Chapel Down profits soar 31% to £1.7m

Strong wine sales saw profits at English wine producer Chapel Down increase by nearly a third in the six months to 30 June 2015.

Chapel Down CEO Frazer Thompson. Photo: Chapel Down)

The Kent-based business reported gross profits up 31% to £1.17m, driven by strong year on year wine sales, where volumes rose 45% to £2.28m. EBITDA in the first half was £84k, compared with £74k in same period last year.

Sales of sparkling wine grew strongly, it said, up 32%, but the mix of products was affected by Chapel Down’s management of growth to avoid over-extending distribution. However it said it was building sparkling wine stocks, boosted by the “excellent” 2013 and 2014 harvests and the likelihood of a strong 2015 harvest. Still wines also grew, with volume sales up 57%.

Strong growth was also reported in beer and cider, up 33% to £974k, with the portfolio gaining momentum in higher end bars, restaurants, hotels and in the premium off trade. It also said there were plans in the pipeline to boost growth in its beer and cider portfolio.

Chief executive Frazer Thompson said the company was well-positioned to benefit from increased consumer interest in English wine and beer, having invested in the business and the brand, and boosted production.

A year ago, the wine and beer producer smashed a crowdfunding target raising £2.9m in just ten days to double its production and future-proof the business. Within six months it had boosted its total acreage by 80% to around 326 acres, and has added a further 82 acres at a new leased site in Boxley on the North Downs.

Supply issues are being addressed through both improved harvest levels and new vineyard investment, and the company recently appointed Mark Harvey, former business development director of luxury brand LVMH, as the new managing director for wine. “The proceeds of last year’s successful crowd funding are being used to plant more vines in the finest sites, improve our production facilities, winemaking equipment and systems and develop our people and brands,” Thompson said.

“We are encouraged by the prospect of another good harvest in 2015 which will enable us to continue to improve the quality of our wines and ensure we have supply in place to meet future demand.”