Chapel Down scraps sale plans

English sparkling wine producer Chapel Down has rowed back on plans to sell the business following a strategic review.

 

The Kent-based firm said it had considered several options for the company but found there was no deal which would “create superior long-term shareholder value”.

 

The winemaker said it would “only consider transactions that are value creating for our shareholders”.

 

Shares in Chapel Down dropped 24% from 47.9p p to 36.1p following the announcement on Friday but recovered to around 42p this morning.

 

Meanwhile, Chapel Down has nearly completed its 2024 harvest, which it said would be of a similar high quality to its 2019 vintage but of a lower yield than the “exceptional” 2023.

 

Growing conditions for 2024 started well, but the 2024 vintage faced more difficult weather conditions in September and October, the winemaker said.

 

The business said it had built a strong inventory of wine from previous vintages which would mean future sales plans would not be impacted by stock availability.

 

Chapel Down expects the 2024 harvest will be approximately 1,875 tonnes, down from the 3,811 tonnes reported in 2023. This will create around 1.7m bottles, a majority of which will be traditional method sparkling wine.

 

Josh Donaghay-Spire, operations director and head winemaker at Chapel Down, said: “The fruit is looking and tasting great, particularly at our vineyards on the Kent Downs. Whilst the 2024 vintage has faced more difficult weather conditions in September, vintage conditions and grape flavours are reminiscent of the 2019 harvest which delivered great quality traditional method sparkling wine such as the recently released Grand Reserve 2019 and Blanc de Blancs 2019.”

 

Chapel Down said it expected to see double-digit sales growth for the year in the on-trade, export and direct to consumer channels.

 

However, it now expects full-year net sales revenue to be a low, single digit decline from prior year. The company expects operating profit for the full year to be positive, but on a lower level than 2023.

 

Chapel Down has 1,024 planted acres of vineyards, which is about 10% of the UK’s total, and is able to produce up to three million bottles of wine per year.

 

It is currently awaiting final planning permission on a winery in Highland Court, Kent.