23 May 2024
Gusbourne
Plc
("Gusbourne", the
"Company" or the "Group")
Final Results for the year
ended 31 December 2023 & Notice of AGM
The Board of Gusbourne Plc (AIM:
GUS) is pleased to announce its audited results for the year ended
31 December 2023.
Robust net revenue growth,
up 13% at £7.1m, gross profit up 30% at £4.8m and Adjusted EBITDA
loss narrowed to £0.7m, a 41% reduction from the prior
period.
|
|
2023
£'000
|
2022
£'000
|
Change
%
|
|
Net revenue & adjusted
EBITDA
|
|
|
|
|
Net revenue (1)
|
7,052
|
6,243
|
13%
|
|
Gross
profit
|
4,808
|
3,697
|
30%
|
|
Adjusted
EBITDA (2)
|
(669)
|
(1,131)
|
41%
|
|
Gross
profit %
|
68.2%
|
59.2%
|
|
|
|
|
|
|
|
Statutory results
|
|
|
|
|
Net
revenue(1)
|
7,052
|
6,243
|
13%
|
|
Gross
profit
|
4,808
|
3,697
|
30%
|
|
Fair
value movement in biological produce
|
(46)
|
(239)
|
|
|
Sales and
marketing expenses
|
(3,565)
|
(3,479)
|
|
|
Administrative expenses
|
(1,912)
|
(1,481)
|
|
|
Depreciation
|
(661)
|
(601)
|
|
|
Total
Administrative expenses
|
(6,138)
|
(5,561)
|
|
|
|
|
|
|
|
Operating
profit/(loss)
|
(1,376)
|
(2,103)
|
|
|
|
|
|
|
|
Reconciliation of operating
profit/(loss) to adjusted EBITDA
|
|
|
|
|
Operating
profit/(loss)
|
(1,376)
|
(2,103)
|
|
|
|
|
|
|
|
Add
back;
|
|
|
|
|
Depreciation
|
661
|
601
|
|
|
Aborted
planning and capital expenditure write-off
|
-
|
132
|
|
|
Fair
value movement in biological produce
|
46
|
239
|
|
|
Adjusted
EBITDA(2)
|
(669)
|
(1,131)
|
|
(1) Net revenue is revenue
reported by the Group after excise duties payable
(2) Adjusted EBITDA means
profit/(loss)from operations before aborted planning and capital
expenditure write-off, fair value movement in biological produce,
interest, tax, depreciation and amortisation.
Highlights of 2023 include:
• UK
wine sales growth up by 16.5% to £4.9m (2022: £4.2m), maintaining
strong double-digit sales growth across our direct to consumer
("DTC") and UK Trade sales channels, in spite of the challenging
macroeconomic environment in the second half of 2023.
•
Net revenue*
up by
13.0% to
£7.1m (2022:
£6.2m) with strong growth across the Group's
three main distribution channels:
o UK Trade sales up by 13% (2022: 53%) to £3.5m (2022:
£3.1m)
o Direct to consumer ("DTC") net revenue which includes tours
and related cellar door operations in Kent, was up by 18% to £2.0m
(2022: £1.7m)
o International sales up by 7% (2022: 78%) to £1.5m (2022:
£1.4m)
•
A five-year
CAGR (compound
annual growth
rate) in
net revenue
of 41%
(2022: 44%)
•
Gross profit up by 30% to £4.1m (2022: £3.7m) with margin
significantly improved at 68.2% (2022: 59.2%)
•
Adjusted EBITDA** loss narrowed to £0.7m (2022:
£1.1m)
•
Ongoing success
in international
and UK
wine competitions
with an
impressive number of awards for its wines, including gold
medals and trophies
* Net revenue represents Revenue
after deducting excise duties
** Adjusted EBITDA means
profit/(loss)from operations before aborted planning and capital
expenditure write-off, fair value movement in biological produce,
interest, tax, depreciation and amortisation.
Jonathan White, Chief Executive Officer,
said:
"2023 saw significant financial, operational and strategic
progress for Gusbourne resulting in another year of double digit
revenue growth. Good performances were achieved across all three of
the Group's distribution channels as we continue to expand our
customer base both in the UK and overseas, reinforcing the
Gusbourne brand as a leading light in the dynamic and fast growing
English fine wine market.
"Trading in 2024 has continued in line with our expectations.
Whilst the macro-economic environment remains complex with subdued
consumer confidence still causing hesitancy and cautiousness in
many markets, consumer interest in Gusbourne and English wine
generally continues to grow across the globe, strengthening our
confidence in the Group's future prospects.
"We expect to benefit from increased supply and inventory in
the year ahead as our wines produced from mature vineyard holdings
have aged in the cellar, and the ongoing expansion of our
international presence, with two new markets already opened in
2024. In 2023 we harvested our biggest yield to date with
Chardonnay, Pinot Noir and Pinot Meunier grapes showing fine
expressiveness and we expect them to produce some outstanding
wines, which will be bottled during the summer of 2024, further
adding to our inventory levels for sale in future
years.
"I was absolutely thrilled to be appointed Chief Executive
Officer in January 2024 and am excited to be leading the business
at this poignant moment for the industry. I have thoroughly enjoyed
my five and half years with Gusbourne and am relishing the prospect
of driving this special business forward into the future,
implementing our vision and growth strategy."
Annual General Meeting
The Company's annual report and
accounts for the year ended 31 December 2023 will be posted to
shareholders on Thursday 23 May 2024, together with notice of the
Annual General Meeting to be held at 11am on Friday 14 June 2024 at
the offices of Fieldfisher LLP at Riverbank House, 2 Swan Lane,
London EC4R 3TT.
Watch here to
see Jonathan White, CEO & Katherine Berry, CFO present full
year 2023 results for the period ended 31 December 2023.
Enquiries:
|
Gusbourne Plc
|
|
|
Jonathan White
|
+44
(0)12 3375 8666
|
|
Phil Clark, Investor
Relations
|
|
|
Panmure Gordon (UK) Limited (Nomad and Sole
Broker)
|
|
|
James Sinclair-Ford / Ailsa
Macmaster
|
+44 (0)20 7886 2500
|
|
Hugh Rich
|
|
|
Media:
|
|
|
Kate Hoare / Ben Robinson / India
Spencer (Houston)
gusbourne@houston.co.uk
|
+44
(0)20 4529 0549
|
Note: This and other press releases
are available at the Company's
website: www.gusbourne.com/investors
This announcement contains inside information for the
purposes of article 7 of the Market Abuse Regulation (EU) 596/2014
as amended by regulation 11 of the Market Abuse (Amendment) (EU
Exit) Regulations 2019/310. With the publication of this
announcement, this information is now considered to be in the
public domain.
Note to Editors
Gusbourne produces and distributes
a range of high quality and award winning vintage English sparkling
wines from grapes grown in its own vineyards in Kent and West
Sussex.
The Gusbourne business was founded
by Andrew Weeber in 2004 with the first vineyard plantings at
Appledore in Kent. The first wines were released in 2010 to
critical acclaim. Following additional vineyard plantings in 2013
and 2015 in both Kent and West Sussex, Gusbourne now has 93
hectares of mature vineyards. The NEST visitor centre was opened
next to the winery in Appledore in 2017, providing tours, tastings
and a direct outlet for our wines.
Right from the beginning,
Gusbourne's intention has always been to produce the finest English
sparkling wines. Starting with carefully chosen sites, we use best
practice in establishing and maintaining the vineyards and conduct
green harvests to ensure we achieve the highest quality grapes for
each vintage. A quest for excellence is at the heart of everything
we do. We blind taste hundreds of samples before finalising our
blends and even after the wines are bottled, they spend extended
time on their lees to add depth and flavour. Once disgorged, extra
cork ageing further enhances complexity. Our winemaking process
remains traditional, but one that is open to innovation where
appropriate. It takes four years to bring a vineyard into full
production and a further four years to transform those grapes into
Gusbourne's premium sparkling wine.
Gusbourne's luxury brand enjoys
premium price positioning and is distributed in the finest
establishments both in the UK and abroad. Our wines can be found in
leading luxury retailers, restaurants, hotels and stockists, always
being aware that where we are says a lot about who we
are.
For more information, visit
www.gusbourneplc.com
Chairman's statement
The continued expansion of the
global appetite for English fine wine has once again underpinned
Gusbourne's robust revenue growth, with 2023 marking another year
of good progress for the Group both at home and abroad. Since
our first vines were planted almost twenty years ago, Gusbourne has
focused on building strong foundations with a view to driving
long-term value creation for all our stakeholders, striving from
the outset to establish and maintain a premium product and market
position, whilst achieving international brand recognition and
pursuing multiple revenue streams. The world class quality of our
products remains of critical importance and the latest milestone in
this journey was marked by the launch of the second vintage of our
prestige sparkling wine, Fifty One Degrees North, to notable
critical acclaim worldwide.
All sales channels delivered
growth during the year and our gross profit increased by a very
pleasing 30% on higher margins. Our DTC net revenue grew by 18% to
£2.0m, driven by cellar door operations in Kent, as customers
responded positively to an expanded product offering and increased
Nest capacity, as well as sales online and via new membership
programmes. Our UK Trade revenue grew by 13% to £3.5m as the
industry continued to profile wine produced in England and we
opened a number of new accounts and listings. Our international
revenue grew by 7% to £1.5m as we increased our presence across 33
export markets, with distribution in more new territories planned
in 2024 and beyond.
Our strategy is firmly on track to
deliver against previously announced scale and profitability
ambitions. We remain fully committed to driving increasing
revenue across a growing range of premium sparkling and still wine
products combined with related experiential services which will
help to further cement the brand's luxury positioning. Delivering
EBITDA breakeven is a key priority for 2024.
The Board
We made several changes to our
Board during the year to support Gusbourne's ongoing growth and
execution of our detailed corporate strategy. We appointed Jonathan
White as Chief Executive Officer in January 2024 after a rigorous
search process. Jonathan has been at Gusbourne since 2018, most
recently as Marketing Director. Simon Bradbury also joined the
Board, as Chief Commercial Officer, previously our Global Sales
Director. We said farewell to the retiring Paul Bentham and Andrew
Weeber, as well as our previous Chief Executive and Head Winemaker
Charlie Holland. I would like to thank them sincerely for
their hard work and dedication in helping to establish Gusbourne as
the leading fine wine producer in England.
The Gusbourne Team
I remain extremely proud of the
hard work and commitment shown by the entire Gusbourne team who
always
show up with a winning attitude.
It was rewarding for the Board to be able to make several internal
promotions over the year, including Mary Bridges as Head Winemaker
and Alastair Benham as Head of Wine Operations, alongside Jonathan
and Simon being promoted to the Board.
Outlook
While the macro-economic outlook
in the UK remains uncertain with consumer confidence still fragile,
the Board remains confident in the future success of Gusbourne, who
are well positioned as a leading light in the rapidly growing
English fine wine production market. We expect to continue seeing
good momentum in our D2C, Corporate, Global Travel Retail and
International channels, while trade sales in the UK are likely to
remain cautious in the short-term. We have all the key ingredients
in place for long-term success with great product, great
distribution, and a great team. I very much look forward to another
exciting year ahead of targeting revenue growth and adjusted EBITDA
breakeven.
Jim Ormonde
Chairman
Chief Executive Officer's review
2023 was another year of
significant financial, operational and strategic progress for
Gusbourne. Since our foundation in 2004, Gusbourne has strived to
create England's finest and most celebrated wines, by leveraging
our core assets - an unrelenting focus on craft, detail and
quality, an enhanced product portfolio and carefully curated
distribution - and have taken advantage of the long-term
investments made into land and plantings over the last 20 years.
Combined with the ongoing global appetite for English wine, the
result has been another year of double digit revenue growth. The
Group reported £7.05m revenue, an increase of 13% compared to 2022,
with all three distribution channels expanding the customer base
both in the UK and overseas, reinforcing Gusbourne's brand as a
leading light in the dynamic and fast growing English fine wine
market.
Gross profit was up by 30% and the
gross margin improved significantly to 68.2% (2022: 59.2%). This
reflected an improvement in distribution channel and pricing mix
(in part a result of lower growth in International sales, a lower
margin channel) along with the impact of our new and wider product
mix strategy. Operating costs, especially administration expenses,
remain carefully managed. We continue to invest in the Gusbourne
brand, with discretionary marketing investment to help support
brand awareness and future sales growth. The combination of good
cost discipline and significant top-line growth meant the Group
achieved a material improvement in our cost to sales ratio
narrowing adjusted EBITDA loss for the year to £0.7m (2022: £1.1m
EBITDA loss).
I was honoured to be appointed
Chief Executive Officer of Gusbourne in January 2024 and am
thrilled to be leading England's foremost fine wine brand. I have
thoroughly enjoyed my five and half years with Gusbourne and am
excited by the prospect of driving this great business forward into
the future, implementing our vision and growth strategy.
The continued success of the Group
is a testament to the diligent work of the entire Gusbourne team.
Their dynamism, enthusiasm and dedication are the foundation of our
business and I thank them all for their ongoing efforts and
continued loyalty. I have been touched by the support and
commitment the team has shown me since my appointment. I would also
like to take this opportunity to thank Charlie Holland for
preparing such a carefully thought out succession plan across the
business. I also wish to recognise the integral role Charlie
performed in establishing the world class reputation Gusbourne
wines now command, as well as significantly growing our business,
during his ten-year tenure with the Group.
Group vision and growth strategy
The Group's vision is to continue
to produce premium quality vintage wines from grapes grown in our
own vineyards and to promote Gusbourne as a luxury brand. This will
be achieved through our ongoing dedication to excellence in all
aspects, from vineyards to winemaking, customer service and support
to marketing, branding and the development of our team. It will be
enhanced by our prudently chosen commercial relationships and
curated distribution channels.
To deliver this, our growth
strategy is based on three strategic pillars:
· Protect premium
position. Gusbourne has a quality
focus in everything we do, starting in the vineyard and continuing
into our winemaking, distribution product range strategy and
beyond. Our focus on fine wine quality has consistently been
recognised by critics across the world, and resulted in a
significant number of awards for our products. We are fiercely
protective of our premium positioning and by nurturing and
protecting it, we maintain our pricing and distribution
power.
· Strengthen brand
awareness. Closely associated with
our premium position, is our increasing brand awareness. The
strength of our brand opens up distribution opportunities and makes
Gusbourne an attractive proposition for our international market
partners. We have invested heavily in the Gusbourne brand and will
continue to do so, through a very considered and controlled
approach. We do everything we can to provide our guests at the Nest
with a fantastic experience, so they become informal brand
advocates and spread positive word about Gusbourne among their
friends, family and professional networks. The strength of our
brand, combined with the quality of our products, gives us pricing
power, the ability to expand our product range and pricing
hierarchy. This has underpinned the increase in our average selling
price over time.
· Drive multiple revenue
streams. Gusbourne has multiple
levers to drive revenue growth in both the UK and overseas. The
expansion of our vineyards over the last decade, and maturing of
the vines, has improved productivity of the estate. With
significant investment in inventory, we are now well placed to
service the growing demand for our products and have expanded our
international distributor network and direct sales force in the UK
accordingly. However, this is not just a volume growth story. We
have consistently demonstrated the ability to improve our pricing
and product mix enhancements through, with the introduction of
limited edition products, regular price increases and non-wine
sales and other new products to our range. We have a track record
of driving Direct to Consumer business, our highest gross margin
channel, through our digital marketing and eCommerce capabilities.
Non-wine sales are also important, provided by the regular
programme of tasting and tour experiences and events offered at the
Nest. During 2023, we expanded our capacity, and have driven
occupancy through the burgeoning corporate sales channel. We
see further opportunities to expand the Nest in Kent and to create
a second world-class customer experience at our Sussex vineyard in
the future.
Land
The Gusbourne business was founded
in 2004 by Andrew Weeber with the first vineyard plantings at
Appledore in Kent. The first wines were released in 2010 to
critical acclaim. In 2013 and 2015, additional vineyards were
planted in both Kent and West Sussex. At the end of 2022, the group
had 93 hectares of mature planted vineyards. The Group
acquired a further 55 hectares in Kent during 2022, the majority of
which we plan to plant in the next few years. We also plan to plant
additional vineyards on existing land in Sussex and this would give
a total of approximately 152 hectares of land under
vine.
Products
Right from its beginning,
Gusbourne's intention has always been to produce the finest English
sparkling wines. Starting with carefully chosen sites, we use best
practice in establishing and maintaining the vineyards and conduct
green harvests to ensure we achieve the highest quality grapes for
each vintage. A quest for excellence is at the heart of everything
we do. For our sparkling wine, we blind taste hundreds of
components before finalising our blends and even after the wines
are bottled, they spend extended time on their lees to add depth
and flavour. Once disgorged, extra cork ageing further enhances
complexity. Our winemaking process remains traditional, but one
that is open to innovation where appropriate. It takes four years
to bring a vineyard into full production and a further three years
to transform those grapes into Gusbourne's premium sparkling
wine.
2022 saw the launch of the
inaugural vintage of our prestige sparkling wine, Fifty One
Degree's North, a wine that represents the pinnacle of the
Gusbourne range and is positioned alongside the world's finest
sparkling wines. The response from the wine critics has been
extremely positive and in 2023 we released the second vintage, the
2016 during the year to further rave review.
Gusbourne also produce a growing
range of premium vintage English still wines which continue to win
prestigious international awards and are so sought after, that they
are only available to customers on strict allocations. We
anticipate further expanding the range and supply of our still
wines, which along with other comparable still fine wines produced
around the world, are commercially released with less ageing in our
cellars.
Recent awards
Gusbourne has received a record
number of awards, gold medals and trophies for its wines, winning
more gold medals and trophies than ever before. . Pleasingly, the
breadth of awards extends across our range of still and sparkling
wines, and across multiple vintages too, highlighting the continued
and consistent excellence of our winemaking over many years.
Highlights include:
•
Four trophies, including retaining Estate Winery of the Year at the
Wine GB awards
•
Collecting the Vintage English Sparkling Wine Trophy at this year's
International Wine Challenge, along with eleven other
medals
•
Thirteen medals, including two golds, at the Decanter World Wine
Award
•
Five gold medals at the Champagne and Sparkling Wine World
Championships
•
Blanc de Noirs and Blanc de Blancs of the Year in the England 2022
Special Report
•
Two Editor's Choice listings in Wine Enthusiast and four wines
scoring over 94 points
• A
Judges' Selection and Platinum award at the Texsom Awards in the
USA
We were also thrilled that the
Nest was recognised as UK Cellar Door of the year at the Decanter
Retailer Awards during 2023.
Distribution: Three sales channels
Gusbourne has three main sales
channels, UK Trade, International and Direct to Consumer, which all
have
delivered significant growth
during the year.
•
UK Trade
UK Trade continued its strong
progress with net revenue up by 13% (2022: 53%). The Group has
established new trade accounts across premium hotels and
restaurants, further strengthening its already high penetration to
Michelin star restaurants and 5-star hotels.
•
International
Our wines were distributed to 33
countries around the world in 2023 as we grew the Gusbourne brand
globally, working with specialist distribution partners.
International sales have continued to thrive and grew by 7%
(2022: 78%). The brand has seen particularly strong momentum
in the Nordics, Japan and the USA. Continued investment
in sales and marketing has enabled us to develop and grow existing
markets and expand into exciting new territories with significant
growth potential. The Group expects to add further countries in
2024 and beyond.
•
Direct to Consumer
Both wine sales and tour and
tasting events based on our cellar door operations in Kent have
continued
to
deliver strong growth, with net revenue up 18% for 2023 compared to
2022.
DTC wine sales grew by 26%
reflecting our ongoing investment in digital marketing through the
creation of rich and
engaging content, compelling wine offers and new and exciting
product releases. DTC remains a key strategic
direction for Gusbourne as we
continue to develop our digital and physical presence. Tour and
tasting events at Gusbourne's successful cellar door facility in
Kent (the Nest), are now in their seventh full year of operation.
Situated amongst our vineyards and winery operations in Kent, this
facility offers an immersive experience allowing us to fully engage
with our customers, encouraging them to enjoy the vineyards, visit
the winery and taste our wines in a beautiful setting. We continue
to improve and expand these services, having carried out
reconfiguration of space at the Nest, providing capacity for more
visitors to have a unique and unforgettable experience. During 2023
we also launched two new membership programmes which we expect to
thrive in 2024 and beyond.
2023 Harvest
In 2023 we harvested our biggest
yield to date. Following the warm growing season of 2022, the vines
emerged from winter in great health. Good weather during the
flowering period led to an abundance of fruit and the team's
careful management of the vines throughout the summer, which
included a rigorous quality-controlling green harvest, meant that
the fruit quality and quantity was very good. Harvest was completed
under sunny skies and earlier than in typical years, before the wet
weather of autumn arrived. Chardonnay, Pinot Noir and Pinot Meunier
grapes show fine expressiveness and are expected to produce some
outstanding wines, which will be bottled during the summer of 2024,
further adding to our inventory levels for sale in future
years.
The English wine market
The English wine market remains
highly dynamic and has continued to see significant growth, in
terms of supply, demand by UK consumers and demand in international
markets. This is an exciting time for English wines, with brands
like Gusbourne at the forefront of the creation of a fine wine
market and establishing wines from the UK on the global
stage.
Data from WineGB, the industry
body for the English wine trade, reports plantings have increased
by 70% over the last five years, with Chardonnay, Pinot Noir and
Pinot Meunier the most significant varietals. Sparkling wines
account for approximately 70% of total production and still wines
30%.
Sales of UK wine in the UK market
are over nine million bottles, with a growing presence of UK wines
in the exports markets. Key exports markets for the industry are
Norway, USA, Sweden, Japan and Hong Kong. Gusbourne has a strong
presence in all of these markets, with significant further growth
potential ahead.
Current trading and outlook
The macro-economic environment
remains complex with consumer confidence still affected by
inflationary pressures and causing hesitancy in many markets. At
the same time, consumer interest in Gusbourne wine and English wine
generally continues to grow across the globe. Against this
backdrop, we remain confident about Gusbourne's future prospects
and expect to deliver another year of good growth across all our
distribution channels. Gusbourne has the benefit of increased
supply and inventories from the expansion of the land planted in
recent years, maturity of the vines and the ongoing expansion of
its international presence, with two new markets already opened in
2024. The increased revenue base combined with anticipated
improvement in gross margin and cost discipline is expected to see
the Group deliver EBITDA breakeven for the current financial year.
Longer-term, increases in production from new vineyards are
expected to drive further revenue growth and margin improvement
through scale.
Jonathan White
Chief Executive
Chief Financial Officer's review
Net revenue and adjusted EBITDA - 5 year
summary
|
Years ended 31 December
|
2019
£'000
|
2020
£'000
|
2021
£'000
|
2022
£'000
|
2023
£'000
|
|
Net
revenue*
|
1,653
|
2,109
|
4,191
|
6,243
|
7,052
|
|
Cost of
sales
|
(735)
|
(879)
|
(1,847)
|
(2,546)
|
(2,244)
|
|
Gross
profit
|
918
|
1,230
|
2,344
|
3,697
|
4,808
|
|
Sales and
marketing expenses
|
(1,389)
|
(1,478)
|
(2,460)
|
(3,479)
|
(3,565)
|
|
Administration expenses
**
|
(814)
|
(1,073)
|
(1,336)
|
(1,349)
|
(1,912)
|
|
Adjusted
EBITDA (loss)/profit***
|
(1,285)
|
(1,321)
|
(1,452)
|
(1,131)
|
(669)
|
|
Aborted
planning and capital expenditure write-off
|
-
|
-
|
-
|
(132)
|
-
|
|
Fair
value movement in biological produce
|
(172)
|
(221)
|
(704)
|
(239)
|
(46)
|
|
EBITDA****
|
(1,457)
|
(1,542)
|
(2,156)
|
(1,502)
|
(715)
|
|
|
|
Net
revenue annual growth %
|
31.1%
|
27.6%
|
98.7%
|
49.0%
|
13.0%
|
|
Net revenue 5 year CAGR
|
30.7%
|
34.8%
|
45.6%
|
44.3%
|
41.1%
|
|
Gross
profit %
|
55.5%
|
58.3%
|
55.9%
|
59.2%
|
68.2%
|
|
Sales and
marketing %
|
84%
|
70%
|
59%
|
56%
|
51%
|
|
Administration expenses
%
|
49%
|
51%
|
32%
|
22%
|
27%
|
|
Adjusted
EBITDA (loss)/profit %
|
-78%
|
-63%
|
-35%
|
-18%
|
-9%
|
* Net revenue represents Revenue
after deducting excise duties
** Excluding depreciation
***
Adjusted EBITDA means profit/(loss)from operations before aborted
planning and capital expenditure write-off, fair value movement in
biological produce, interest, tax, depreciation and
amortisation.
**** EBITDA means profit from
operations/(loss from operations) before interest, tax,
depreciation and amortisation.
Net revenue by distribution channel - 5 year
summary
|
Years ended 31 December
|
2019
|
2020
|
2021
|
2022
|
2023
|
2023
|
2022
|
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
% Growth
|
% Growth
|
|
|
Net
revenue
|
|
Direct to
Consumer (DTC)*
|
299
|
586
|
1,016
|
1,185
|
1,489
|
25.7
|
16.5
|
|
UK
Trade
|
934
|
721
|
1,997
|
3,058
|
3,454
|
12.9
|
53.2
|
|
UK Wine
Sales
|
1,233
|
1,307
|
3,013
|
4,243
|
4,943
|
16.5
|
40.8
|
|
International
|
292
|
634
|
781
|
1,391
|
1,494
|
7.4
|
78.0
|
|
Net wine sales
|
1,525
|
1,941
|
3,795
|
5,634
|
6,437
|
48.5
|
48.5
|
|
Tour and
related income (DTC)*
|
71
|
90
|
309
|
525
|
525
|
0.0
|
69.9
|
|
Other
Income
|
57
|
78
|
87
|
84
|
90
|
7.5
|
-3.4
|
|
Total net revenue
|
1,653
|
2,109
|
4,191
|
6,243
|
7,052
|
13.0
|
49.0
|
|
|
|
Percentages of total net revenue
|
|
Direct to
Consumer (DTC)
|
22.4%
|
32.1%
|
31.6%
|
27.4%
|
28.6%
|
|
|
|
UK
Trade
|
56.5%
|
34.2%
|
47.6%
|
49.0%
|
49.0%
|
|
|
|
International
|
17.7%
|
30.1%
|
18.6%
|
22.3%
|
21.2%
|
|
|
|
Other
Income
|
3.4%
|
3.7%
|
2.1%
|
1.3%
|
1.3%
|
|
|
|
Total
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
* DTC total net revenue £2,014,000
(2022: £1,710,000), 18% growth versus prior year (2022:
29%)
Net revenue
Net revenue for the year was up by
13% (2022: 49%) to £7.05m (2022: £6.24m, 2021: £4.19m, 2020: £2.11m
and 2019: £1.65m), reflecting continued robust sales growth across
our three main distribution channels:
• UK
Trade sales grew by 13% to £3.45m. UK Trade sales represent 49%
(2022: 49%) of net revenue. The Company continues to establish new
trade accounts across premium hotels and restaurants and open new
business through the fast growing corporate and partnerships
channel;
•
Direct to consumer net revenue which includes tours and related
cellar door operations in Kent grew by 18% to £2.01m DTC represents
29% (2022: 27%) of net revenue for the year. DTC wine sales grew by
a 26%, the strong growth was driven by investment in digital
marketing and direct wine sales arising from our tour and
experience; and
•
International sales grew by 7% (2022: 78%) to £1.49m (2022: £1.39m)
and represented 21% of total net revenue (2022: 22%).
Gross profit
The gross profit increased by 30%
to £4.1m (2022: £3.7m), with gross profit margin on net revenue up
to 68.2% (2022: 59.2%), largely due to distribution channel and
pricing mix factors. Gross profit margin is one of the main KPI's
of the Group which it aims to maintain and enhance, and which
derives from a number of key variables:
· The
historic cost of wine inventories, based on production costs up to
four years prior to sale;
· The
sales distribution mix, with DTC generally at higher margins at
gross profit level than the other two main channels;
· The
product distribution mix with more premium product offerings now
being introduced and further enhancing overall gross
margins;
· Selected inflationary price adjustments to recover the
Group's own increasing costs, where and when appropriate;
and
· Direct distribution costs.
These variables are monitored and
optimized as part of the Group's forward planning to maintain and
enhance its gross profit margins.
Adjusted EBITDA loss
The Group narrowed its adjusted
EBITDA operating loss for the year to £0.7m (2022: £1.1m).
This was after charging sales and marketing expenses of £3.6m
(2022: £3.5m) and administrative expenses of £1.9m (2022:
£1.3m).
Administrative expenses have
increased by over £0.5m due to inflationary increases and planned
discretionary spend. Sales and marketing expenses have remained
consistent with the previous year and continue to include key
planned elements of discretionary investment spend to support the
ongoing brand development and the potential longer-term sales
growth of the Group.
Sales and marketing costs as a
percentage of net revenue has continued to decline in recent years
and represented 51% of net revenue for the year, down from 56% in
2022. It is expected that these costs will continue to decline as a
percentage of net revenue over the coming years.
Finance expenses
Finance expenses for the year
amounted to £1.6m (2022: £0.5m) and reflect the interest expense on
the Group's long-term secured debt from PNC of £1.1m (2022: £0.5m),
together with the full amortisation of bank transaction costs,
£0.5m (2022 £0.0m), following the notice given to PNC to end the
agreement.
Tax
The Group reported a tax credit of
£38,000 (2022: £73,000) relating to research and development tax
credits. At 31 December 2023, the Group had tax loses available to
carry forward of £23.2m (2022: £20.7m).
Earnings per share
The Group reported a basic loss
per share of 4.89 pence (2022: 4.17 pence).
Key Performance Indicators
Balance Sheet assets* - 5 year summary
|
Years
ended 31 December
|
2019
|
2020
|
2021
|
2022
|
2023
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
Assets
|
|
Freehold land and
buildings
|
6,383
|
6,263
|
6,134
|
7,830
|
7,937
|
|
Right of use assets
|
2,068
|
2,022
|
1,976
|
1,930
|
2,587
|
|
Vineyards
|
3,144
|
3,004
|
2,858
|
2,712
|
2,569
|
|
Plant, machinery and other
equipment
|
1,636
|
1,504
|
1,375
|
1,726
|
1,772
|
|
Other receivables
|
90
|
38
|
32
|
16
|
-
|
|
Total non current assets
|
13,321
|
12,831
|
12,375
|
14,214
|
14,865
|
|
|
|
Inventories
|
7,463
|
9,325
|
10,638
|
12,579
|
15,546
|
|
Trade and other
receivables
|
707
|
869
|
1,275
|
1,291
|
1,836
|
|
Trade and other
payables
|
(752)
|
(769)
|
(1,118)
|
(1,500)
|
(1,880)
|
|
Working capital
|
7,418
|
9,425
|
10,795
|
12,370
|
15,502
|
|
|
|
Total operating assets
|
20,739
|
22,256
|
23,170
|
26,584
|
30,367
|
|
Cash
|
1,009
|
262
|
3,128
|
269
|
71
|
|
Goodwill
|
1,007
|
1,007
|
1,007
|
1,007
|
1,007
|
|
|
|
Total assets
|
22,755
|
23,525
|
27,305
|
27,860
|
31,445
|
Balance Sheet liabilities and equity*
|
Years
ended 31 December
|
2019
|
2020
|
2021
|
2022
|
2023
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
Debt
|
|
PNC Business Credit (Asset finance
facilities)
|
-
|
6,613
|
9,326
|
12,373
|
16,627
|
|
Other bank debt
|
2,058
|
-
|
-
|
-
|
-
|
|
Deep discount bonds
|
3,001
|
5,132
|
-
|
-
|
-
|
|
Short term debt
|
3,379
|
544
|
-
|
-
|
1,500
|
|
Lease liabilities
|
2,123
|
2,108
|
2,094
|
2,078
|
2,763
|
|
Total debt
|
10,561
|
14,397
|
11,420
|
14,451
|
20,890
|
|
|
|
Equity
|
12,194
|
9,128
|
15,885
|
13,409
|
10,055
|
|
|
|
Total liabilities
|
22,755
|
23,525
|
27,305
|
27,860
|
31,445
|
* Excluding trade and other
payables
Balance Sheet
The Group's balance sheet reflects
the long-term nature of the sparkling wine industry and the
important investments that have already been made to support the
long-term growth ambitions of the Group. The production of premium
quality wine from new vineyards is, by its very nature, a long-term
project of at least ten years. It takes around two years to select
and prepare optimal vineyard sites and order the appropriate vines
for planting. It takes a further four years from planting to bring
a vineyard into full production and a further four years to
transform these grapes into Gusbourne's premium sparkling wine.
This requires capital expenditure on vineyards and related
property, plant and equipment as well as significant working
capital to support inventories over the long production
cycle.
The total assets employed in the
business at 31 December 2023 was £31.4m (2022: £27.9m) represented
by the following principle operating assets:
Fixed assets
· 196
hectares of Freehold land and buildings of £7.9m (2022: £7.8m) -
with buildings at cost less depreciation
· 93
hectares of mature vineyards of £2.6m (2022: £2.7m) - at cost less
depreciation
· Plant, machinery and other equipment of £1.8m (2022: £1.7m) -
at cost less depreciation
· Right of use assets (under IFRS 16) of £2.6m (2022:
£1.9m)
Inventories
Inventories at 31 December 2023 at
the lower of cost and net realisable value amounted to £15.5m
(2022: £12.6m). These inventories represent wine in its various
stages of production from wine in tank from the last harvest to the
finished products which take around four years to produce from the
time of harvest. These additional four years reflect the time it
takes to transform our high-quality grapes into Gusbourne's premium
sparkling wine. An important point to note is that these wine
inventories already include the wine (at its various stages of
production) to support sales planned for at least the next four
years. The anticipated underlying surplus of net realisable value
over the cost of these wine inventories, which is not reflected in
these accounts, will become an increasingly significant factor of
the Group's asset base as these inventories continue to
grow.
Cash flow
The Group's operating cash outflow
flow for the year was £3.5m (2022: £2.9m) This represented an
Adjusted EBITDA loss of £0.7m (2022: £1.1m loss) and net working
capital outflows (mostly an increase in wine inventories) of £2.9m
(2022: £1.8m).
Capital expenditure was £1.5m for
2023 (2022: £2.5m) and included the additional lease in the right
to use asset (£0.8m) purchase of plant and machinery (£0.4m) and
building improvements (£0.3m). The capital expenditure was
financed by the Group's own cash resources and the working capital
was financed by additional drawings from the PNC
facility.
Financing and net debt
At 31 December 2023 the Group's
total assets of £31.4m (2022: £27.9m) were financed by:
· Shareholder's equity of £10.6m (2022: £13.4m)
· Secured debt from PNC of £16.6m (2022: £12.4m). The PNC
facilities are provided on a revolving basis over a minimum period
of 5 years to 12 August 2027 and allow flexible drawdown and
repayments in line with the Group's working capital requirements.
On 15 August 2022 these asset -based lending facilities were
extended by an additional £6.0m from the existing £10.5m to
£16.5m. The interest rate is at the annual rate of 2.50% per
cent over Bank of England Base Rate). The Group gave notice to
terminate the agreement in 2023 and therefore the £16.6m creditor
is £16.3m debt and £0.3m accelerated loan cost
amortisation.
· Short term unsecured debt of £1.5m (2022: £0.0m).
· Lease liabilities under IFRS 16 of £2.7m (2022:
£2.1m).
At 31 December 2023, the Group's
net debt (PNC facility less Cash, excluding IFRS16 lease
liabilities) amounted to £18.1m (2022:£12.1m). In January 2024 the
Group subsequently issued a Deep Discount Bond for £20.0m, repaid
the PNC facility and the short-term loan of £1.5m.
Katharine Berry
Chief Financial Officer
Consolidated statement of comprehensive income for the year
ended 31 December 2023
|
|
Year ended
31 December
|
Year ended 31 December
|
|
2023
|
2022
|
|
|
Note
|
£'000
|
£'000
|
|
Revenue
|
|
7,665
|
6,858
|
|
Excise
duties
|
|
(613)
|
(615)
|
|
Net revenue
|
|
7,052
|
6,243
|
|
|
|
|
|
|
Cost of
sales
|
|
(2,244)
|
(2,546)
|
|
|
|
|
|
|
Gross profit
|
|
4,808
|
3,697
|
|
|
|
|
|
|
Fair
value movement in biological produce
|
|
(46)
|
(239)
|
|
|
|
|
|
|
Administrative expenses
|
|
(6,138)
|
(5,561)
|
|
|
|
|
|
|
Loss from operations
|
|
(1,376)
|
(2,103)
|
|
Finance
expenses
|
|
(1,627)
|
(496)
|
|
|
|
|
|
|
Loss before tax
|
|
(3,003)
|
(2,599)
|
|
Tax
credit
|
|
38
|
74
|
|
|
|
|
|
|
Loss
and
total comprehensive
loss for
the year
attributable to
owners of the
parent
|
|
(2,965)
|
(2,525)
|
|
|
|
|
|
|
Loss per share attributable
to the ordinary equity holders of the parent:
|
|
|
|
|
Basic (pence)
|
4
|
(4.89)
|
(4.17)
|
|
Diluted
(pence)
|
4
|
(4.88)
|
(4.15)
|
Consolidated statement of financial position at 31 December 2023
|
|
Note
|
31 December
2023
£'000
|
31 December
2022
£'000
|
|
Assets
|
|
|
|
|
Non-current assets
|
|
|
|
|
Intangibles
|
|
1,007
|
1,007
|
|
Property, plant and equipment
|
5
|
14,865
|
14,198
|
|
Other
receivables
|
|
-
|
16
|
|
|
|
15,872
|
15,221
|
|
Current assets
|
|
|
|
|
Biological Produce
|
6
|
-
|
-
|
|
Inventories
|
7
|
15,546
|
12,579
|
|
Trade and
other receivables
|
|
1,836
|
1,291
|
|
Cash and
cash equivalents
|
|
71
|
269
|
|
|
|
17,453
|
14,139
|
|
Total
assets
|
|
33,325
|
29,360
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Trade and
other payables
|
|
(1,880)
|
(1,500)
|
|
Lease
liabilities
|
9
|
(251)
|
(84)
|
|
Loans and
borrowings
|
8
|
(18,127)
|
-
|
|
|
|
(20,258)
|
(1,584)
|
|
Non-current liabilities
|
|
|
|
|
Loans and
borrowings
|
8
|
-
|
(12,373)
|
|
Lease
liabilities
|
9
|
(2,512)
|
(1,994)
|
|
|
|
(2,512)
|
(14,367)
|
|
Total
liabilities
|
|
(22,770)
|
(15,951)
|
|
|
|
|
|
|
Net assets
|
|
10,555
|
13,409
|
|
|
31 December
|
31 December
|
|
2023
|
2022
|
|
|
Note
|
£'000
|
£'000
|
|
|
Issued capital and reserves
attributable to owners of the parent
|
|
|
|
|
|
Share
capital
|
10
|
12,192
|
12,191
|
|
|
Share
premium
|
|
21,190
|
21,144
|
|
|
Merger
reserve
|
|
(13)
|
(13)
|
|
|
Share
option reserve
|
|
71
|
7
|
|
|
Retained
earnings
|
|
(22,885)
|
(19,920)
|
|
|
Total
equity
|
|
10,555
|
13,409
|
|
|
|
|
|
|
|
| |
Consolidated statement of cash flows for
the year ended 31 December 2023
|
|
31 December
|
31 December
|
|
2023
|
2022
|
|
|
|
£'000
|
£'000
|
|
|
Cash
flows from
operating activities
|
|
|
|
|
|
Loss for
the year before tax
|
|
(3,003)
|
(2,599)
|
|
|
Adjustments for:
|
|
|
|
|
|
Depreciation of property, plant and equipment
|
|
661
|
601
|
|
|
Sale of
property, plant and equipment
|
|
(14)
|
(28)
|
|
|
Finance
expense
|
|
1,627
|
496
|
|
|
Fair
value movement in biological produce
|
|
46
|
239
|
|
|
Equity
share options issued
|
|
64
|
7
|
|
|
(Decrease)/Increase in trade and other receivables
|
|
(491)
|
74
|
|
|
Increase
in inventories
|
|
(2,742)
|
(2,049)
|
|
|
Increase
in trade and other payables
|
|
380
|
385
|
|
|
Cash
outflow from
operations
|
|
(3,472)
|
(2,874)
|
|
|
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
|
Purchases
of property, plant and equipment, excluding vineyard establishment
|
|
(1,485)
|
(2,502)
|
|
|
Sale
of property, plant and
equipment
|
|
16
|
28
|
|
|
Net cash used in investing
activities
|
|
(1,469)
|
(2,474)
|
|
|
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
|
Revolving
facility repayments
|
|
(4,829)
|
(4,547)
|
|
|
Revolving
facility drawdowns
|
|
8,570
|
7,620
|
|
|
Financing
Agreements entered into
|
|
792
|
-
|
|
|
Loan
issue costs
|
|
-
|
(66)
|
|
|
Repayment
of lease liabilities
|
|
(223)
|
(101)
|
|
|
Issue of
short term loan facility
|
|
1,500
|
-
|
|
|
Interest
paid
|
|
(1,114)
|
(456)
|
|
|
Issue of
ordinary shares
|
|
52
|
46
|
|
|
Share
issue expense
|
|
(5)
|
(7)
|
|
|
Net cash from financing
activities
|
|
4,743
|
2,489
|
|
|
|
|
|
|
|
|
Net
increase/(decrease) in cash and cash equivalents
|
|
(198)
|
(2,859)
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at
the beginning of the year
|
|
269
|
3,128
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at
the end of the year
|
|
71
|
269
|
|
|
|
|
|
|
|
| |
Consolidated statement of changes in equity for the year
ended 31 December 2023
|
|
|
|
|
|
|
|
|
Share
|
|
Total attributable
|
|
|
|
Share
|
Share
|
Merger
|
option
|
Retained
|
to equity
|
|
|
|
capital
|
premium
|
reserve
|
reserve
|
earnings
|
holders of
parent
|
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
1 January
2022
|
12,190
|
21,103
|
(13)
|
-
|
(17,395)
|
15,885
|
|
|
Comprehensive loss for the year
|
-
|
-
|
-
|
-
|
(2,525)
|
(2,525)
|
|
|
Share
issue
|
1
|
48
|
-
|
-
|
-
|
49
|
|
|
Share
issue expenses
|
-
|
(7)
|
-
|
-
|
-
|
(7)
|
|
|
Equity
share options issued
|
-
|
-
|
-
|
7
|
-
|
7
|
|
|
31
December 2022
|
12,191
|
21,144
|
(13)
|
7
|
(19,920)
|
13,409
|
|
|
|
|
|
|
|
|
|
|
|
1 January
2023
|
12,191
|
21,144
|
(13)
|
7
|
(19,920)
|
13,409
|
|
|
Comprehensive loss for the year
|
-
|
-
|
-
|
-
|
(2,965)
|
(2,965)
|
|
|
Share
issue
|
1
|
51
|
-
|
-
|
-
|
52
|
|
|
Share
issue expenses
|
-
|
(5)
|
-
|
-
|
-
|
(5)
|
|
|
Equity
share options issued
|
-
|
-
|
-
|
64
|
-
|
64
|
|
|
31
December 2023
|
12,192
|
21,190
|
(13)
|
71
|
(22,885)
|
10,555
|
|
1 Accounting policies
Gusbourne PLC (the "Company") is a
company incorporated and domiciled in the United Kingdom and quoted
on the London Stock Exchange's AIM market. The consolidated
financial statements of the Group for the year ended 31 December
2023 comprise the Company and its subsidiaries (together referred
to as the "Group").
Basis of preparation
The Group's consolidated financial
statements and the Company's financial statements have been
prepared in accordance with UK adopted international accounting
standards. The Company's financial statements are presented on
pages 82 to 88.
The following accounting policies
have been applied consistently in dealing with items which are
considered material in relation to the Group's financial
statements.
The financial statements are
presented in pounds sterling. They have been prepared on the
historical cost basis except that biological produce is stated at
fair value.
Going concern
The consolidated financial
statements have been prepared on a going concern basis in
accordance with UK adopted international accounting
standards.
In coming to their conclusion the
Directors have considered the Group's loss and cash flow based on
the Group's approved 3 year plans for the period of at least 12
months from the date these financial statements were
approved.
The Group's major shareholder
proposed in 2023, to replace the existing PNC borrowing facility
with a new and enlarged facility on very similar terms and
conditions to the PNC borrowing facility. The Group gave notice to
close down the PNC facility in December 2023. In January 2024
the Group issued a Deep Discount Bond for £20.0m, repaid the PNC
facility and the short-term loan of £1.5m.
The Directors have considered a
scenario in which the only cash available is from the new agreed
facility and planned but not yet committed capital expenditure is
deferred. As at 31 December 2023 £18.0m was available to the Group,
of which £0.3m was unutilised; represented by cash in hand and at
bank of £0.1m and undrawn funds from the Group's asset-based
lending facility of £0.2m. In January 2024 the PNC debt and
short-term loan were replaced with a Deep Discount Bond for
£20.0m. Under this scenario the available lending facilities
and cash held at bank, cover working capital requirements without
the need for an increased lending facility.
In coming to their going concern
conclusion, and in the light of the uncertainty due to current
economic conditions, the Directors have also run various downside
"stress test" scenarios. These scenarios assess the impact of
potential worsening economic conditions on the Group over the next
12 months and in particular a reduction of 10% of gross sales from
that included within the Group 3-year plan. These stress tests
indicate the Group can withstand this ongoing adverse impact on
revenues and cashflow for at least the next 12 months. Under this
scenario the directors have modelled the impact of certain
additional cost mitigation actions, in relation to variable and
discretionary costs. The directors believe that sufficient cost
savings could be achieved from reducing sales and marketing and
administrative costs; no expansion of winery and vineyard costs and
reducing capital expenditure to enable the Group to continue as a
going concern for the next 12 months. Under this scenario, the
Group could continue to operate within the available lending
facilities and cash held at bank without the need for an increased
lending facility.
IFRS 16 Leases
The Group has entered into a number
of long term leases in respect of land and buildings in West Sussex
on which the Group has planted vineyards. The leases have a
remaining life of 41 and 46 years. In 2023 the Group entered
into a long term lease agreement on a storage building, the lease
has a remaining life of 5 years.
Lease liabilities are measured at
the present value of the contractual payments due to the lessor
over the lease term, with the discount rate determined by reference
to the rate inherent in the lease unless this is not readily
determinable, in which case The Group's incremental borrowing rate
on commencement of the lease is used. Variable lease payments are
only included in the measurement of the lease liability if they
depend on an index or rate. In such cases, the initial measurement
of the lease liability assumes the variable element will remain
unchanged throughout the lease term. Other variable lease payments
are expensed in the period to which they relate.
Right-of-use assets are initially
measured at the amount of the lease liability.
Subsequent to initial measurement
lease liabilities increase as a result of interest charged at a
constant rate on the balance outstanding and are reduced for lease
payments made. Right-of-use assets are amortised on a straight-line
basis over the remaining term of the leases. When the Group revises
its estimate of the term of any lease (because, for example, it
reassesses the probability of a lessee extension or termination
option being exercised), it adjusts the carrying amount of the
lease liability to reflect the payments to make over the revised
term, which are discounted at the same discount rate that applied
on lease commencement. The carrying value
of lease liabilities is similarly
revised when the variable element of future lease payments
dependent on a rate or index is revised. In both cases an
equivalent adjustment is made to the carrying value of the
right-of-use asset, with the revised carrying amount being
amortised over the remaining (revised) lease term.
Basis of consolidation
The Group's financial statements
consolidate the financial statements of the Company and its
subsidiary undertakings. Subsidiaries are entities controlled by
the Company. Control exists when the Company has the power,
directly or indirectly, to govern the financial and operating
policies of an entity so as to obtain benefits from its activities
and the ability to use its power over the investee to affect the
amounts of the Group's returns and which generally accompanies
interest of more than one half of the voting rights. In assessing
control, potential voting rights that presently are exercisable or
convertible are taken into account. The results of any subsidiaries
sold or acquired are included in the Group income statement up to,
or from, the date control passes. Intra-Group sales and profits are
eliminated fully on consolidation.
On acquisition of a subsidiary, all
of the subsidiary's separable, identifiable assets and liabilities
existing at the date of acquisition are recorded at their fair
values reflecting their condition at that date. On disposal of a
subsidiary, the consideration received is compared with the
carrying cost at the date of disposal and the gain or loss is
recognised in the income statement. The excess of the cost of
acquisition over the fair value of the Group's share of the
identifiable net assets is recorded as goodwill. Intercompany
transactions, balances and unrealised gains on transactions between
group companies are eliminated. Subsidiaries' results are amended
where necessary to ensure consistency with the policies adopted by
the Group.
Revenue
The majority of the group's revenue
is derived from selling goods with revenue recognised at a point in
time when control of the goods has transferred to the customer.
This is generally when the goods are delivered to the customer.
However, for export sales, control might also be transferred when
the goods are dispatched by the Group or delivered either to the
port of departure or port of arrival, depending on specific terms
of the contract with a customer. There is limited judgement needed
in identifying the point control passes: once physical delivery of
the products to the agreed location has occurred, the group no
longer has physical possession, usually will have a present right
to payment and retains none of the significant risks and rewards of
the goods in question.
All of the Group's revenue is
derived from fixed price contracts and therefore the amount of
revenue to be earned from each contract is determined by reference
to those fixed prices.
For all contracts there is a fixed
unit price for each product sold. Therefore, there is no judgement
involved allocating the contract price to each unit ordered in such
contracts (it is the number of units multiplied by the fixed unit
price for each product sold). Where a customer orders more than one
product line, the Group is able to determine the split of the total
contract price between each product line by reference to each
product's standalone selling prices (all product lines are capable
of being, and are, sold separately).
Revenue from vineyard tours and
tastings is recognised on the date on which the tour or tasting
takes place.
Net revenue is revenue less excise
duties. The Group incurs excise duties in the United Kingdom and is
a production tax which becomes payable once the Group's products
are removed from bonded premises and are not directly related to
the value of revenue. It is not included as a separate item on
invoices issued to customers. Where a customer fails to pay for the
Group's products the Group cannot reclaim the excise duty. The
Group therefore recognises excise duty as a cost of the
Group.
Financial assets
Debt instruments at amortised cost
These assets are non-derivative
financial assets with fixed or determinable payments that are not
quoted in an active market. They arise principally through the
provision of goods to customers (e.g. trade receivables), but also
incorporate other types of contractual monetary asset. They are
initially recognised at fair value plus transaction costs that are
directly attributable to their acquisition or issue, and are
subsequently carried at amortised cost using the effective interest
rate method, less provision for impairment. The financial assets
meet the SPPI test and are held in a 'hold to collect' business
model and therefore classified at amortised cost.
Impairment provisions for current
and non-current trade receivables are recognised based on the
simplified approach within IFRS 9 using a provision matrix in the
determination of the lifetime expected credit losses. During this
process the probability of the non-payment of the trade receivables
is assessed. This probability is then multiplied by the amount of
the expected loss arising from default to determine the lifetime
expected credit loss for trade receivables. The historical loss
rates are adjusted for current and forward looking information
relevant to the Group's customers.
For trade receivables, which are
reported net, such expected credit losses are recognised within
administrative expenses in the consolidated statement of
comprehensive income. On confirmation that the trade receivable
will not be collectable, the gross carrying value of the asset is
written off against the associated provision.
Cash and cash equivalents
Cash and cash equivalents includes
cash in hand, deposits held at call with banks, other short term
highly liquid investments with original maturities of three months
or less.
Financial liabilities
Borrowings
Borrowings are initially recognised
at fair value net of any transaction costs directly attributable to
the loan. They are subsequently measured at amortised cost with
interest charged to the statement of comprehensive income based on
the effective interest rate of the borrowings.
Warrants
Warrants issued to shareholders as
part of an equity fund raise are accounted for as equity
instruments. See note 11 for details.
Trade and other payables
Comprises trade payables and other
short-term monetary liabilities, which are initially recognised at
fair value and subsequently carried at amortised cost using the
effective interest method.
Share capital
Financial instruments issued by the
Group are classified as equity only to the extent that they do not
meet the definition of a financial liability. The Group's ordinary
shares are classified as equity instruments.
Deferred taxation
Deferred tax assets and liabilities
are recognised where the carrying amount of an asset or liability
in the consolidated statement of financial position differs from
its tax base, except for differences arising on:
the initial recognition of
goodwill;
the initial recognition of an asset
or liability in a transaction which is not a business combination
and at the time of the transaction affects neither accounting or
taxable profit; and
investments in subsidiaries and
jointly controlled entities where the Group is able to control the
timing of the reversal of the difference and it is probable that
the difference will not reverse in the foreseeable
future.
Recognition of deferred tax assets
is restricted to those instances where it is probable that taxable
profit will be available against which the difference can be
utilised.
The amount of the asset or
liability is determined using tax rates that have been enacted or
substantively enacted by the reporting date and are expected to
apply when the deferred tax liabilities/(assets) are settled/
(recovered).
Deferred tax assets and liabilities
are offset when the Group has a legally enforceable right to offset
current tax assets and liabilities and the deferred tax assets and
liabilities relate to taxes levied by the same tax authority on
either:
the same taxable group company;
or
different group entities which
intend either to settle current tax assets and liabilities on a net
basis, or to realise the assets and settle the liabilities
simultaneously, in each future period in which significant amounts
of deferred tax assets or liabilities are expected to be settled or
recovered.
Intangible Assets
Goodwill
Goodwill arises where a business is
acquired and a higher amount is paid for that business than the
fair value of the assets and liabilities acquired. Transaction
costs attributable to acquisitions are expensed to the income
statement.
Goodwill is recognised as an asset
in the statement of financial position and is not amortised but is
subject to an annual impairment review. Impairment occurs when the
carrying value of goodwill is greater than the recoverable amount
which is the higher of the value in use and fair value less
disposal costs. The present value of the estimated future cash
flows from the separately identifiable assets, termed a 'cash
generating unit' is used to determine the fair value less cost of
disposal to calculate the recoverable amount. The Group prepares
and approves formal long term business plans for its operations
which are used in these calculations.
Brand
Brand names acquired as part of
acquisitions of businesses are capitalised separately from goodwill
as intangible assets if their value can be measured reliably on
initial recognition and it is probable that the expected future
economic benefits that are attributable to the asset will flow to
the Group.
Brand names have been assessed as
having an indefinite life and are not amortised but are subject to
an annual impairment review. Impairment occurs when the carrying
value of the brand name is greater than the present value of the
estimated future cash flows.
Property, plant and equipment
Items of property, plant and
equipment are initially recognised at cost. As well as the purchase
price, cost includes directly attributable costs.
Freehold land is not
depreciated.
Vineyard establishment represents
the expenditure incurred to plant and maintain new vineyards until
the vines reach productivity. Once the vineyards are productive the
accumulated cost is transferred to mature vineyards and depreciated
over the expected useful economic life of the vineyard. Vineyard
establishment is not depreciated.
Depreciation is provided on all
other items of property, plant and equipment so as to write off
their carrying value over their expected useful economic lives. It
is provided at the following rates:
|
Freehold buildings
Plant, machinery and motor
vehicles
Computer equipment
Mature vineyards
|
4% per annum straight
line
5-33% per annum straight
line
33% per annum straight
line
4% per annum straight
line
|
The carrying value of property,
plant and equipment is reviewed for impairment when events or
changes in circumstances indicate that the carrying value may not
be recoverable.
Biological assets and produce
Agricultural produce is accounted
for under IAS 41 Agriculture. Harvesting of the grape crop is
ordinarily carried out in October. The grapes are therefore
measured at fair value less costs to sell in accordance with IAS 41
with any fair value gain or loss shown in the consolidated
statement of comprehensive income. The fair value of grapes is
determined by reference to estimated market prices at the time of
harvest. Generally there is no readily obtainable market price for
the Group's grapes because they are not sold on the open market,
therefore management set the values based on their experience and
knowledge of the sector including past purchase transactions. This
measurement of fair value less costs to sell is the deemed cost of
the grapes that is transferred into inventory upon
harvest.
Under IAS 41, the agricultural
produce is also valued at the end of each reporting period, with
any fair value gain or loss shown in the consolidated statement of
comprehensive income. Bearer plants are accounted for under IAS 16
and are held at cost.
Inventories
Inventories are initially
recognised at cost, and subsequently at the lower of cost and net
realisable value. Cost comprises all costs of purchase, costs of
conversion and other costs, including depreciation on right of use
assets and interest on lease liabilities, incurred in bringing the
inventories to their present location and condition. Grapes grown
in the Group's vineyards are included in inventory at fair value
less costs to sell at the point of harvest which is the deemed cost
for the grapes.
Weighted average cost is used to
determine the cost of ordinarily interchangeable items.
Leased assets
All leases are accounted for by
recognising a right-of-use asset and a lease liability except for
leases of low value assets and leases with an expected full term of
12 months or less.
Lease liabilities are measured at
the present value of the unpaid contractual payments over the
expected lease term, with the discount rate determined by reference
to the rate inherent in the lease unless (as is typically the case)
this is not readily determinable, in which case the Group's
incremental borrowing rate on commencement of the lease is used. On
initial recognition, the carrying value of the lease liability also
includes amounts expected to be payable under any residual value
guarantee; the exercise price of any purchase option granted in
favour of the Group if it is reasonably certain to exercise that
option; and any penalties payable for terminating the lease, if the
term of the lease has been estimated on the basis of termination
option being exercised.
Right-of-use assets are initially
measured at the amount of the lease liability, reduced for any
lease incentives received, and increased for lease payments made at
or before commencement of the lease and initial direct costs
incurred.
Right-of-use assets are initially
measured at the amount of the lease liability, reduced for any
lease incentives received, and increased for lease payments made at
or before commencement of the lease and initial direct costs
incurred.
Subsequent to initial measurement,
lease liabilities increase as a result of interest charged at a
constant rate on the balance outstanding and are reduced for lease
payments made. Right-of-use assets are amortised on a straight-line
basis over the remaining term of the lease or over the remaining
economic life of the asset if this is judged to be shorter than the
lease term.
When the Group revises its estimate
of the term of any lease, it adjusts the carrying amount of the
lease liability to reflect the payments to make over the revised
term, which are discounted at a revised discount rate that is
implicit in the lease for the remainder of the lease term. The
carrying value of lease liabilities is similarly revised if any
variable element of future lease payments dependent on a rate or
index is revised. In both cases, an equivalent adjustment is made
to the carrying value of the right-of-use asset, with the revised
carrying amount being amortised over the remaining lease
term.
Right-of-use assets are reviewed
regularly to ensure that the useful economic life of the asset is
still appropriate based on the usage of the asset. Where the asset
has reduced in value the Group considers the situation on an
asset-by-asset basis and either treats the reduction as an
acceleration of depreciation or as an impairment under IAS 36
'Impairment of Assets'. An acceleration of depreciation occurs in
those cases where there is no opportunity or intention to utilise
the asset before the end of the lease.
Exceptional items
Exceptional items are those which,
by virtue of their nature, size or incidence, either individually
or in aggregate, need to be disclosed separately to allow full
understanding of the underlying performance of the
Group.
Share based payments
The Group has issued share options
to certain employees, in return for which the Group receives
services from employees. The fair value of the employee services
received in exchange for the grant of the options is recognised as
an expense, the Group recognise the options at their fair value at
the grant date to establish the relevant fair values for PSP &
CSOP options.
The total amount to be expensed is
determined by reference to the fair value of the options granted
including any market performance conditions (for example the
Group's share price) but excluding the impact of any service or
non-market performance vesting conditions (for example the
requirement of the grantee to remain an employee of the
Group).
Non-market vesting conditions are
included in the assumptions regarding the number of options that
are expected to vest. The total expense is recognised over the
vesting period. At the end of each period the Group revises its
estimates of the number of options expected to vest based on the
non-market vesting conditions. It recognises the impact of any
revision in the income statement with a corresponding adjustment to
equity.
Changes to International Financial Reporting
Standards
The following standards have been
amended and adoption is mandatory for periods beginning on or after
1 January 2023, with early adoption permitted, none of these
standards would materially affect the Annual Report and Accounts:
IFRS 17 Insurance Contracts; Amendments to IFRS 17 - Initial
Application of IFRS 17 & IFRS 9 - Comparative Information;
Amendments to IAS 1 and IFRS Practice Statement 2 - Making
Materiality Judgements - Disclosure of Accounting Policies;
Amendments to IAS 8 - Accounting Policies, Changes in Accounting
Estimates and Errors - Definition of Accounting Estimates;
Amendments to IAS 12 - Income Taxes - Deferred Tax related to
Assets and Liabilities arising from a Single Transaction;
Amendments to IAS 12 - Income Taxes - International Tax Reform -
Pillar Two Model Rules.
2 Critical accounting
policies
Estimates and judgements
The Group makes certain estimates
and judgements regarding the future. Estimates and judgements are
continually evaluated based on historical experience and other
factors, including expectations of future events that are believed
to be reasonable under the circumstances. In the future, actual
experience may differ from these estimates. The estimates and
judgements that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within
the next financial year relate are set out below.
There were no areas of judgement in
the year. Where estimates and assumptions have been used these are
outlined below.
Fair value of biological produce
The Group's biological produce is
measured at fair value less costs to sell at the point of harvest.
The fair value of grapes is determined by reference to estimated
market prices at the time of harvest. Generally there is no readily
obtainable market price for the Group's grapes because they are not
sold on the open market, therefore management set the values based
on their experience and knowledge of the sector including past
purchase transactions. Refer to note 6 which provides information
on sensitivity analysis around this.
Impairment reviews
The Group is required to test
annually whether goodwill and brand names have suffered any
impairment. The recoverable amount is determined based on fair
value less costs of disposal calculations, which requires the
estimation of the value and timing of future cash flows and the
determination of a discount rate to calculate the present value of
the cash flows. Management does not believe that any reasonably
possible change in a key assumption would result in
impairment.
Fair value measurement
A number of assets and liabilities
included in the Group's financial statements require measurement
at, and/or disclosure of, fair value.
The fair value measurement of the
Group's financial and non-financial assets and liabilities utilises
market observable inputs and data as far as possible. Inputs used
in determining fair value measurements are categorised into
different levels based on how observable the inputs used in the
valuation technique utilised are (the 'fair value
hierarchy'):
•
Level 1: Quoted prices in active markets for
identical items (unadjusted)
•
Level 2: Observable direct or indirect inputs
other than Level 1 inputs
•
Level 3: Unobservable inputs (i.e. not derived
from market data).
The classification of an item into
the above levels is based on the lowest level of the inputs used
that has a significant effect on the fair value measurement of the
item. Transfers of items between levels are recognised in the
period they occur.
· Biological Produce (Note 6)
For more detailed information in
relation to the fair value measurement of the items above, please
refer to the applicable notes
3 Financial instruments -
risk management
The Group is exposed to risks that
arise from its use of financial instruments. This note describes
the Group's objectives, policies and processes for managing those
risks and the methods used to measure them. Further quantitative
information in respect of these risks is presented throughout these
financial statements.
There have been no substantive
changes in the Group's exposure to financial instrument risks, its
objectives, policies and processes for managing those risks or the
methods used to measure them from previous periods unless otherwise
stated in this note.
Principal financial instruments
The principal financial instruments
used by the Group, from which financial instrument risk arises, are
as follows:
Bank loans
Trade receivables
Cash and cash
equivalents
Finance leases
Trade and other payables
In addition, at the Company
level:
Intercompany loans.
The carrying amounts are a
reasonable estimate of fair values because of the short maturity of
such instruments or their interest bearing nature.
Liquidity risk
Liquidity risk arises from the
Group's management of working capital and the finance charges and
principal repayments on its debt instruments. It is the risk that
the Group will encounter difficulty in meeting its financial
obligations as they fall due.
The Group's policy is to ensure
that it will always have sufficient cash to allow it to meet its
liabilities when they become due. The liquidity risk of the Group
is managed centrally by the group treasury function. Budgets are
set and agreed by the board in advance, enabling the Group's cash
requirements to be anticipated.
The following table sets out the
contractual maturities (representing undiscounted contractual cash
flows) of financial liabilities:
|
At 31 December 2022
|
Up to 3
months
£'000
|
Between
3 and 12 months
£'000
|
Between
1 and 2 years
£'000
|
Between
2 and 5 years
£'000
|
Over 5
years
£'000
|
Total
£'000
|
|
Trade and other
payables
|
1,146
|
354
|
-
|
-
|
-
|
1,500
|
|
Loans and borrowings
|
201
|
603
|
804
|
14,317
|
-
|
15,925
|
|
Lease liabilities
|
25
|
74
|
99
|
298
|
3,887
|
4,383
|
|
Total
|
1,372
|
1,031
|
903
|
14,615
|
3,887
|
22,808
|
|
At 31 December 2023
|
Up to 3
months
£'000
|
Between
3 and 12 months
£'000
|
Between
1 and 2 years
£'000
|
Between
2 and 5 years
£'000
|
Over 5
years
£'000
|
Total
£'000
|
|
Trade and other
payables
|
1,413
|
467
|
-
|
-
|
-
|
1,880
|
|
Loans and borrowings
|
16,627
|
1,500
|
-
|
-
|
-
|
18,127
|
|
Lease liabilities
|
71
|
214
|
285
|
733
|
3,787
|
5,090
|
|
Total
|
18,111
|
2,181
|
285
|
733
|
3,787
|
25,097
|
Capital risk management
The Group's objectives when
managing capital are to safeguard the Group's ability to continue
as a going concern in order to provide returns for shareholders and
benefits for other stakeholders and to maintain an optimal capital
structure to reduce the cost of capital. In order to maintain or
adjust the capital structure, the Group may adjust the amount of
dividends paid to shareholders, return capital to shareholders,
issue new shares and increase or decrease debt.
Credit risk
Credit risk arises from cash and
cash equivalents and deposits with banks and financial institutions
and the risk of default by these institutions. The Group reviews
the creditworthiness of such financial institutions on a regular
basis to satisfy itself that such risks are mitigated. The Group's
exposure to credit risk arises from default of the counterparty,
with a maximum exposure equal to the carrying amount of the cash
and cash equivalents as shown in the consolidated statement of
financial position.
Credit risk also arises from credit
exposure to trade customers included in trade and other
receivables.
The Group applies the IFRS 9
simplified approach to measuring expected credit losses using a
lifetime expected credit loss provision for trade receivables. The
expected loss rates are based on the Group's historical credit
losses experienced over the three-year period to the period end.
Trade receivable balances are monitored on an ongoing basis to
ensure that the Group's bad debts are kept to a minimum. The
maximum trade credit risk exposure at 31 December 2023 in respect
of trade receivables is £1,167,000 (2022: £957,000) and due to the
prompt payment cycle of these trade receivables, the expected
credit loss is negligible at £13,000 (2022: £8,000).
Interest rate risk
The Group's main debt is exposed to
interest rate fluctuations. The Group considers that the risk is
not significant in the context of its business plans. The Group
moved to a fixed interest rate with the issue of the Deep Discount
Bond in January 2024.
4 Loss per
share
Basic earnings per ordinary share
are based on a loss of £2,965,000 (December 2022: £2,525,000) and
ordinary shares 60,637,465(December 2022: 60,595,919) of 1 pence
each, being the weighted average number of shares in issue during
the year.
|
|
Loss
£'000
|
Weighted average number of
shares
|
Loss
per Ordinary share pence
|
|
|
Year
ended 31 December 2023
|
(2,965)
|
60,637,465
|
(4.89)
|
|
Year
ended 31 December 2022
|
(2,525)
|
60,595,919
|
(4.17)
|
|
|
|
|
|
|
|
| |
Diluted earnings per share are
based on a loss of £2,965,000 and ordinary shares of 60,637,465 and
no dilutive warrant option.
|
|
Loss
£'000
|
Diluted number of shares
|
|
Loss per
Ordinary
share pence
|
|
Year
ended 31 December 2023
|
(2,965)
|
60,637,465
|
(4.89)
|
|
|
Year
ended 31 December 2022
|
(2,525)
|
60,595,919
|
(4.17)
|
|
|
|
|
|
|
| |
5 Property, plant and
equipment
|
|
Freehold
Land and
Buildings
£'000
|
Plant,
machinery
and motor
vehicles
£'000
|
Right of use asset
£'000
|
Mature
Vineyards
£'000
|
Computer
equipment
£'000
|
Total
£'000
|
|
Cost
|
|
|
|
|
|
|
|
At 1 January 2022
|
6,896
|
3,611
|
2,114
|
3,637
|
118
|
16,376
|
|
Additions
|
1,824
|
645
|
-
|
-
|
33
|
2,502
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2023
|
8,720
|
4,191
|
2,114
|
3,637
|
151
|
18,813
|
|
Additions
|
249
|
370
|
812
|
5
|
49
|
1,485
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freehold land and
buildings
£'000
|
Plant, Machinery and
motor Vehicles
£'000
|
Right of use asset
£'000
|
Mature vineyards
£'000
|
Computer
equipment
£'000
|
Total
£'000
|
|
Accumulated depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2022
|
762
|
2,269
|
138
|
779
|
85
|
4,033
|
|
Depreciation charge for the
year
|
128
|
311
|
46
|
146
|
16
|
647
|
Depreciation on
disposals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2023
|
890
|
2,515
|
184
|
925
|
101
|
4,615
|
|
Depreciation charge for the
year
|
142
|
353
|
155
|
148
|
18
|
816
|
Depreciation on
disposals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Right of use assets comprise land
leases on which vines have been planted and property leases from
which vineyard operations are carried out. These assets have been
created under IFRS 16 - Leases.
|
|
Depreciation on right of use assets
is included in the cost of inventory, therefore £155,000 (2022:
£46,000) transferred into stock in the year.
|
6 Biological produce
The fair value of biological
produce was:
|
|
December
2023
£'000
|
December
2022
£'000
|
|
At 1
January
|
-
|
-
|
|
Crop
growing costs
|
1,934
|
1,830
|
|
Fair
value of grapes harvested and transferred to inventory
|
(1,888)
|
(1,591)
|
|
Fair
value movement in biological produce
|
(46)
|
(239)
|
|
At 31
December
|
-
|
-
|
The fair value of grapes harvested
is determined by reference to estimated market prices less cost to
sell at the time of harvest. The estimated market price for grapes
used in respect of the 2023 harvest is £2,800 per tonne (2022:
£3,000 per tonne).
A 10% increase in the estimated
market price of grapes to £3,080 per tonne would result in an
increase of £199,000 (2022: £159,000) in the fair value of the
grapes harvested in the year. A 10% decrease in the estimated
market price of grapes to £2,520 per tonne would result in a
decrease of £199,000 (2022: £159,000) in the fair value of the
grapes harvested in the year.
A fair value loss of £46,000 (2022:
£239,000 loss) was recorded during the year and included within the
consolidated statement of comprehensive income. This measurement of
fair value less costs to sell is the deemed cost of the grapes that
is transferred into inventory upon harvest.
7 Inventories
|
|
December
2023
£'000
|
December
2022
£'000
|
|
Finished
goods
|
925
|
1,249
|
|
|
|
|
|
|
|
|
During the year £1,678,000
(December 2022: £1,858,000) was transferred to cost of
sales.
8 Loans and
borrowings
|
|
December
2023
£'000
|
December
2022
£'000
|
|
|
|
|
|
Current
liabilities
|
|
|
|
Bank
loans
|
16,627
|
-
|
|
Short-term loans
|
1,500
|
-
|
|
Total non
current loans and borrowings
|
18,127
|
-
|
|
Non-current liabilities
|
|
|
|
Bank
loans
|
-
|
12,541
|
|
Unamortised bank transaction costs
|
-
|
(168)
|
Total non current loans and
borrowings
|
|
|
The bank loan of £16,627,000 with
PNC Business Credit shown above includes early repayment fees and
associated costs of £336,000.
In August 2022 the Group entered
into an amended and restated agreement with PNC Financial Services
UK Limited with a total £16.5 million asset-based lending
facilities. These PNC facilities have been made available to the
Group for a minimum period of 5 years to 12 August 2027. The
interest rate is at the annual rate of 2.50% (2022: 2.50%) over
Bank of England Base Rate. In December 2023 the Group gave
notice to PNC Financial Services UK Limited to repay the balance in
January 2024. The PNC facilities are secured by way of first
priority charges over the Group's inventory, receivables and
freehold property as well as an all assets
debenture.
The Group decided to replace the
existing PNC borrowing facility with a new and enlarged facility on
very similar terms and conditions to the PNC borrowing facility.
The Group gave notice to close down the PNC facility in December
2023.
In November 2023 the
Group entered into a short-term unsecured loan facility of
£1.5m with Moongate Holdings Group Limited. The term of the
loan was one year and the interest rate is at the annual rate of
2.50% over Bank of England Base Rate.
In January 2024 the Group
subsequently issued a Deep Discount Bond for £20.0m, repaid the PNC
facility and the short-term loan of £1.5m.
An analysis of the maturity of
loans and borrowings is given below:
|
|
December
2023
£'000
|
December
2022
£'000
|
|
Bank and other loans:
|
|
|
|
Within 1 year
|
18,127
|
-
|
|
1-2 years
|
-
|
-
|
|
2-5 years
|
-
|
12,373
|
9 Lease liability
During the period the Group
accounted for seven (2022: six) leases under IFRS 16. The lease
contracts provide for payments to increase each year by inflation
or at a fixed rate and on others to be reset periodically to market
rental rates. The leases also have provisions for early
termination. The weighted average Incremental Borrowing Rate used
to calculate the lease liability was 4.25% and for new 2023 lease
6.68%.
|
|
Land & Buildings
£'000
|
|
Net carrying value - 1
January 2023
|
2,078
|
|
|
792
|
|
Interest
|
116
|
|
Payments
|
(223)
|
|
Net carrying value - 31
December 2023
|
2,763
|
|
|
December
2023
£'000
|
December
2022
£'000
|
|
The lease
payments under long term leases liabilities fall due as
follows:
|
|
|
|
Current
lease liabilities
|
251
|
84
|
|
Non
current lease liabilities
|
2,512
|
1,994
|
|
Total
liabilities
|
2,763
|
2,078
|
|
|
|
|
During the period an interest
charge of £116,000 (2022: £85,000) arose on the lease liability in
respect of land and property leases (2022: only land leases). This
interest cost has been added to growing crop costs and wine stocks
on the basis that the lease liability solely relates to the
production of grapes and wine.
The Groups leases include break
clauses. On a case-by-case basis, the Group will consider whether
the absence of a break clause exposes the Group to excessive risk.
Typically factors considered in deciding to negotiate a break
clause include:
· The
length of the lease term;
· The
economic stability of the environment in which the property is
located; and
· Whether the location represents a new area of operations for
the Group.
At both 31 December 2023 and 2022
the carrying amounts of lease liabilities are not reduced by the
amount of payments that would be avoided from exercising break
clauses because on both dates it was considered reasonably certain
that the Group would not exercise its right to exercise any right
to break the lease.
10 Share capital
|
|
|
Deferred shares of 49p
each
|
Ordinary shares of 1p
each
|
|
|
|
|
Number
|
Number
|
£'000
|
|
Issued and fully paid
|
|
|
|
|
|
At
1 January 2022
|
|
23,639,762
|
60,731,705
|
12,190
|
|
Issued in the year
|
|
-
|
42,282
|
1
|
|
At
31 December 2022
|
|
23,639,762
|
60,773,987
|
12,191
|
|
Issued in the year
|
|
-
|
71,306
|
1
|
|
At
31 December 2023
|
|
23,639,762
|
60,845,293
|
12,192
|
The Deferred shares of 49 pence
each have no rights attached to them.
On 16 January 2023 the Company
issued 2,174 new ordinary shares of 1p each pursuant to an exercise
of Warrants. All Warrants were exercised at 75p per
share.
On 1 September 2023 the Company
issued 7,838 new ordinary shares of 1p each pursuant to an exercise
of Warrants. All Warrants were exercised at 75p per
share.
On 3 November 2023 the Company
issued 61,294 new ordinary shares of 1p each pursuant to an
exercise of Warrants. All Warrants were exercised at 75p per
share.
Unexercised Warrants at 31 December
2023 amounted to of 3,888,671 (2022: 3,959,977) Ordinary Shares of
1 pence each. The warrants have a final exercise date
of 16 December 2024 at 75p per Ordinary Share. The warrants
are accounted for as a derivative financial liability measured on
inception at fair value through the profit or loss. On
inception, the fair value of the warrants was deemed to be £nil and
thus no fair value was recognised.
11 Related party transactions
Deacon Street Partners Limited is
considered a related party by virtue of the fact that Lord Ashcroft
KCMG PC, the Company's ultimate controlling party, is also the
ultimate controlling party of Deacon Street Partners Limited.
During the year Deacon Street Partners Limited charged the Company
£35,000 (December 2022 - £70,000) in relation to management
services. There was £40,000 due to Deacon Street Partners Limited
as at 31 December 2023 (December 2022 - £44,000).
Jaywing PLC is considered a related
party by virtue of the fact that Ian Robinson, a director of
Gusbourne PLC is also a Non-Executive Director of Jaywing PLC.
During the year Jaywing PLC charged the Company £103,000 (December
2022: £108,000) in relation to marketing services and £359,000 in
relation to third party digital advertising (December 2022:
£352,000). There was £76,000 due to Jaywing PLC as at 31 December
2023 (December 2022: £36,000).
On 18 June 2018, the company lent
£50,000 to a director as an interest free loan, repayable by
instalments from July 2019. The loan was repaid in September 2023.
The balance due from the director as at 31 December 2023 was £nil
(December 2022 - £22,000).
Details of related parties who
subscribed for the warrants are shown in the table
below:
|
Warrants exercisable at 75 pence
each
|
|
Name
|
|
|
|
Held as
at
31
December
2023
Number
|
Held as
at31
December
2022
Number
|
|
|
Lord Ashcroft KCMG PC*
|
|
|
|
2,660,158
|
2,660,158
|
|
|
Andrew Weeber
|
|
|
|
179,566
|
179,566
|
|
|
Paul Bentham**
|
|
|
|
121,083
|
121,083
|
|
|
Ian Robinson
|
|
|
|
15,801
|
35,801
|
|
|
Jim Ormonde
|
|
|
|
-
|
19,788
|
|
|
Mike Paul
|
|
|
|
-
|
10,607
|
|
|
Lord Arbuthnot PC
|
|
|
|
-
|
7,345
|
|
|
Matthew Clapp
|
|
|
|
4,816
|
4,816
|
|
|
Jon Pollard
|
|
|
|
3,171
|
3,171
|
|
|
Charlie Holland
|
|
|
|
2,770
|
2,770
|
|
|
|
|
|
|
2,987,365
|
3,045,105
|
|
* via Belize Finance Limited, a related party of Lord Ashcroft KCMG PC
**via Franove Holdings Limited, a
related party of Paul Bentham
Directors' remuneration was as
follows:
|
|
Year ended 31 December
|
Year ended 31 December
|
|
2023
|
2022
|
|
£'000
|
£'000
|
|
The total
emoluments of all Directors during the year was:
|
|
|
|
Emoluments (including benefits)
|
451
|
312
|
|
Contributions to defined contribution pension plans
|
17
|
13
|
|
Total
|
468
|
325
|
|
|
Year ended 31 December
|
Year ended 31 December
|
|
|
2023
£'000
|
2022
£'000
|
|
Total
emoluments for all directors excluding
|
|
|
|
pension
contributions:
|
|
|
|
J
Ormonde
|
61
|
59
|
|
A
Weeber
|
-
|
-
|
|
M
Paul
|
44
|
48
|
|
K
Berry
|
132
|
-
|
|
J
Pollard
|
86
|
77
|
|
C
Holland
|
128
|
116
|
|
Lord
Arbuthnot PC
|
-
|
-
|
|
M
Clapp
|
-
|
12
|
|
I
Robinson
|
-
|
-
|
|
Total
|
451
|
312
|
|
|
Year ended 31 December
2023
£'000
|
Year ended 31 December
2022
£'000
|
|
Pension
contributions
|
|
|
|
K
Berry
|
6
|
-
|
|
J
Pollard
|
6
|
6
|
|
C
Holland
|
5
|
7
|
|
Total
|
17
|
13
|
|
|
|
|
|
The
emoluments of the highest paid Director
|
|
|
|
during
the year were:
|
138
|
123
|
The total emoluments for K Berry, J
Pollard and C Holland include benefits to the value of £nil (2022:
£nil), £1,000 (2022: £1,000) and £2,000 (2022: £1,000) respectively.
12 Post balance sheet
events
On 19 January 2024, the Group
entered into an agreement with a company associated with Lord
Ashcroft (Moongate Holdings Group Limited) for the issue of a new
£20.0m long-term secured deep discount bond ("DDB") to support the
Company's working capital and ongoing growth.
The subscription price of the DDB
is £20m. The subscription proceeds of £20.0m was used to repay the
existing PNC Facility amounting to £16.3m, repay the short-term
unsecured Loan of £1.5m, related fees and expenses of £0.6m and the
remaining proceeds will be used for working capital and to support
the ongoing growth strategy of the Company.
The DDB was issued at a discount of
7.75% per annum on quarterly rests. The nominal amount is
£26.3m which is payable on the final redemption date of 12 August
2027. The DDB is secured over land, properties and stock,
with a full fixed and floating security over the assets of both the
Company and Gusbourne Estate Limited.