Chapel Down FY25 results analysis – revenue up 19%, profits back, but debt climbs
Chapel Down has delivered a strong set of FY25 numbers. Net sales revenue rose 19% to £19.4 million, adjusted EBITDA – a measure of underlying operating profit before items like depreciation, financing and one-offs – increased 25% to £3.7 million, and the group swung back to a profit before tax of £469,000 from a £1.4 million loss last year.
For retail investors, the headline is simple: the business is growing nicely, the brand looks stronger, and profitability is moving in the right direction. The less cheerful bit is that net debt has increased to £12.4 million and management is planning to spend more on marketing in FY26, which may cap near-term profit growth.
| Key FY25 figures | FY25 | FY24 | Change |
|---|---|---|---|
| Net sales revenue | £19.4 million | £16.4 million | +19% |
| Gross profit | £9.2 million | £7.9 million | +16% |
| Gross margin | 47.1% | 48.4% | -1.3 percentage points |
| Adjusted EBITDA excluding fair value adjustment | £3.7 million | £3.0 million | +25% |
| Profit before tax | £469,000 | £1.4 million loss | Improved |
| Diluted earnings per share | 0.13p | (0.76)p | Improved |
| Net debt excluding lease liabilities | £12.4 million | £9.2 million | +36% |
Chapel Down sales growth by channel – Off-Trade was the standout performer
The biggest driver of growth was Off-Trade, which means sales through retailers such as supermarkets. Revenue here jumped 38% to £9.4 million, helped by improved stockholding from retailers after a one-off destocking issue in FY24, plus better distribution and strong Christmas execution.
That matters because it shows Chapel Down is not just riding category growth – it is taking share. The company said its sparkling wine consumer sales growth of 16% beat the wider English Sparkling Wine category, which grew 12%, and its Off-Trade market share ended the year at 36%.
Elsewhere, On-Trade sales – pubs, bars, restaurants and hotels – rose 5% to £2.6 million. That is steady rather than spectacular, but management says the figure is flattered less by pipeline fill than last year, while outlet numbers and listings both increased strongly.
International sales were also impressive, up 49% to £1.0 million. The key point here is the US, where Chapel Down is now available in 23 states through Jackson Family Wines, up from 10 states in FY24. That is still small in absolute terms, but it gives investors a credible long-term growth angle.
Direct-to-consumer revenue edged up 1% to £6.4 million, or 3% excluding the exited spirits business. That is perfectly respectable, though clearly not the main growth engine right now. Ecommerce improved in the second half, and the Tenterden brand home still looks like a useful asset for customer loyalty and higher-margin sales.
Traditional Method Sparkling wine is doing the heavy lifting
The real story inside the numbers is premium sparkling wine. Traditional Method Sparkling wine sales rose 28% to £13.6 million and now represent 74% of wine-related net sales revenue, up from 70% last year.
That is important because premium sparkling is where Chapel Down wants to play. It is a better fit for the brand, supports stronger pricing over time, and gives the group a clearer route towards its long-term ambition of reaching the equivalent of 1% of global Champagne volumes by 2035.
For the first time, Chapel Down dispatched more than 1 million bottles of Traditional Method Sparkling wine in a single year. That is a meaningful milestone. It suggests the brand is scaling, not just surviving.
Gross margin slipped in FY25 – but management says that should improve in FY26
Not everything improved. Gross margin fell to 47.1% from 48.4%, mainly because a bigger slice of sales came through the lower-margin Off-Trade channel and because the company was selling wines from the 2022 harvest, when input costs – especially glass – were hit by inflation.
The good news is management expects this to unwind in FY26 as lower-cost 2023 harvest wines become available for sale. If that happens, Chapel Down could get a useful margin tailwind even before any further volume growth is considered.
So my read is this: the margin pressure looks more like a temporary mix and vintage-cost issue than a broken pricing model. That makes the decline much easier to live with.
Cash flow, stock and net debt – the balance sheet is still the area to watch
The main yellow flag in these results is the balance sheet. Net debt excluding lease liabilities increased to £12.4 million from £9.2 million, while inventories rose 15% to £30.6 million.
There are sensible reasons for that. Chapel Down is investing in new vineyard capacity, building maturing sparkling wine stock, and benefited from an above-average 2025 harvest. In sparkling wine, stock build is part of the business model because wines mature over time before sale.
Even so, investors should not ignore it. Cash and cash equivalents were only £262,000 at the year end, although the group still had headroom under its £20 million revolving credit facility, with an accordion option to extend that to £30 million.
Operating cash flow improved sharply to £5,000 from an outflow of £3.8 million in FY24, which is better, but it is hardly overflowing with cash. This remains a growth business that still needs careful capital management.
Brand investment and vineyard expansion – why Chapel Down is leaning in now
Management is clearly backing the brand. Awareness rose to 49% from 42%, and the company is investing in marketing, partnerships and its Tenterden site, including a new tasting room expected to open before summer 2026.
There is logic to that. If Chapel Down can strengthen its position as the standout English sparkling wine brand, it becomes easier to win new listings, support pricing and build repeat purchases. In consumer businesses, brand strength is often the difference between steady growth and a hard slog.
The company is also developing newer vineyard plantings at Boxley Abbey and Buckwell, expected to be fully productive from 2026 and 2027 respectively. That should support future premiumisation and stock availability, but again it comes with upfront capital demands.
FY26 outlook – strong start, better gross margin, but profit growth may pause
The outlook statement is encouraging. Chapel Down says it has started FY26 strongly, trading well ahead of the same period last year across all key channels, with gross margin improvement in line with expectations.
However, there is an interesting twist. The board plans to increase discretionary marketing spend to 13.5% to 14.5% of net sales revenue in FY26, up from 11% in FY25. So although market expectations point to revenue rising to £22.1 million, adjusted EBITDA excluding the fair value adjustment is expected to be £3.7 million – flat year on year.
That tells you management is choosing to reinvest rather than simply harvest short-term profit. I think that is strategically sensible if the returns are real, but it does mean investors hoping for near-term earnings acceleration may need a bit of patience.
What Chapel Down FY25 results mean for retail investors
Overall, these are good results. Revenue growth is strong, profit has returned, the premium sparkling strategy is working, and the early FY26 trading update sounds upbeat.
The risks are also clear enough. Debt is higher, stock is heavy, and this business still ties up a lot of capital before bottles turn into cash. Add in macro risks around consumer spending and energy costs, and it is not a completely carefree story.
Still, on balance, this RNS reads positively. Chapel Down looks like a business with real momentum, a strong niche, and a management team willing to invest for scale. If gross margin does recover in FY26 as promised, that could make the next set of numbers even more interesting.
