Chapel Down is considering a sale of its business in order to explore funding options for its growth plans.

England’s largest winemaker said in a strategic review statement that as part of its growth strategy, it was looking to invest in new vineyards, a new purpose-built winery to be operational by the 2026 harvest and the development of its brand home in Tenterden, Kent.

It added that given the timeline of these investments, the board believes that now is the right time to review the range of “long-term funding options that support this plan”.

Chapel Down, which has supplied wine to The Royal Opera House and 10 Downing Street, said that it remains on-track to deliver double digit sales growth in 2024 and retains a strong balance sheet with headroom to its existing debt facility, having reached an agreement in principle to extend and increase this facility.

Following the announcement by the English winemaker, which is listed on London’s AIM market, shares dropped by 5%, according to the FT.

Investment director at AJ Bell, Russ Mould, said: "Coming so soon after moving from the Aquis stock exchange to AIM, one might think something negative is afoot. Yet it makes sense to have raised the company’s profile by switching exchanges ahead of putting the ‘for sale’ flag up.

"Chapel Down has made a name for itself over the years but the business appears to have a hit the ceiling in terms of scale. To grow even more, it really needs a big slug of cash to invest in the business and that might be better coming from a new, bigger owner, rather than going cap in hand to shareholders on an ad hoc basis.

"Plenty of big drinks companies would be in the market for a niche player like Chapel Down as it could add something new for them to get their teeth into, and also as a way of cross-selling products."

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