Wine maker Chapel Down in Tenterden first company on London stock markets to raise money by crowdfunding targeting £4m to buy new vineyards in Kent

Wine maker Chapel Down has unveiled plans to raise nearly £4m by becoming the first ever company on the stock market to raise cash using crowdfunding.

The vineyard owner wants to make its share ownership more democratic in an experiment aiming to attract investors keen to spread the word about its products.

The venture will fund plans to lease 400 acres of land in Kent, which it hopes will help treble the amount of wine it bottles in the coming years.

Chapel Down Winery
Chapel Down Winery

Investors will be able to buy as little as £10 worth of shares under the scheme, which is also the largest crowdfunding exercise ever attempted in the UK.

In exchange for their cash, shareholders who own at least 2,000 shares will receive discounts on the company’s wines, plus incentives like free tours and meal discounts at the Swan restaurant in its Tenterden base.

Shares will be issued at 28p each, their current price on the London ISDX Growth Market.

The move comes a year after the company raised £4.35m by issuing new shares on the market, when it attracted significant interest from the wider public.

Chapel Down vineyard in Tenterden
Chapel Down vineyard in Tenterden

Chief executive Frazer Thompson said: “If you can’t get excited about this in business, I struggle to see what you are going to get excited about.

“I’m not just looking for shareholders – I’m looking for pilgrims. I want people who love this brand, drink it, want to make a saving and want to come on the journey with us.

“We discovered there are hundreds of shareholders out there who would like to do what I do every weekend, which is to buy a few bottles of my wine and then bore people to tears about how good it is over dinner.

“It is all very well going to institutions and raising lots of money from very rich people, but actually wouldn’t it be far better to democratise share ownership?

Chapel Down chief executive Frazer Thompson
Chapel Down chief executive Frazer Thompson

“We can get shares into thousands of peoples’ hands who will help us sell more wine, make more money and build long-term value for the company and for Kent.

“We can have tens of thousands of shareholders, instead of a few big ones, who are taking an active part in wanting Chapel Down to succeed.

“Clearly crowd funding is the best way of doing that.”

Chapel Down aims to invest the money in 400 acres of new vineyards at four sites in the North Downs and other parts of Kent, believed to be Boxley – near one of its current vineyards on Blue Bell Hill – Sandhurst and Hawkhurst.

Chapel Down is expecting a 'good harvest' this year
Chapel Down is expecting a 'good harvest' this year

The money will be raised on crowdfunding website Seedrs, which itself holds the record for the largest money raised using the method to date, attracting £2.85m of investment for its own expansion plans.

Investors will also be eligible to claim government help in the form of EIS relief. This takes 30% off the cost of the shares to investors through of tax relief, provided the shares are held for at least three years.

Shareholders will get a 33% discount on wine, bringing a typical bottle of Chapel Down fizz down from £19.99 to £13.99.

Chapel Down is expecting its second record harvest in two years
Chapel Down is expecting its second record harvest in two years

They will also get a free tour for two at Chapel Down and 25% discount on a meals for four at the Swan restaurant on site, excluding drinks.

To qualify for most of the benefits, investors will need to own about £560 worth of shares.

Chapel Down is still finalising the acquisition of leases on the 400 acres of land it aims to buy using the money.

The new vineyards will be capable of producing 1.2m bottles of wine a year, increasing production by 133% from 2019. The company sold about 600,000 bottles last year following a record harvest.

“We want people to hold onto the shares, feel great about owning them and see them go up in value..." - Chapel Down's Frazer Thompson

The company revealed last week it is expecting its second consecutive record crop this year, up about 10%.

Chapel Down is the ninth most widely distributed wine brand in London. Its customers include M&S, Waitrose, Selfridges, Harvey Nichols and Savoy.

Today, the company announced sales had risen 21% in the first half of the year to £2.44m, with wine sales up 12% and beer up 60%.

However, the wine maker is coming off the back of a dip in profits to £68m in 2013, falling from £414,000 the year before after two poor harvests.

Mr Thompson added: “We want people to hold onto the shares, feel great about owning them and see them go up in value. The best thing they can do is buy more stuff from us.

"It is about trying to get people who love what we do to buy into it and there are thousands of people who want to buy shares in Chapel Down.

“The best way anyone can help us is by going around telling people how good it is. If you’re a shareholder it’s in your interest to tell people how good it is. That is why it’s exciting.”

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