English wine producer bullish despite sales dip
Poor weather and short harvests caused turnover and earnings to drop slightly at English sparkling wine producer Chapel Down.
First half turnover in the six months to June 30 fell to £2.02m from £2.15m the previous year, and earnings before interest, tax, depreciation and amortisation fell to £145,000 from £295,000.
Chairman Paul Brett said the firm’s performance was affected by short harvests in 2011 and 2012, leading to a 31% drop in wine volume sales.
But he added that a 191% spike in sales of its Curious beer range meant the company only posted a narrow overall sales decrease.
Brett said: “Since July last year, when the 2012 harvest was evidently going to be poor following a very weak flowering period, the company has had to rein back its wine growth to ensure its ability to maintain supply to key customers.
"In spite of the lack of stock resulting in a 31% fall in the volume of wine sold, this only translated into a 6% decline in overall sales. A 9% increase in average selling price (ex-duty and VAT) and a 191% increase in the sales of Curious Beers contributed to this position.
“However, it has meant making some difficult choices when allocating the wines and by prioritising those accounts that have the best customer profile, sustainable prices and have demonstrated long term support of the range.”
Chapel Down also predicted that the 2013 harvest has not been blighted by poor weather and is on course to yield “an excellent quality and substantially improved quantity of fruit”.
It recently received £4.35 million in equity funding and announced ambitious expansion plans, which will see it plant new vines in Essex, Kent and Sussex, and build a brewery for its beer range.
Former Scottish & Newcastle chief executive John Dunsmore joined the board to oversee the expansion. Dunsmore founded the Hothouse Club, which made up £2.4 million of the investment.