(‘CDG' or ‘the Company')
EPIC:
CDGP
AUDITED RESULTS FOR THE YEAR ENDED 31st
Chairman’s Report
I am delighted to announce another period of progress in the results for
the year ended
Key highlights:
-
Year on year combined sales up 10% to £13.016m (2017: £11.796m)*/**
-
Chapel Down Wine and Spirits sales up 11% to £8.977m (2017: £8.119m) -
Beer and Cider sales, in
Curious Drinks Limited , up 10% to £4.039m (2017: £3.677m)***
-
-
Wines and Spirits gross profit up 12% at £3.626m (2017: £3.244m) -
Beer and Cider gross profit (in
Curious Drinks Limited ) up 1% at £1.229m (2017: £1.224m) - On a like for like basis, EBITDA up 18% to £1,141k (2017: £968k)*/**** as we continue to reinvest in our brands, infrastructure and supply
-
A Gold Outstanding medal at
The International Wine and Spirits Challenge 2018 Awards for our Kit’sCoty Coeur de Cuvee 2013 along with a Gold for our Kit’sCoty Blanc de Blancs and Gold medals at The Decanter World Wine Awards for our Kit’sCoty Blanc de Blancs and Kit’sCoty Coeur de Cuvee 2013 and our still Chardonnay 2013 -
Additional 102 acres of new vineyards planted on chalk terroir in
Kent -
Brewery build complete and open to the public from 10th
May 2019 - In October we completed on the Lease of a further 388 acres of prime viticultural land adjoining our existing vineyards on the North Downs
-
In December we completed on the Lease of a 5,000 sqft site in King’s
Cross,
London by the Regent’s Canal where we have opened the “Chapel Down Gin Works” an experiential bar, restaurant and Gin Works - Extraordinary harvest – over double our highest ever harvest and excellent quality
* For the years ended
**
Includes 12 months of Beer and Cider sales for
*** In
**** Excludes the effect of the
FRS 102 Section 26 share option accounting adjustment of £57k (2017:
£75k) which is a non-cash item.
2018 has been a busy year preparing the Company for further growth. 388
new acres of prime vineyard land will produce up to 1 million extra
bottles of wine per annum. Our gin and vodka have had critical acclaim
and we have developed a new experiential brand home on the
We will continue to make substantial investments over the coming years in planting more vineyards, developing our winery, improving our commercial infrastructure, hiring and training the best talent and creating smart effective marketing to ensure that we build the strongest quality brands and are therefore best placed for future growth and any industry consolidation.
Our assets are supportive of the business: land – and high quality vined
land in particular – continues to appreciate, our brand assets are more
valuable than ever and our balance sheet is strong. We enjoy the custom
and support of our many shareholders who tell the
Chairman
Chief Executive’s Commentary
With sales growth of 10% in the group (up 11% on wine and spirits and up
10% on beer and cider), we are able to invest the proceeds to build the
business whilst still delivering growth in like for like EBITDA (+18% vs
2017). With eight years of strong compound revenue growth of 22% per
annum,
We were blessed with an extraordinary harvest this year. Our average yields per acre were up some 97% and with the addition of new plantings starting to produce, our heroic vineyard and winemaking team were able to secure well over double the volume of fruit in good condition to enable us to build our stocks and to start to satisfy the excess demand for our wines. With a further five International Gold Medals in 2018, we are surprising and delighting more wine lovers than ever. Our brand home at Tenterden saw sales increase by 17% as visitor numbers improved thanks to excellent weather, improved awareness and better facilities and range at the vineyard.
We enjoyed a very successful first full year for our new gin and vodka which use the skins of our grapes to create a real point of difference in a crowded market. The proposition has received widespread critical acclaim with the liquid picking up Double Gold in the Spirits Masters and the bottle design receiving a prestigious D&AD award. With the addition of a new brand experience home at Kings Cross, we also took another step forward in creating a better brand for today’s knowledge-hungry, discerning consumer. The initial reaction has been extremely positive.
Our beer and cider performance has been steady as we continue to invest
in our own brewery which opened in
Along with many other drinks businesses our performance was slightly
affected by the collapse of Conviviality, but we are pleased to see the
recovery under C&C. We continue to be able to offer our beers, wines and
spirits to the widest range of customers in the
Performance Review
The combined business continued to grow in sales and gross profit of
both
Table 1
|
Beer and Cider | Combined Businesses | |||||||||||||||||
FY 2018 |
FY |
%age |
FY |
FY |
%age |
FY 2018 |
FY 2017 |
%age |
|||||||||||
£’000 | £’000 | £’000 | £’000 | £’000 | £’000 | ||||||||||||||
Turnover | 8,977* | 8,119 | +11% | 4,039 | 3,677 | +10% | 13,016 | 11,796 | +10% | ||||||||||
Gross profit | 3,626** | 3,244 | +12% | 1,229 | 1,224 | +1% | 4,855 | 4,468 | +9% | ||||||||||
Gross profit %age | 40% | 40% | 30% | 33% | 37% | 38% | |||||||||||||
* £9,067k less £90k consolidation adjustment |
|||||||||||||||||||
** £3,716k less £90k consolidation adjustment |
We have made a conscious decision to continue reinvesting any surplus
cash in our people, our systems and our brands. Nonetheless the total
business reported like for like EBITDA of £1,141k, up 18% compared with
£968k**** in the year to
Gross margins on beer and cider have declined following the forced change of our brewing partner in 2017 which has also limited our scope for short term volume growth whilst developing the brand and managing supply. At 30% gross margin from contracted out brewing, we are satisfied with its performance.
We believe that there is great potential in our brands. They are well positioned, well managed and in attractive growth markets. We will accelerate our investment in planting new vineyards on the finest land and develop our winery and tourism infrastructure in Tenterden and look to improve our capacity and quality. We will benefit from the awareness, excitement, product freshness and duty savings from our new brewery in Ashford and win new friends and customers as we continue to innovate and excite the drinks business with initiatives like our gins and vodka and the Gin Works at Kings Cross.
In addition to being cited as one of the London Stock Exchange’s 1000
Companies to Inspire Britain, we are members of the influential
As highlighted in the notes to the Chairman’s Report, from
Table 2
Per |
Remove 11 |
Other |
Adjusted |
Per |
|||||||
2018
£ |
2018
£ |
2018
£ |
2018
£ |
2017
£ |
|||||||
Turnover | 12,863,428 | (3,886,595) | 90,000 | 9,066,833 | 8,119,453 | ||||||
Cost of sales | (8,065,725) | 2,715,008 | - | (5,350,717) | (4,875,034) | ||||||
Gross profit | 4,797,703 | (1,171,587) | 90,000 | 3,716,116 | 3,244,419 | ||||||
Administrative |
(5,574,326) | 2,529,758 | (32,993) | (3,077,561) | (2,698,528) | ||||||
Share based |
(57,161) | - | - | (57,161) | (75,416) | ||||||
Operating profit | (833,784) | 1,358,171 | 57,007 | 581,394 | 470,475 | ||||||
Share of loss of |
(47,873) | - | (740,816) | (788,689) | (226,329) | ||||||
Interest |
63,183 | (5,391) | 113,751 | 171,543 | 27,394 | ||||||
Interest payable |
(31,854) | 133,910 | (113,751) | (11,695) | (18,425) | ||||||
(Loss)/profit |
(850,328) | 1,486,690 | (683,809) | (47,447) | 253,115 | ||||||
Tax on |
(63,250) | 1,193 | - | (62,057) | (130,704) | ||||||
(Loss) for the |
(913,578) | 1,487,883 | (683,809) | (109,504) | 122,411 | ||||||
Adjusted EBITDA | |||||||||||
Operating profit | (833,784) | 1,358,171 | 57,007 | 581,394 | 470,475 | ||||||
Share based |
57,161 | - | - | 57,161 | 75,416 | ||||||
Depreciation and |
621,227 | (151,607) | 32,993 | 502,613 | 421,843 | ||||||
EBITDA excluding |
(155,396) | 1,206,564 | 90,000 | 1,141,168 | 967,734 |
Wine and spirits sales grew 11% in the year to £8.977m. We have broad
premium distribution in the national retailers including
Our sparkling wines continue to set the standard for the industry, offering outstanding quality and value at every price tier. We will manage the sales of these wines to ensure we can build reserve stock to enable us to manage our customers and our growth. With more international accolades and very strong demand from a consumer seeking something more interesting and distinctive than Champagne, we are confident in our plans to increase the acreage of our vineyards. Our still wines (which are more individual vintage dependent, but much of which can be released in the year following vintage) have also been winning international accolades and wide critical acclaim particularly at the premium end. As a result we continue to see strong demand and excellent sell through.
In the vineyards we continue to improve the quality of the wines we make through the management of our own vineyards and the spread of good practice with our 24 partner vineyards. We apply the most modern viticultural techniques to ensure we get the finest fruit.
In the winery, the fruit is being made into the best possible wine through the expertise of a young winemaking team who use the latest technology and equipment. In a highly competitive market, both vineyard and winery teams are constantly challenged to surprise and delight, and that spirit is reflected in the innovative wines and products that we have created to ensure we remain at the forefront of consumers’ minds. And they find us thanks to the wide availability and constant stream of exciting news about the Company and its brands.
We will continue to invest in creating further high quality supply from the best sites we can find. We have planted a further 102 acres taking the total planted on long term leased land to 274 acres since 2015. We now have 635 acres of vineyard planted from which to source our fruit. In 2018 we were delighted to secure a further 388 acres of prime viticultural land adjoining our existing vineyards on the North Downs. This will be planted over the next 2 years taking our total acreage under vine to in excess of 950 acres which will be fully productive from 2024/25. In an average year it should be producing some 2.4m bottles of wine. We will continue to invest in further capacity and equipment to enhance efficiency and quality in the winery over the coming years, improving our systems and processes as well as building a world class brand and team.
Beer and Cider
Beer and cider sales in
We continued to manage our growth through a focus on premium accounts -
top end restaurants, bars, hotels and premium off-trade - while we
completed the construction of our new brewery. We have national
distribution through Majestic and
We have a unique and distinctive consumer proposition – a winemaker’s
beer – which is increasingly rare in an exciting and growing albeit
highly competitive beer market. This real point of difference will be
enhanced by the opening earlier this month of the new brewery and
visitor facility in Ashford. It is just 38 minutes from
The custom-built state of the art brewhouse will enable us to produce
more even better fresher Curious beer. We have added to the team
bringing in Brewmaster Matthew Anderson to oversee brewing on the site.
Matthew joins the team having spent over a decade in brewing roles at
We have developed unique experiential and product partnerships,
launching our Curiouser & Curiouser small batch series in collaboration
with Wild Beer Co, Brew By Numbers, Fourpure Brewing Co and Beavertown
and working as headline partner for the
Business risks and uncertainties
Brexit has had no significant impact on our business to date. In an area of full employment, we may be affected if we were not able to continue to access EU or other foreign workers for our viticulture and to mitigate that risk we will be looking at trialling the latest mechanical picking technology in 2019. However, we believe that maintaining and developing a strong brand and building a team of very high quality people are our best defence and we will continue to invest wisely to ensure we are best placed and risk is minimised.
There is a risk of a poor grape harvest through extreme weather events which we mitigate through maintaining the highest standards of viticulture, choosing the very best sites and utilising the latest proven advances in technology and agriculture. We source from a wide geographic area to minimise micro-climatic variations that can blight individual sites. The diversification into beer and spirits also further protects our ability to continue to grow. The risk of a poor hop harvest also exists and the group mitigates this risk by buying forward contracts on its key hops.
Competition continues to grow but we continue to invest in our people, brands and distribution to ensure that the business can continue to thrive.
Outlook
We know we are lucky to work in a great British industry and an exciting business. Our drinks tell a story. They are delicious. They are a reason to get together.
We are passionate about growing that congregation – introducing uniquely delicious products to enlightened consumers everywhere.
We are on a pilgrimage to get drinkers to fall in love with our brands so we can share their most special moments with them.
We think there is little point in just simply trying to be the best. That’s simply not good enough any more. We have to be the only people who can do what we do. That excites us and that’s what makes our brands stronger.
We think we have something special. Brands that are more interesting. Brands that have a relevant and engaging story to tell. Brands that have a real point of difference. Brands that try harder.
The launch of Kits Coty premium wines and the consumer and trade
interest in
Beer and cider growth will be accelerated as we build out the brewery and create more interest and engagement around the Curious brand. Recent listings in Tesco and on trade chains are exciting.
Our
Finally – to all our shareholders, thank-you. Its great to see so many of you using your shareholder benefits to get great discounts on our wines, beers and spirits. The energy, support and excitement that you create is something the whole team appreciate.
So let’s raise a glass. To you. To us. The curious optimists. The believers.
Chief Executive Officer
****Excludes the effect of the FRS 102 Section 26 share option accounting adjustment of £57k (2017: £75k) which is a non-cash item. Refer to note 1 “Basis of preparation/accounting policies” for further information.
Contact
|
Chief Executive
Finance Director |
01580 763 033 | ||||||
finnCap Ltd
|
Corporate Finance ECM |
020 7220 0500 |
The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31ST
2018
£ |
2017
£ |
||||
1 | 2 | ||||
Turnover | 12,863,428 | 8,119,453 | |||
Cost of sales | (8,065,725) | (4,875,034) | |||
-------------- | -------------- | ||||
Gross profit | 4,797,703 | 3,244,419 | |||
Administrative expenses | (5,574,326) | (2,698,528) | |||
Exceptional administrative expenses | (57,161) | (75,416) | |||
-------------- | -------------- | ||||
Operating (loss)/profit | (833,784) | 470,475 | |||
Income from participating interests | (47,873) | (226,329) | |||
Interest receivable and similar income | 63,183 | 27,394 | |||
Interest payable and expenses | (31,854) | (18,425) | |||
-------------- | -------------- | ||||
(Loss)/profit before tax | (850,328) | 253,115 | |||
Tax on (loss)/profit | (63,250) | (130,704) | |||
-------------- | -------------- | ||||
(Loss)/profit for the financial year | (913,578) | 122,411 | |||
========= | ========= | ||||
Loss for the year attributable to: | |||||
Non-controlling interests | (747,066) | - | |||
Owners of the parent company | (166,512) | 122,411 | |||
-------------- | -------------- | ||||
(913,578) | 122,411 | ||||
Adjusted performance measures | |||||
Adjusted EBIDTA | |||||
Operating (loss)/profit | (833,784) | 470,475 | |||
Share based payment | 57,161 | 75,416 | |||
Depreciation and amortisation | 621,227 | 421,843 | |||
-------------- | -------------- | ||||
EBITDA excluding share based payment | (155,396) | 967,734 | |||
========= | ========= | ||||
(Loss)/Profit per share – diluted (pence) | (0.12) | 0.11 |
There was no other comprehensive income for 2018 (2017 - £Nil).
1. Represents the consolidated audited results for
2.
Represents the consolidated audited results for
CONSOLIDATED BALANCE SHEET FOR THE YEAR ENDED 31ST
2018
£ |
2017
£ |
||||
Fixed assets | |||||
Intangible assets | 126,380 | - | |||
Tangible assets | 18,515,540 | 10,302,885 | |||
Investments | - | 642,027 | |||
-------------- | -------------- | ||||
18,641,920 | 10,944,912 | ||||
Current assets | |||||
Stocks | 7,679,702 | 4,561,202 | |||
Debtors due within one year | 3,610,758 | 2,783,743 | |||
Debtors due after more than one year | - | 1,463,377 | |||
Cash at bank and in hand | 12,829,910 | 19,716,585 | |||
-------------- | -------------- | ||||
24,120,370 | 28,524,907 | ||||
Creditors: amounts falling due within one
year |
(7,496,467) | (3,505,496) | |||
-------------- | -------------- | ||||
Net current assets | 16,623,903 | 25,019,411 | |||
-------------- | -------------- | ||||
Total assets less current liabilities | 35,265,823 | 35,964,323 | |||
Creditors: amounts falling due after more
than one year |
(23,815) | (1,825,858) | |||
Provisions for liabilities | |||||
Deferred tax | (224,778) | (223,572) | |||
-------------- | -------------- | ||||
Net assets | 35,017,230 | 33,914,893 | |||
========= | ========= | ||||
Capital and reserves | |||||
Called up share capital | 7,073,473 | 6,905,860 | |||
Share premium account | 25,812,929 | 24,513,930 | |||
Revaluation reserve | 1,106,021 | 1,144,652 | |||
Non-controlling Interests | (254,924) | - | |||
Profit and loss account | 1,279,731 | 1,350,451 | |||
-------------- | -------------- | ||||
35,017,230 | 33,914,893 | ||||
========= | ========= |
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31ST
2018
£ |
2017
£ |
||||
Cash flows from operating activities | |||||
(Loss)/profit for the financial year | (913,578) | 122,411 | |||
Adjustments for: | |||||
Amortisation of intangible assets | 16,948 | 46,221 | |||
Depreciation of tangible fixed assets | 604,279 | 375,622 | |||
Share of operating loss in associate | 47,873 | 226,329 | |||
Share based payments | 57,161 | 75,416 | |||
Interest payable | 31,854 | 18,425 | |||
Interest receivable | (63,183) | (27,394) | |||
Taxation charge | 63,250 | 130,704 | |||
(Increase) in stocks | (2,502,658) | (100,394) | |||
(Increase) in debtors | (934,529) | (278,702) | |||
Increase in creditors | 483,044 | 913,222 | |||
Corporation tax (paid) | (26,014) | (12,055) | |||
-------------- | -------------- | ||||
Net cash generated from operating activities | (3,135,553) | 1,489,805 | |||
-------------- | -------------- | ||||
Cash flows from investing activities | |||||
Purchase of intangible assets | (37,200) | - | |||
Purchase of tangible fixed assets | (8,366,485) | (2,791,022) | |||
Cash acquired on consolidation of |
1,554,559 | - | |||
Interest received | 60,072 | 155 | |||
Interest received from associate undertaking | 3,111 | 27,239 | |||
-------------- | -------------- | ||||
Net cash from investing activities | (6,785,943) | (2,763,628) | |||
-------------- | -------------- | ||||
Cash flows from financing activities | |||||
Issue of shares | 1,466,612 | 17,813,368 | |||
New secured bank loans | 3,570,000 | 2,000,000 | |||
Repayment of bank loans | (1,969,937) | (30,063) | |||
Interest paid | (31,854) | (18,425) | |||
-------------- | -------------- | ||||
Net cash used in financing activities | 3,034,821 | 19,764,880 | |||
-------------- | -------------- | ||||
Net (decrease)/increase in cash and cash equivalents | (6,886,675) | 18,491,057 | |||
Cash and cash equivalents at beginning of year | 19,716,585 | 1,225,528 | |||
-------------- | -------------- | ||||
Cash and cash equivalents at the end of year | 12,829,910 | 19,716,585 | |||
========= | ========= | ||||
Cash and cash equivalents at the end of year comprise: | |||||
Cash at bank and in hand | 12,829,910 | 19,716,585 | |||
-------------- | -------------- | ||||
12,829,910 | 19,716,585 | ||||
========= | ========= |
1. BASIS OF PREPARATION/ACCOUNTING POLICIES
The Company’s report for the year ended
The accounting standard requires the Company to restate its profit to attribute a notional cost of non-cash share option agreements to the business. After adopting the standard, the accounts show a decrease in profit of £57,161 (2017: £75,416) resulting in a Group pre-tax loss of £850,328 (2017: pre-tax profit of £253,115).
The Company is required to value net assets in accordance with the
Company’s reporting standard (
The statutory accounts for the year ended
2. BALANCE SHEET REVIEW
The net asset value of the Company as at 31st
• Fixed assets of £18,641,920 includes the 2015 market value of the
sites at Tenterden and Kit’s Coty as well as the vineyard development
expenditure at Kit’s Coty and at
• £7,679,702 of stock is valued at cost being the lower of cost or net realisable value.
3. PROFIT PER SHARE
The calculation of the loss per share for the year ended
4. DISTRIBUTION OF THE FULL YEAR STATEMENT
Copies of this statement will be available for collection free of charge
from the Company’s registered office at
View source version on businesswire.com: https://www.businesswire.com/news/home/20190529005996/en/
Source: