Chapel Down disposes of Curious Drinks to Risk Capital Partners

By Nikkie Thatcher

- Last updated on GMT

Big build: the Curious Brewery was unveiled in May 2019
Big build: the Curious Brewery was unveiled in May 2019

Related tags: Beer, Wine, Brewing, Finance, Luke johnson

English winemaker Chapel Down has announced the disposal of its Curious Drinks business and assets, including the Curious Beer and Cider brands as well as the Curious Brewery and restaurant in Ashford, Kent.

Subject to the granting of HMRC licences to NewCo Risk Capital Partners, the company is looking to place Curious Drinks into administration where Luke Johnson’s Risk Capital will acquire the business and assets from administrators.

Curious Drinks supplies 90% of its beer to the on-trade and the impact of the coronavirus crisis has significantly hampered this area of the business.

However, its wine and spirits business, which has a multichannel route to market, has seen overall volume growth of 38% in 2020.

This was put down to an increased focus and sales to supermarkets and other off-premise retailers alongside direct sales online, which the business stated had more than compensated for the loss of sales through the on-trade.

The firm will see no redundancies as part of the disposal and the effect, is to remove the Curious business from the Chapel Down Group with the attendant net debt in Curious.

It will reduce Chapel Down’s unaudited net debt from £7.2m to £100,000 with £4.6m cash on a proforma basis at 31 December 2020.

Very bright future

Chapel Down Group CEO Frazer Thompson said: “The Covid-19 pandemic has upturned the best laid plans of businesses all over the world and has required companies to respond to the crisis with flexibility and agility.

“In our case that involved pivoting our multichannel strategy to have a stronger focus on supermarkets and e-commerce direct sales to consumers for our wines, which resulted in volume sales growth of 38% in 2020.

“Demand and respect for English wines and Chapel Down in particular, is growing all the time and as the leading brand and business, we see a significant opportunity and a very bright future for Chapel Down.”

However, Thompson highlighted Chapel Down won’t be abandoning hospitality altogether and will support the trade’s return with the company’s wine and spirits offer.

He added: “It has, however, been a very difficult year for the Curious Drinks business which, as a young brand with 90% of its sales to the on-trade hospitality sector, has been severely impacted by the uncertainty and frequent shuttering of that industry.

“Following a strategic review, the board has taken the decision to focus our energy and resources on building the Chapel Down brand and business to ensure we continue to flourish.

“While this has been a difficult decision, we are very pleased to have found in Risk Capital Partners an excellent home for Curious Drinks and the Curious team, where the business will be able to fulfil its exciting growth potential. I’m delighted we will be able to offer Curious Drinks shareholders shares in Chapel Down Group.”

He outlined how the future will bring the company selling more wine and thanked supporters of Curious Drinks.

Increasing confidence

Thompson said: “Looking ahead, thanks to yet another excellent harvest in 2020, we will be able to release more wine for sale while also putting aside more base wine for future growth.

“We look to the future with increasing confidence and will continue to drive the business for the benefit of all our stakeholders.

“I would like to take this opportunity to thank the team at Curious Drinks and the brewery, and all those customers and suppliers who have supported it over the years. I look forward to seeing its continued success in the coming years under new ownership.”

Subject to completion of the disposal, Chapel Down will offer all registered Curious shareholders the opportunity to convert their shares in Curious into shares in Chapel Down.

This will be at 1.57 for each share, based on the average closing price of a Chapel Down Share for the 10 days ending 8 February 2021 of 63.8p – equivalent to 50% of their original investment in Curious.

Risk Capital Partners founder Luke Johnson said: “We see terrific potential in the Curious Drinks business and we are very excited about its future, despite the challenges of the past year.

“Brewing will always be a cornerstone of British culture and the craft beer revolution has only strengthened that.

“Curious is a great brand made in a fabulous facility and with our support, the business can be developed further.

“We are particularly pleased to be taking on all Curious employees, who bring with them, a wealth of insight and knowledge.”

No date has been confirmed for completion of the disposal at present and a further announcement will follow upon completion.

Related topics: Beer

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