Gamble of the week: Put the sparkle into your portfolio with English wine

Sometimes it’s nice to have a bit of fun when you are investing. One way to do that is to take a punt on an interesting business that provides you with a few perks, and which might make you a bit of profit if you hold it for long enough.

This maker of English sparkling wine and beer could fit the bill. English sparkling wine has built up a decent reputation in recent years and this English winery is a leading producer.

It makes sparkling wine for the likes of Marks & Spencer and has won quite a few awards for its vintages. Sales and profits have been held back by poor grape harvests in 2011/2012, but the last two harvests have been better and we should see production increase again.

Chapel Down (NEX: CDGP) has also moved into the beer market. Its Curious Brew beer is an English lager made with champagne yeast. It has proved to be a big hit with consumers, and sales are up by 60% so far this year. This gives Chapel Down an extra string to its bow.

Although Chapel Down has a stock market listing – it’s on the ISDX exchange for small firms (formerly Plus) – it’s looking to raise fresh capital via the new trend of equity crowdfunding.

It hopes to raise at least £1m on the Seedrs crowdfunding platform. The maximum possible raise is just over £3m and once that target has been reached, investors won’t be able to subscribe for any more new shares.

The money raised will be used to plant more vines, build a new winery and a new brewery, among other things. If you are still able to subscribe when you read this, then there are a few perks on offer.

If you invest more than £560, you will be entitled to some decent discounts off wine and beer. And if you are a UK taxpayer, you may be eligible for Enterprise Investment Scheme (EIS) relief of 30% on your investment.

Even if you can’t get in on the Seedrs crowdfunding round, it might be worth buying Chapel Down shares on ISDX. Profits have been low in recent years due to investment, but the company owns some good brands, while recent transactions suggest that the value of the land on its balance sheet might be understated. The market cap is only £25m, but the company may have sown the seeds for a more valuable future.

It would not surprise me if at some point a bigger drinks company snapped up Chapel Down for a much higher share price than it trades at today.

Verdict: worth a punt


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