial performance remains slightly affected by the low levels of grape harvest in 2011 and 2012 which – owing to the ageing required to produce the highest quality sparkling wines – has limited the amount of sparkling wine stock available for sale. However with two large harvests in 2013 and 2014 our stocks have been replenished and we can now plan for further growth. Nevertheless, we had more still wine available for sale in 2014 and our beer sales grew by 43% as we continue to invest in our marketing and sales. Driving our top line sales at healthy margins (36.3% versus 37.4% LY) has been successful with year on year sales up 21% and gross profits up 18%. With sparkling wine still in relatively low growth due to stock shortage and beer growing so rapidly, the margins were slightly lower though this was partially counteracted by growth in our shop and tourism business. We have continued to develop good relationships with our key customers and have continued to win new prestige business. We continue to drive our top line sales and our gross profit to enable us to continue to invest more in the brand, grape supply, production facilities, people and systems for the future. It is encouraging to continue to see an uplift in the UK economy, as this remains our primary market and also encouraging to have had the duty escalator dropped and duty frozen in the last budget. The UK pays a staggering 67% of all the wine duties and taxes collected on wine in the whole EU. We are hopeful that further punitive duty increases are unlikely given the current success of the industry and the economic benefits of its continuing growth. Regardless of future duty increases, maintaining a strong brand is our best defence. However, we will be further broadening our geographic reach through exports of our sparkling wines and beers. There is a risk that, through extreme weather events, we suffer a poor harvest. The Group maintains the highest standards of viticulture, has rigorous site selection and uses technology to mitigate risk. We source from a wide geographic area to minimise micro-climate risks. The Group has also diversified into beer. Competition in English wines and premium beers is extensive. Chapel Down continues to invest in its people, brands and distribution to ensure the business can continue to thrive. Our assets are extremely strong: high quality vined land in particular attracts a premium as evidenced by recent transactions. In addition, our brand assets are more valuable and our limited stock more in demand than ever.” 


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