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England’s largest winemaker Chapel Down is considering a sale of the business as part of a strategic review to explore funding options for its ambitious growth plans.
The company said on Tuesday that it was looking for long-term investment to fund new vineyards and a new purpose-built winery, and was considering a range of options, including a sale and funding from new or existing shareholders.
The maker of the popular English sparkling wine has set out to double sales between 2021 and 2026, aided in part by England’s warming climate, which has led to a boom in foreign investment in the country’s vineyards and wineries.
Wine production in England and Wales more than doubled to 12.2mn bottles between 2017 and 2022, according to trade association Wine GB, bucking the trend of falling yields in Europe and the rest of the world as hotter weather has hit wine crops.
Investment in English land has soared as foreign winemakers have spotted an opportunity to de-risk by making wine in England’s comparatively cooler climate. The UK wine industry saw some £80mn in investment in 2023, according to property consultancy Strutt & Parker.
Chapel Down’s growth strategy includes investing in new vineyards and a purpose-built winery set to open in time for the 2026 harvest. The company listed on London’s Aim market in December at 55p a share.
Shares fell by 4 per cent in early trading on Tuesday.
“Considering the timeline of these investments, the board believes that it is now appropriate to review the full range of long-term funding options that support this plan,” said the company, which currently leases and sources from 1,023 acres of vineyards in south-east England.
The company said it was on track to deliver “double-digit sales growth” in 2024 and had “significant headroom” to an existing debt facility of £12mn. It has also reached an agreement in principle to extend this financing arrangement.
Foreign investors in UK wines include US group Jackson Family Wines, French houses Taittinger and Pommery, and Spain’s Freixenet.
