**Summary of Chapel Down Group PLCs Half-Year Report (Unaudited) for the Period Ended 30 June 2025**
**Financial Performance Highlights**
**Revenue Growth** Net sales revenue increased by 11% to £7.9 million (H1 2024: £7.1 million), driven by strong performance in the Off-Trade channel (+30%) and Export (+17%). Wine-related sales grew by 14%.
**Gross Profit** Up 7% to £3.7 million, though gross margin declined slightly to 46.1% (H1 2024: 48.0%) due to higher costs and product mix changes.
**Operating Loss** Improved by 10% to £0.3 million (H1 2024: £0.33 million), with expectations of further improvement in H2.
**Adjusted EBITDA** Declined by 23% to £1.2 million (H1 2024: £1.6 million) due to lower non-cash fair value adjustments for biological produce.
**Net Debt** Increased to £11.3 million (H1 2024: £5.8 million) as the company invests in maturing stocks and cultivation.
**Net Assets** Decreased by 7% to £32.2 million, though the Board believes the market value of tangible assets is significantly higher than reported.
**Strategic Updates**
**Realignment of Priorities** The company redefined its medium-term strategic priorities, focusing on brand value enhancement, sustainable channel expansion, and disciplined capital management.
**Winemaking Capacity** Decided to optimize existing assets at Tenterden instead of investing in a new winery, leveraging third-party capacity for some premium still wines.
**Leadership Changes** Appointed Michael Spencer as Non-Exec Chair and welcomed CEO James Pennefather and CFO Louan Mouton to the executive team.
**Operational Achievements**
**Brand Leadership** Maintained category leadership in the UK Off-Trade channel with a 35% market share and strengthened brand awareness.
**Product Recognition** Won two Golds at the International Wine Challenge 2025, reinforcing wine quality.
**International Expansion** Successfully onboarded new distributors in the US (Jackson Family Wines) and Norway (Anora Group).
**Vineyard Development** Recent plantings at Boxley Abbey and Buckwell are progressing well, with full production expected in 2026 and 2027, respectively.
**Outlook**
**Harvest 2025** The warm summer provided ideal growing conditions, with forecasts of a high-quality vintage and <mark style="background-color:yellow">above</mark>-average yield.
**Full-Year Expectations** The Board remains confident in achieving market expectations for 2025, delivering strong sales growth and a return to full profitability.
**Gross Margin Improvement** Marginal improvement expected in H2 due to premiumization during the festive period.
**CEO and Chair Comments**
**James Pennefather (CEO)** Highlighted the company’s strong foundations, strategic focus, and potential for sustained profitable growth, both in the UK and key export markets.
**Michael Spencer (Chair)** Emphasized the company’s strong brand, established routes to market, and strategic investments positioning it for medium-term growth.
**Key Metrics**
**Vineyards:** 1018 acres planted (777 productive).
**Traditional Method Sparkling (TMS)** Increased to 70% of wine sales revenue (H1 2024: 68%).
**DTC Sales** Declined by 7% to £2.4 million, though long-term growth potential remains strong.
**Conclusion**
Chapel Down Group PLC demonstrated resilience and strategic focus in H1 2025, with strong revenue growth, operational efficiencies, and a clear path to profitability. The company is well-positioned to capitalize on the growing demand for English sparkling wine, both domestically and internationally, while maintaining its leadership in the category.