Kent-based wine maker Chapel Down Group (CDGP) has launched a crowdfunding campaign to raise £5.45m at 59.5p a share via Seedrs. A placing with directors and Michael Spencer raised £1.43m and Seedrs offer has already raised £6.45m. This has been achieved even though the current share price on the Aquis Stock Exchange is 56.5p (56p/57p). The crowdfunding offer final acceptance date is 23 July.
Chapel Down has shed its non-core interests. That includes brewer Curious Drinks, which was placed into administration and the business acquired by Risk Capital Partners, which was founded by Luke Johnson. Chapel Down offered small shareholders in Curious Drinks a share swap of 1.57 Chapel Down shares for each Curious Drinks share. In the 2020 accounts, there was a £6.68m write-down relating to Curious Drinks.
In 2020, Chapel Down increased its revenues from continuing operations by 32% from £10.1m to £13.3m in 2020, while wine volumes rose by 38%. The underlying pre-tax profit more than trebled from £308,000 to £955,000.
Net debt was £7.4m at the end of 2020. A new asset-based financing facility of up to £15m has been secured and it will refinance the current HSBC debt.
NAV was £23.5m at the end of 2020. As additional acreage is planted, and existing areas mature, this will increase the underlying value of the business.
Chapel Down has a 34.6% share of the off-trade market in English sparkling wine and a 41.1% share of the still wine market.
The wine maker wants to increase the scale of its winery so it can process more fruit and complete the planting of new acreage. Management also wants to improve the company’s e-commerce capabilities. An increasing proportion of sales are generated online with direct to consumer sales 18% of last year’s total.
There are 780 acres of planted vineyards with 549 acres currently productive. The rest will produce crops this year but will not reach maturity until 2023. Another 150 acres available for planting.
There is currently enough planted acreage to produce an average of 2.11 million bottles of wine each year, with potential to increase that to 2.51 million bottles.
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