Trading and Capital Structure Update

RNS Number : 0497G

Gusbourne PLC

22 July 2021

 

22 July 2021

Gusbourne Plc

("Gusbourne" or the "Company")

Trading and Capital Structure Update

Gusbourne Plc (AIM: GUS), the award-winning English sparkling and still wine producer, provides the following trading and capital structure update for the 6 months to 30 June 2021.

Highlights of First Half to 30 June 2021

· Net revenue ⁽¹⁾ for the 6 months ended 30 June 2021 is expected to be up by 59% to c.£1.41m (2020: £0.89m) notwithstanding further Covid related disruption to our hospitality customers.

· Further strong growth in sales from Direct To Consumer (DTC) channels as the significant shift to DTC has continued during the first half year, with DTC net wine revenue more than doubling that of the prior year period. DTC sales for this period are expected to represent c.30% (2020: 22%) of net wine revenue. This growth has been supported by further strong online sales growth and increased visitor numbers at our cellar door facilities in Kent.

· UK Trade sales have rebounded sharply from their previous decline in 2020 and are expected to represent c.45% of net wine revenue for the half year (2020: 27%).

· Ongoing success in international wine competitions during the first half of the year, receiving a further 42 medals in 2021 including twelve gold medals and six trophies. Highlights include the Judges Selection Medal in the prestigious Texsom awards in the United States for our Brut Reserve 2016, a Platinum medal at the Decanter World Wine Awards for our Blanc de Blancs 2016 and trophy for 'Best Still Chardonnay' at the Wine GB awards for our Guinevere 2019.

These awards and increasing media coverage help to demonstrate the quality and luxury status associated with the Gusbourne brand and its vintage wines. The Company is attributing a growing importance of its award-winning vintage still wines to future sales plans.

Proposed Equity Fundraise

Following these continuing strong sales results, and in line with our previously stated intentions, the Company has decided to explore an equity fundraise of up to £15m to support further revenue growth and brand development across all distribution channels (DTC, UK Trade and International). The funds will also be used to increase operational efficiencies and to support planned ongoing business growth in the medium to longer term.

These investment plans will focus on further supporting strong growth in DTC sales in particular, both online, and also offline at cellar door operations at the Company's vineyards in Kent and Sussex. The Company believes a combination of online and offline engagement with customers is an important way of growing revenues whilst ensuring that the Company maintains and develops the luxury status that the Gusbourne brand of vintage wines represents.

Extension of maturity of short term loan and deep discounted bonds

The Company currently has a short-term loan and deep discounted bonds which are due for repayment on 15 August 2021 at £0.6m and £5.5m respectively, a total amount of £6.1m. Of this amount, £1.5m is due to some of the directors of the Company, £3.8m is due to the major shareholder of the Company, and £0.8m is due to third parties.

The Company announces that it has reached agreement with the required majority of the holders of the deep discount bonds to extend the maturity date of this debt from 15 August 2021 to 15 October 2021.

Extension of warrant exercise period

The Company currently has outstanding Warrants to subscribe for 2,024,017 ordinary shares of 1 pence each in issue. These Warrants are exercisable at any time by the warrant holder, with an exercise price of 75 pence per share until 29 July 2021. Most of these warrant holders are also holders of the deep discounted bonds.

The Company announces that it has reached agreement with the majority holders of the Warrants to extend the Exercise Period of the warrants under the warrant instrument dated 2 September 2016 from 29 July 2021 to 29 October 2021.

Related Party Transactions

The £0.6m short term loan referenced above is due to Franove Holdings Limited ("Franove"), a company wholly owned by Paul Bentham, a Non-Executive Director of the Company.

£0.9m of the deep discounted bonds are due to Andrew Weeber, a Non-Executive Director of the Company.

£3.8m of the deep discounted bonds are due to the major shareholder of the Company, Lord Ashcroft.

The warrants are held by Lord Ashcroft, the major shareholder of the Company, and Andrew Weeber, Ian Robinson, Lord Arbuthnot PC, Mike Paul and Matthew Clapp, all Directors of the Company. The number of warrants held by related parties are shown in the table below:

Name	Number
Lord Ashcroft KCMG PC	1,311,517
A Weeber	300,000
I Robinson	50,000
Lord Arbuthnot PC	5,000
M Paul	5,000
M Clapp	5,000
	1,676,517

The extensions of the short term loan, deep discount bonds and warrants exercise period therefore each constitute related party transactions under Rule 13 of the AIM Rules. The Independent Directors of the Company, having consulted with Canaccord Genuity Limited in its capacity as the Company's nominated adviser for the purposes of the AIM Rules, consider the terms of the transaction to be fair and reasonable insofar as the Company's shareholders are concerned.

The Independent Directors of the Company for the purposes of considering the related party transaction are Jim Ormonde (Non-Executive Chairman), Charlie Holland (Chief Winemaker and Chief Executive Officer) and Jon Pollard (Chief Vineyard Manager and Chief Operating Officer).

Charlie Holland, Gusbourne's CEO and Chief Winemaker commented:

"We are delighted to report significant year on year net revenue growth of 59% in the first six months of 2021. This is a reflection of our ongoing commitment to making wines of exceptional quality and our continued development of the Gusbourne brand over the past 17 years.

With an established luxury brand positioned at the top end of a rapidly growing English wine market, we believe now is the right time to seek wider investor support to accelerate our growth plans and add significant scale to the business."

⁽¹⁾ Net revenue is revenue reported by the Company, net of excise duties payable, and before grants receivable.

For further information contact:

Gusbourne Plc

Charlie Holland              [phone] 

Canaccord Genuity Limited (Nomad and Joint Broker)

Bobbie Hilliam   [phone]

Georgina McCooke

Panmure Gordon (UK) Limited (Joint Broker)      [phone]

Oliver Cardigan

Hugh Rich

Ailsa MacMaster

Note: This announcement and other press releases are available to view at the Company's website: www.gusbourneplc.com

Note to Editors

Gusbourne produces and distributes a range of high quality and award winning vintage English sparkling and still 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 231 acres 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.

We are one of England's most awarded wine producers. Highlights include:

· Three times winner of the International Wine & Spirits Challenge (IWSC) English Wine Producer of the Year, having won the award in 2013, 2015 and 2017- a unique achievement

· Blanc de Blancs 2016 awarded platinum medal at 2021 Decanter World Wine Awards

· Brut Reserve 2016 received the 'Judges Selection' award at 2021 Texsom in the United States

· Trophy for best still white wine awarded for our Guinevere 2019 at Wine GB Awards 2021

· Highest rated English sparkling wine by the Wine Enthusiast in 2020

· Trophy for best English Still Red Wine at Wine GB awards three years running

· Best in Class trophies at the Champagne & Sparkling World Championships in both 2018 and 2019

· 'Best English Sparkling Wine' as well as overall 'IWC China Champion Sparkling Wine 2019' at the International Wine Challenge held in Shanghai

 

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