Chapel Down sales fizz up in 2023

Newly listed winemaker Chapel Down (CDG) has reported an uptick in profits for 2023, and is banking on appetites for its sparkling wine increasing further as it ramps up production. 

Most other listed wine companies are either in the retail sector or part of much larger conglomerates, such as Moet owner LVMH (FR:MC). Chapel Down offers an insight into the workings of a 1.7mn-bottle-a-year company. It operates in a niche where the biggest seller, sparkling wine, is cheaper than non-vintage champagne but well above an average bottle of cava or prosecco. British buyers are keen enough to have sent sales of its core brand of sparkling white up a third to £12mn in 2023, pushed up by both volume and price increases. 

The production cycle by its nature means grapes are harvested years ahead of corks being popped, giving some headroom in the case of a poor season. The recent rain has not impacted the grapes, although frost later in the spring would hinder growth. 

Chapel Down is celebrating the opposite for 2023 – it has booked a £2.2mn “viticulture profit” off the back of an “exceptional harvest” last year. This metric uses an estimated market value of the grapes compared with harvesting costs. Excluding this and the exceptional listing costs of £1.2mn, operating profit for the year was £1.5mn, just ahead of 2022. 

Chapel Down has plans for a far larger visitor centre in Canterbury, expanding operations from its current Tenterden base, and £12mn in undrawn debt to build this. Investors should expect a steady-as-she-goes approach – not surprising from an industry built on letting bubbles form slowly. Hold. 

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