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(Correcting off-trade sales figure for the first half of 2025.) Chapel Down PLC on Wednesday said it was targeting a return to profitability by the end of 2025, after swinging to a loss in the first-half. The Kent, England-based still and sparkling wine maker posted a pretax loss of £687,000 for the six months that ended June 30, compared to a profit of £40,000 a year earlier. Net sales revenue edged up 11% to £7.9 million from £7.1 million. Off-trade sales increased 30% to £3.8 million from £2.9 million, while on-trade business remained broadly stable at £1.2 million. Export sales were up 17% at £499,000 while eCommerce fell 5% to £1.4 million. Chapel Down noted a £202,000 fair-value gain associated with biological produce, compared to a £773,000 gain the previous year. Exceptional costs totalled £221,000, down slightly from £224,000 on-year, and related to payments for a 2024 strategic review, the firm said. Cost of sales rose to £4.2 million from £3.7 million. Operating loss was £318,000, swinging from profit of £218,000 on-year. Before adjustment and exceptional costs however, the firm said its operating loss had narrowed to £299,000 from £331,000. Chapel Down noted the cost of goods related to Traditional Method Sparkling sales were ‘substantially higher than older vintages’ which were sold in the first half of 2024, due to ‘above-average inflationary pressures related to the 2022 harvest across materials, utilities and labour.’ Adjusted earnings before interest, tax, depreciation and amortisation reduced by 23% to £1.2 million from £1.6 million the previous year. Diluted loss per share widened to 0.33 pence from 0.05p. The gross margin slipped to 46.1% from 48.0%, diluted by ‘a higher proportion of less profitable Still wine revenue’ than the previous year, which benefited from an ‘exceptional’ harvest in 2023, the firm said. ‘The planned exit of the lower margin spirit business in 2024...contributed to an increase in gross margin for H1 2025, however this was offset by phasing of the events calendar and not selling any more Vine to Wine and Vine Lease initiatives in H1 2025,’ Chapel Down added. Net debt expanded to £11.3 million at June 30 from £5.8 million on-year. Chapel Down forecast an ‘above-average yield’ after a summer of good growing conditions, though the outcome depends on harvest conditions in the weeks ahead. The company plans to update further on this in October. It said that trading has remained ‘robust’, particularly in the Off-Trade channel, and maintained confidence in meeting full-year market consensus with ‘strong sales growth and a return to full profitability’. Chapel Down also expects ‘marginal improvement on gross margins’ during the second half through the festive trading period. ‘We continue to see significant future potential both within the UK and in key export markets and believe that our leading brand remains well positioned to benefit from the positive consumer engagement we are seeing within the category,’ commented Chief Executive James Pennefather. New Chair Michael Spencer added: ‘Chapel Down is well-positioned to benefit from the underlying momentum of the English sparkling wine category to deliver sustained profitable growth in the medium-term.’ Spencer’s appointment as non-executive chair came into effect this month, as former Chair Martin Glenn stepped down from the role. Spencer is the billionaire founder of interdealer broker ICAP. Via his investment vehicle IPGL, Spencer is the largest shareholder in Chapel Down with a 27.3% stake. Looking ahead, Chapel Down plans ‘to optimise existing winemaking assets at Tenterden and not to invest in a new winery.’ It is targeting ‘an equivalent 1% share of the global Champagne market by 2035.’ Chapel Down shares closed 7.1% higher at 45.00 pence each on Wednesday in London. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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