Trading Update, Refinancing & Land Purchase

RNS Number : 9304V

Gusbourne PLC

15 August 2022

 

15 August 2022

Gusbourne Plc

("Gusbourne", the "Company" or the "Group")

Trading update

Increase in debt facilities

Purchase of freehold land

Trading Update

Gusbourne Plc (AIM: GUS), the English sparkling wine producer, provides the following trading update for the six months to 30 June 2022, ahead of announcement of its interim results.

Highlights:

·     Net revenue  ⁽¹⁾  for the six months ended 30 June 2022 is expected to have more than doubled from the same period in 2021 with an increase of 108% over H1 2021 (2021: 63%). Net revenue (unaudited) for the six months is expected to be £3.01m (2021:  1.45 million and 2020: £0.89 million), which partly reflects a significant recovery from the prior year effects of COVID-19 in H1 2021, particularly on UK Trade sales as well as the timing of certain International sales.  

· Direct to consumer (DTC) sales are expected to have grown by 66% in H1 driven by online sales and cellar door operations in Kent.

· UK Trade sales are expected to have grown 128% as the sector continued to recover from the prior year effects of COVID-19. International sales also performed strongly with continuing sales to Norway, USA and Japan as the largest customer destinations.

Increase of £6m in existing PNC asset-based lending facilities

Gusbourne is today pleased to announce that its wholly owned subsidiary, Gusbourne Estate Limited, has entered into an amended and restated agreement with PNC Financial Services UK Limited ("PNC") to increase its existing £10.5 million 5-year asset-based lending facilities by an additional £6 million to provide the Company with a total £16.5 million asset-based lending facilities at a competitive rate (the "New PNC Facilities"). The New PNC facilities have been made available to the Company for a minimum period of 5 years to 12 August 2027.

The New PNC Facilities are being provided on a revolving basis and will be used to provide further working capital for the Company covering inventory and accounts receivables, to support its growth plans and allow flexible drawdown and repayments in line with the Company's working capital requirements. The interest rate will be at the annual rate of 2.50 per cent over the Bank of England Base Rate. The facilities will be secured by way of first priority charges over the Company's inventory, receivables and freehold property as well as an all-assets debenture and contain financial and general covenants and customary events of default. The financial covenants include cash burn, fixed charge cover, capital expenditure restrictions and minimum headroom levels, and are tested monthly.

Purchase of Additional Freehold Land in Kent from a Related Party

The Company is pleased to announce that it has exchanged contracts with Andrew Weeber, Non-Executive Director and a shareholder of the Company, and his spouse, to purchase 137 acres of freehold agricultural land located in A ppledore, Ashford in Kent (the "Land Purchase"). The agreed completion date is 24 August 2022. The property is adjacent to and contiguous with the Company's existing freehold estate in Kent, where the majority of the Company's existing mature vineyards are planted.

This will bring the total freehold acreage of land in Kent owned by the Company to 489 acres. The purchase price for the Land Purchase is £1.6 million in cash from existing cash resources plus related acquisition costs. There are no profits attributable to the land being acquired. 

The Company has previously established the suitability of this additional land for vines and intends to plant the majority of this acreage with vines in May 2024, which will provide the required lead time to order the appropriate vines and prepare the land for planting. The additional wine production from grapes grown on these new vineyards will help support the longer-term growth plans of the Company.

The Land Purchase constitutes a related party transaction under Rule 13 of the AIM Rules. The Directors of the Company (excluding Andrew Weeber) consider, having consulted with Canaccord Genuity Limited in its capacity as the Company's nominated adviser for the purposes of the AIM Rules, that the terms of the Land Purchase to be fair and reasonable insofar as the Company's shareholders are concerned.

Charlie Holland, Chief Winemaker and Chief Executive Officer commented:

"I am delighted to report strong sales growth for the first six months of 2022, with net revenue more than double the same period of 2021. We continue to enjoy strong demand for Gusbourne wines driven by the continued expansion of our customer base, both in the UK and internationally. It also reflects the luxury status and reputation of the Gusbourne brand, the dynamic growth of the English wine sector and the increasing demand for English wines.

I am also delighted to report the increase of £6m in our asset-based financing facilities from PNC which will provide combined lending facilities of £16.5m for a further 5 years and provide valued long term support for the Company's further growth plans.

The additional freehold land in Kent, which I am very pleased the Company has been able to acquire, will form a key part of our production expansion plans over the coming years".

(1) Net revenue is revenue reported by the Company after excise duties payable

For further information contact:

Gusbourne Plc Charlie Holland	[phone]
Canaccord Genuity Limited (Nomad and Joint Broker) Andrew Potts Bobbie Hilliam Georgina McCooke	[phone]
Panmure Gordon (UK) Limited (Joint broker) Oliver Cardigan Hugh Rich Ailsa MacMaster	[phone]

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 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

· Back-to-back winner of 'Winery of the Year' at the WineGB Competition in 2021 and 2022

· Trophies for 'Best English Still Red Wine', 'Best English Still White Wine' and 'Best English Still Wine' at Wine GB awards 2022

· Trophy for 'Best Vintage English Sparkling Wine' at the 2022 International Wine Challenge

· Shortlisted for 'Best Sparkling Wine Producer' at the 2022 International Wine and Spirits Competition

· Awarded 'Judges Selection' trophy at the Texsom 2020-2022

Gusbourne's luxury brand enjoys premium price positioning, and its wines are distributed in some of 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.

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.

 

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