English wine pioneer Chapel Down may put itself up on the market

Chapel Down boss Andrew Carter

Britain’s biggest sparkling wine producer Chapel Down could put itself up for sale just over six months since listing its shares on London’s AIM market.

Chapel Down, which has cashed-in on booming demand for domestically sourced wine, told shareholders on Tuesday it had launched a strategic review to consider options to fund profitable growth.

It said it was time to review long-term funding options to pursue its growth strategy, which includes investing in new vineyards, a new purpose-built winery to be operational for the 2026 harvest and the development of Chapel Down’s brand home at Tenterden.

The Kent-based firm saw revenues grow 15 per cent to just shy of £18million last year, with earnings before nasties soaring 87 per cent to £5.4million.

It swung from a net cash position of £3.3million to net debts of £1.2million as of 31 December after investing in a record harvest of 3,811 tonnes, growing wine stocks by 44 per cent and planting 118 acres at Boxley Abbey vineyard.

Chapel Down shares have added around 11 per cent since they began trading on the AIM index in December and were trading at 62.9p on Tuesday morning.

The group said it was considering ‘all alternatives’, including investment from new and existing shareholders, or a sale of the company.

Chapel Down added it is on-track to deliver ‘double digit’ sales growth in 2024 while maintaining a strong balance sheet with ‘significant headroom to its existing debt facility’, which it has reached an agreement in principle to extend and increase.

‘There can be no certainty that a transaction will be pursued by the company, nor as to the terms of any eventual transaction,’ it added.

Drinks industry veteran Andrew Carter joined Chapel Down as chief executive in 2021 with a mission to double sales to £28million by 2026.

Over the past three years, Carter and his team have worked to ensure Chapel Down is sold across the UK, in bars and restaurants, supermarkets and off-licences, as well as direct to consumers via a thriving online site.

Sponsorship of English cricket has raised awareness and global sales are rising, with Americans and Scandinavians showing a particular fondness for English sparkling wine.

The latest government figures show the UK now boasts almost 900 vineyards, with hectares under vine having more than quadrupled since 2000.

WineGB reported that 2023 saw Britain’s largest-ever grape harvest, producing an estimated 20-22million bottles – more than 50 per cent ahead of the previous record set in 2018.

It is thought that climate change is contributing to increasingly ideal winemaking conditions in the south of England. English Sparkling Wine has seen a surge in popularity in recent years with 8.3 million bottles produced in 2023.