- CEO unexpectedly steps down
- Pre-tax profits plunge in H1
- Strategic review ongoing
Shares in Chapel Down (CDGP:AIM) cheapened 16% to 58.5p after England’s largest winemaker uncorked a first half profits plunge and said CEO Andrew Carter is leaving to take up a new role at Timothy Taylor & Co.
Drinks industry veteran Carter’s exit is a bitter blow to Chapel Down.
During his three year stint as CEO, he oversaw the winemaker’s move from the Aquis exchange to AIM and its market capitalisation has increased materially during his tenure, driven by the development of the brand in a booming English wine industry.
TIMOTHY TAYLOR GETS CARTER
Kent-based Chapel Down has accepted Carter’s resignation as CEO and he is set to take up the same role at iconic British beer maker Timothy Taylor in 2025.
A recruitment process for the sparkling-to-still wine producer’s new CEO will begin shortly, though Carter will continue to lead the business until the process is completed.
PROFITS PLUNGE UNCORKED
Announced in June, Chapel Down said its strategic review of the options to fund its long term growth plan remains ongoing and it will provide a further update in due course.
The beverages firm is considering raising cash or even putting itself up for sale in order to fund more vineyards and build a new winery.
Chapel Down served up a disappointing 11% drop in sales to £7.12 million for the half ended 30 June 2024 and downgraded its full year sales growth guidance to the single digits as a result.
Although palate-pleasing sales growth was served up in the on-trade, export and direct to consumer channels, these were offset by challenges in the off-trade, where the usual sparkling wine re-stocking by retailers failed to materialise and Chapel Down lapped tough prior year comparatives inflated by the King’s Coronation.
Profitability for the half was almost wiped out, with pre-tax profits plunging nearly 100% to £40,000 after the drinks group soaked up an array of higher costs and accounted for an expected lower fair value adjustment on its biological assets.
WHAT DID CARTER SAY?
Carter insisted: ‘Chapel Down continues to be the market leader in the English wine industry, with the leading brand, the deepest distribution and internationally celebrated wines.’
He added: ‘2024 has seen continued strategic and operational progress with robust trading, particularly in the on-trade, export and direct-to-consumer channels which shows continued, strong consumer demand. In the first half, this has been offset by some challenges in the off-trade, predominantly caused by one-off factors.’
Chapel Down’s status as the most recognised English wine brand is supported by its partnerships with flagship sporting and cultural events including Ascot, The Boat Race and Tom Kerridge’s Pub in the Park festival series.
The company also has over 10,000 retail investors who enjoy discounts on Chapel Down’s wines, tours and tastings at the home of the brand at Tenterden in Kent.
