Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Chapel Down’s share price cratered on Friday following news that England’s largest winemaker had downgraded its sales guidance and announced it was staying independent after putting itself up for sale this summer.
Shares fell 20 per cent after the company said its board had concluded that “there were no transactions that would create superior long-term shareholder value” than remaining a standalone company. They are now down more than 40 per cent since the start of the year.
The winemaker also said it expected full-year net sales revenue to be a low, single-digit decline from the previous year and that, while positive, its operating profit in 2024 would be lower than in 2023.
Chapel Down, which is listed on London’s Alternative Investment Market (Aim) said in June that it was considering a sale of the business and other financing options to fund its ambitious growth plans.
The English wine industry is in a period of consolidation following a decade of rapid growth as a warmer climate and increasing appreciation of domestic wine encouraged more people into the sector.
Despite the annual net sales downgrade, the company said it expected double-digit sales growth for the rest of the year in bars, restaurants and hotels, as well as in its direct-to-consumer channels, such as at its vineyard. It added that third-quarter sparkling wine sales had picked up again and that its retailer inventories had returned to normal levels.
The company also said that due to this year’s difficult harvest, it had booked a non-cash charge of between £750,000 and £850,000.
This year, winemakers in England suffered the second-worst harvest on record, according to official statistics, with persistent wet weather and disease battering vines. Production in 2024 could fall as much as 70 per cent, estimated trade group WineGB.
Chapel Down said it expected to produce approximately 1,875 tonnes during the 2024 harvest, compared with 3,811 in 2023 and 2,050 in 2022.
The company’s share price had already taken a 13 per cent hit last month after the sparkling wine brand announced its pre-tax profits had plunged from £2.4mn in the first half of last year to £40,000 in the same period this year.
In the same trading update, the company announced that chief executive Andrew Carter, who has headed the brand since 2021, was leaving in 2025 to work for Yorkshire brewer Timothy Taylor.
At the time, Carter said the drop in sales was due to depressed consumer confidence and poor weather, and insisted that the decline was a one-off.
Read the full article here