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Thu 27th Sep 2018 - Chapel Down plan experiential ginnery in King's Cross, M&B sales strengthen
Chapel Down plans experiential bar, restaurant and ginnery in King’s Cross: Chapel Down Group has exchanged on an agreement to lease a 5,000 square foot site in King’s Cross by the Regent’s Canal where it will be opening the “Chapel Down Gin Works” an experiential bar, restaurant and ginnery. The completion of the lease is subject to receipt of the appropriate planning and licencing approvals. Chief executive Frazer Thompson said: “We’ve had an amazing response to our new Chapel Down gin. This new site in King’s Cross is a spectacular setting and we are delighted that we’ve been able to work with estate owner King’s Cross Central Limited Partnership to enable us to create an iconic and exciting waterside venue and gin works that will celebrate the very best English food and drink. With St. Pancras International just minutes away, the new Chapel Down Gin Works will be just 38 minutes from our spectacular new brewery in Ashford and a further 20 minutes from our beautiful winery and vineyards at Tenterden. Just the tonic for British food and drink tourism! The company reported year on year sales up 15% to £5.716m (H1 2017: £4.977m) in the six months ended 30 June 2018. Ebitda was £216,000.” Thompson added: “It is encouraging that interest in English wines – and Chapel Down in particular – has never been higher. The wine world has seen us grow the sparkling wine market and innovate and surprise with our still wines. That has enabled us to continue to improve our pricing and improve our margins with sales up 19% and gross profit up 24%. And interest is not just from the UK, but increasingly in sophisticated wine markets internationally as news of the excellence of our wines spreads. We have taken our first significant steps to grow our international business through a partnership in our most important export market – the USA. We believe we have a distinctive and compelling proposition to offer Champagne’s export markets. This year, depletions in the US have grown by 17%. We have also been very encouraged by the results of our Chapel Down gin and vodka launch. In a crowded marketplace, we have a distinctive product, beautifully packaged (it won a highly prestigious D&AD accolade) and well priced. We have seen success not only in top end London bars and restaurants such as All Bar One, Mr. Foggs and Mark Hix but also in Majestic and more recently, Tesco. Although sales reached £300k in the first half, we are seeing further opportunities for growth in the second half and we will be building on the success of Chapel Down’s spirits through the creation of an exciting experiential bar, restaurant and Gin Works at Kings Cross, London just 38 minutes by train from our new brewery in Ashford. In the beer market, Curious beers and cider have maintained the highest standards of quality and we have continued to invest in our people and marketing as we build out our new brewery at a highly visible site in the centre of Ashford. The new brewery will give us greater control over our growth and also bring improved margins and a highly visible point of difference. Gareth Bath joined last October as MD for beer and cider, and his energy and enthusiasm have been crucial to developing the brand and ensuring our positioning has not been compromised as we carefully manage our growth. Sales growth of 6% in a very competitive beer market, despite the disruption caused by the hiaitus at Matthew Clark and Bibendum will improve as we continue to invest in getting the brand message and sampling extended. The new brewery will be a big and highly visible step forward in the brand’s journey. We have blue chip listings in Majestic, Waitrose and Tesco and high class on trade business with M&B and others supported by Matthew Clark. It is important that we continue to invest in the highest quality consumer marketing to ensure that the beer and cider are vital brands for our retail partners. It’s a differentiated product that tastes great. We are confident of its future success.”

M&B reports sales have strengthened in August and September: Mitchells & Butlers has reported sales have strengthened since its last update, on 2nd August. The company stated: “In the eight weeks to 22 September like-for-like sales growth was 2.2% on a calendar basis, aligning dates to account for the impact of the additional (53rd) week in our accounting period last year. The period has also seen a more normalised split between drink and food sales following a period of very strong drink growth over the summer. On a reporting basis like-for-like sales growth was 0.8% in the past eight weeks, and 1.2% in the year to date. Total sales have increased by 0.5% in the year to date impacted by the disposals in the prior year. Cost headwinds remain largely unchanged and, as previously advised, are expected to lead to margins being lower than last year. We continue to make good progress on building a more balanced estate, in particular premiumising our offers where possible and reducing the remodel lifecycle. We have opened seven new sites and completed 232 conversions and remodels in the financial year to date.” Chief executive Phil Urban said: “We are pleased to have seen like-for-like sales growth improve to 2.2% following the period of sustained hot weather and the World Cup over the summer. We are building momentum as a result of our focus on our strategic priorities and are seeing encouraging results from the second wave of transformation activity. Work continues to mitigate the cost headwinds impacting the industry and we remain confident of delivering full year results in line with the board’s expectations.”

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