GUS Gusbourne Plc

31 January 2024

Gusbourne Plc

("Gusbourne" or the "Company")

Trading Update

Robust double-digit sales growth delivered in 2023

Gusbourne Plc (AIM: GUS), the premium English sparkling wine producer, is pleased to report the following unaudited trading update for the 12 months to 31 December 2023 (the "Period"), reflecting growth across all main sales channels and narrowing EBITDA losses.

Financial highlights

·    UK wine sales growth is expected to be up by c.17% to c.£5.0m (2022: £4.2m), maintaining strong double-digit sales growth across our direct to consumer ("DTC") and UK Trade sales channels, in spite of the challenging macroeconomic environment in the second half of 2023.

·    Total net revenue⁽¹⁾ for 2023 is expected to be up by c.13% (2022: 49%) to c.£7.1m (2022: £6.2m, 2021: £4.2m, 2020: £2.1m), reflecting continued robust sales growth across our three main sales channels⁽³⁾.

o  DTC wine sales grew by a very pleasing c.26% and overall net revenue, including Nest our cellar door operations in Kent, grew by c.18% to c.£2.0m representing c.29% (2022: 27%) of net revenue for the year. The strong growth was driven by investment in digital marketing and direct wine sales arising from our tour and experience⁽²⁾ programme at the Nest. The Nest increased in capacity during the Period, resulting in significant DTC revenue growth of c.31% during the second half of the year. DTC remains our highest gross margin channel.

o  UK Trade sales grew by c.13% to c.£3.4m, despite more difficult trading conditions in the second half of the year. UK Trade sales represent c.49% (2022: 49%) of net revenue. The Company continues to establish new trade accounts across premium hotels and restaurants and open new business through the fast growing corporate and partnerships channel.

o  International sales grew by c.7% to c.£1.5m and are expected to account for c.23% of total net wine sales (2022: 22%). This reflects a strong recovery in the second half as inventory levels were normalised as expected, as well as the impact of changeable large orders from overseas distributors which can distort short term sales trends, and do not necessarily reflect underlying in-market depletions.

·    Gross margin improved significantly to c.68% (2022: 59%), reflecting improved price and sales mix dynamics, in line with the Group's premium positioning and product strategy.

·    Full year adjusted EBITDA loss has narrowed from prior year (2022 £1.1m adjusted loss) and the board are encouraged by the continuing cost control measures.

·    Net debt at 31^st December 2023 is expected to be approximately £17.8m.

·    Completion of successful refinancing of debt arrangements, including issue of new £20m long-term secured deep discount bond, providing additional funding for future growth.

Operational highlights

·    Gusbourne remains one of the most globally recognised English sparkling wine producers, with distribution in over 35 international markets.

·    Capacity expansion at the Nest, following renovation work, increased capacity by 35% for our tour and experience programme.

·    Launch of several new products, including the critically acclaimed second vintage of Fifty One Degrees North, our repackaged still English Rosé and two new membership schemes.

·    Excellent quality and yield from the 2023 harvest.

·    During 2023, the Company received a record number of awards for its wines, winning more gold medals and trophies than ever before. Highlights include:

-     Four trophies, including retaining Estate Winery of the Year at the Wine GB awards

-     Collecting the Vintage English Sparkling Wine Trophy at this year's International Wine Challenge, along with eleven other medals

-     Thirteen medals, including two golds, at the Decanter World Wine Award

-     Five gold medals at the Champagne and Sparkling Wine World Championships

-     Blanc de Noirs and Blanc de Blancs of the Year in the England 2022 Special Report

-     Two Editor's Choice listings in Wine Enthusiast and four wines scoring over 94 points

-     A Judges' Selection and Platinum award at the Texsom Awards in the USA

Jonathan White, Gusbourne's CEO commented:

"2023 has seen the Group make further progress against our growth strategy as we continue to strengthen Gusbourne' s position as the one of the UK's most significant fine wine producers. These results have been achieved against a difficult macroeconomic environment, which ultimately resulted in more challenging trading conditions for the luxury goods sector in the second half of the year.

"Despite this backdrop we have continued to see significant consumer demand for Gusbourne's wines with robust growth across all three of our sales channels, underpinned by the careful and continued investment in the brand and the commitment and dedication of our talented team."

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

⁽²⁾ Experiences includes guests who visit our Cellar Door, The Nest, for a vineyard tour and wine tasting experience, as well as sales of experience gift vouchers.

⁽³⁾ In addition, £0.1m Other Revenue

For further information contact:

Enquiries

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. The person responsible for arranging for the release of this announcement on behalf of the Company is Katharine Berry, Chief Financial Officer.

Gusbourne plc (AIM:GUS) is a premium English sparkling and fine wine producer, specialising in the production and distribution of award winning wines, produced from grapes grown across its vineyards in Kent and West Sussex.

Since the Group planted its first vines in 2004, it has had a clear vision and single goal: to create English Still and Sparkling Wines that would stand up alongside the very finest offerings from across the globe.

From these humble beginnings, Gusbourne has focussed on building long-term assets to drive value creation for all stakeholders. Today, the Group is an acknowledged leader in the rapidly expanding English wine industry, achieving international brand recognition across its product range.  

Drawing on an estate of over 93 hectares of mature vineyards with additional new land available to scale further, the Gusbourne cellar continues to mature with ever expanding fine wine stocks becoming available to service the growing demands of the Group's increasingly international customer base.

Gusbourne's luxury brand enjoys premium price positioning and is distributed in the finest establishments both in the UK and overseas including premium hotels and restaurants, independent wine merchants, and high-end stockists and retailers. The Group also continues to invest in building strong relationships with its growing and loyal direct customer base, including through its immersive brand experience at its cellar door experiences, the Nest in Kent.