Chapel Down’s share price has significantly dropped following strategic adjustments.
- The company withdrew its sale offer due to lack of beneficial transactions.
- Chapel Down anticipates decreased sales and profits for the full year.
- The UK’s second-worst harvest adversely affected the company’s financials.
- CEO Andrew Carter resigned following a challenging financial report.
Chapel Down, the UK’s largest winemaker, has recently faced significant financial turmoil. Following an announcement abandoning its sale, the company’s share price fell nearly 20%. This plunge has seen Chapel Down’s value decrease over 40% since the beginning of the year. The decision to withdraw from the sale was based on the absence of any transactions that promised enhanced long-term shareholder value.
Previously, in June, Chapel Down had considered the sale of the company as a part of a strategic review aimed at exploring funding options to support its growth plans, which included the establishment of new vineyards and a purpose-built winery. However, the company has readjusted its forecast for the full year, expecting both net sales and profits to decline on a year-on-year basis.
The company’s challenges have been compounded by the UK experiencing its second-worst harvest on record. This difficult season, marked by rain and pest issues, forced Chapel Down to incur a non-cash charge ranging between £750,000 and £850,000. Such setbacks have undoubtedly contributed to the adjustment in financial expectations.
Despite these issues, former CEO Andrew Carter had maintained optimism about the company’s ‘operational progress with robust trading’. However, he acknowledged that the half-year results were negatively impacted by ‘challenges in the off-trade’. Carter’s resignation came amidst this backdrop, following a reported 22% decline in half-year profits, which dropped to £3.41 million from £4.78 million the year before, alongside an 11% dip in sales.
Chapel Down faces a challenging future as it navigates financial and operational hurdles.
