FY23 results in line; excellent execution on strategy

As anticipated the FY23 results are strong and in line at an underlying level, whilst statutory PBT (pre exceptionals) is up by a standout 163%. In short, a further reminder of the extensive progress being made by Chapel Down. With clear growth plans in place, we envisage further transformative years ahead. Whilst the move to IFRS accounting necessitates a re-modelling of our forecasts, they continue to show a 3-year revenue CAGR of 15% and continued profit progression. Our updated Base case ana

FY23 strong & in line; well positioned for FY24

An excellent, in line with expectations FY23 update, highlighting another year of profitable double-digit revenue growth (14%). The high margin and dominant sparkling wine category registered a great performance, growing by 25% - strong pricing and volume. Once again overall growth was broad and healthy across the 5 distribution channels, reinforcing CDGP’s scale. We make no forecast changes but maintain high conviction of double-digit revenue growth being maintained. The FY23 performance underl

Raising a glass to AIM move

Chapel Down has capped off a successful year with confirmation of its share listing moving onto AIM. This as a logical step and in keeping with the growth investment thesis. We remain upbeat about this market leader as it capitalises on a generational shift to the growing popularity of English sparkling wine. We forecast PBT to more than double in the next 3 years, with significant scope for value creation thereafter through appropriate investment. We maintain a positive stance.

Double good news – AIM move & an exceptional harvest

Further good news from Chapel Down proposed move to AIM and an exceptional 2023 harvest (3.8k tonnes of high-quality grapes vs 2.05k tonnes last year). We welcome the AIM news as it signals ongoing growth ambition of management. While we make no forecast changes, the strong harvest bolsters the doubling of revenue objective by FY26, with some upside risk to FY26 and beyond given more sparkling wine will be available to sell. Near term it provides a strong underpinning to our still/carbonated win

Strong interims reinforce growth thesis; TP raised to 56p

An excellent set of interims with delivery of strong double-digit revenue and EBITDA growth. There is good growth across key channels and further evidence of market share gains. Positive momentum has continued into Q3. An exceptional harvest is signalled as is active consideration of a listing on AIM. We make some forecast changes, lifting sales but conservatively maintain profit numbers. We reiterate our Buy and lift our TP to 56p (vs 52p). Recent sector M&A underpins our conviction in CDGP’s e

Strong H1 & positive outlook strengthens confidence

Chapel Down has released an excellent H1 update, reinforcing the structural attractions of English wine and another period of good execution by the new team. We cite the strong 21% revenue growth, further market share gains, good operational progress and prospects of a strong harvest this year as key highlights. Our confidence in the NAV being an underpinning to the investment case is reinforced by leading brand data. We make no forecast changes but see good scope to upgrade at the Sept interims

Shares trading >20% below adj. NAV; positive category data

Chapel Down share price in recent weeks has retreated to a 22% discount to our adj. NAV of 38p. This is overdone and offers an attractive entry point on deep value and structural growth considerations. Recent Nielsen off-trade data for English sparkling wine remains highly positive, with April numbers in particular stellar (boosted by the King’s coronation). The growing season is anticipated to have got off to a good start as has the brand relaunch over Q2. While we make no forecast changes, our

Sparkling growth

Chapel Down is a market leader, which is asset backed and offers multiple years of high growth. This is evidenced by FY22 finals with adj. PBT +22% to £1.7m. A generational shift to the growing popularity of English sparkling wine and premiumisation trends make for an attractive investment case. We forecast PBT to more than double by FY26 from the current asset base. Thereafter, our illustrative analysis shows deployment of new capital towards attaining 5% of the addressable market by FY32 (vs 2

Sparkling YE update with strong momentum entering 2023

Today’s YE update is excellent, with stellar growth of 53% in the higher margin sparkling wine category the stand out feature. Good progress is evident across all trade channels, market share is higher and momentum going into 2023 is strong. In short, new management is building a track record of delivery against the sparkling wine / premiumisation led strategy. English sparkling wine is in structural growth, benefiting from an improved maritime climate, international recognition and investment.

Exceptional 2022 harvest yield & quality

A very positive update today from Chapel Down on the all-important yearly harvest. The yield is a bumper 2k tonnes, a near historical high and significantly, of very high quality grapes. This is consistent with the Group’s premium strategic positioning and helps underpin outer year revenue expectations. The exceptional harvest news builds on the solid interims recently and supportive of the ambition to double the size of the business by 2026 (>£28m sales and >£5m EBITDA). English sparkling wine

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20th March 2024 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment object

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