DJ CHAPEL DOWN GROUP PLC: COVID 19 Update
Chapel Down Group plc
("Chapel Down" or "the Company")
COVID 19 Update
Chapel Down Group plc, England's leading wine producer, today provides an update in light of the consequences of the COVID-19 pandemic.
This is a time of significant change. Chapel Down is England's strongest wine brand with a leading position in the UK grocery / off-trade, and rapidly growing on-line sales. With strong assets, good management and a healthy cash position, we believe we are very well placed to weather the crisis and thrive in the aftermath.
The management team and Board of Chapel Down have been focussed on delivering swift responses to a number of recent government announcements.
Following the Governments advice to close pubs, theatres and hospitality venues to contain the spread of the virus, we have seen our sales in supermarkets and off licenses grow substantially and our on-line sales multiply dramatically as customers seek to continue to enjoy our brands at home.
It is too early to extrapolate any trends but if the current sales rate continued the off-trade sales and on-line growth of our wines would more than make up for the loss of on-trade wine sales. It will certainly leave us with a stronger business and an increased market share in these areas where we see long term growth.
Sadly, we needed to close our tours, shop, restaurant and bar at the state of the art Curious Brewery in Ashford and our hospitality, shop and tours at our beautiful winery in Tenterden. Given that our beer and cider sales are largely focussed on the on-trade, in order to conserve our cash, we have taken the decision to stop brewing and close the brewery until the on-trade returns to normality. We have sufficient stocks / work in progress to trade through with bottled product to take home and online customers for up to 6 months.
We are grateful for the support shown by the Government in enabling us to furlough the staff directly affected by the change to the business. It will enable us to get back up to speed quickly when the all clear is given. The company has ensured that all furloughed staff are on 80% of their salaries/wages. Those still working will ensure we deliver to our off-trade customers and on-line consumers, will tend the vineyards and create the wines in the winery. We are ensuring that their safety is our first concern. We have moved staff to work from home wherever possible.
The board, executive and senior managers in the company have all taken 20-40% salary cuts for the duration. The company has also taken significant steps to conserve cash and reduce spend across the business and has suspended all non-contracted capital expenditure with the exception of the committed development of the vineyards planted in 2018 and 2019.
Following the above actions and based on prudent assumptions we have adequate cash for the foreseeable future.
Frazer Thompson, CEO commented - "These are challenging times, but we believe that the company is in a better position -- strong in on-line and off-trade sales -- than nearly all its competitors in English wine and craft beer. We have a good relationship with our bank HSBC, solid tangible assets and great brands. I believe we are in a very strong position to weather the crisis. Demand for our brands remains extremely healthy. We have taken swift and decisive action to ensure that the company is well placed for the aftermath and has the talent to compete immediately."
We will update the market and shareholders on further developments as and when they arise.
The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014.
Chapel Down Group plc Frazer Thompson Chief Executive Richard Woodhouse Finance Director 01580 763 033 finnCap Ltd Christopher Corporate Finance 020 7220 0500 Raggett/Simon Hicks ECM Tim Redfern
View source version on businesswire.com: https://www.businesswire.com/news/home/20200331005555/en/
Chapel Down Group plc
SOURCE: Chapel Down Group plc Copyright Business Wire 2020
(END) Dow Jones Newswires
April 01, 2020 02:00 ET (06:00 GMT)