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When considering the type of growth stocks that the UK is famous for, your mind perhaps goes to finance or pharma. These sectors are what Britain is known for in the modern day. The prospect of an exciting new fintech popping up on the London Stock Exchange and growing 10 times or more in value isn’t totally out of the realms of possibility.
One area that this sceptred isle is not renowned for is wine. Until not so long ago, the grapes needed to make wines of red or white or any other colour didn’t thrive on these shores. But there is a company trying to change that – the UK’s largest wine producer which is now trading for just 35p a share…
What’s the stock?
The stock I am referring to is Chapel Down Group (LSE: CDGP). The company has been around a while in one form or another. Alhough, it’s only relatively recently it has pivoted towards winemaking. It’s fairly small too, with only a £57m market value. Its operations are based in the Kent area, where about 1,000 acres of vineyards are producing around 9% of the UK’s total production of the grape-based beverage.
Of particular note is the reason why vineyards are popping up in our country. The impact of climate change is somewhat out of the scope of a 500-word article on investing. Suffice to say, the changes in weather conditions are making the south of England into a hotspot for this type of agriculture.
The company already has a small foothold in the market. Its revenue has been at or above the £20m mark in each of the last few years, selling a range of still and sparkling wines. My local Waitrose is already stocking some of its white and rosé wines in the competitive £14-£16 price range.
Is it a buy?
It is still early days for Chapel Down and the British winemaking industry at large. This can be seen in the last few years’ income statements. In 2025, the firm booked a £230k profit; in 2024, a loss; and in 2023, a £1.5m profit. There’s plenty of inconsistency there.
While the targets are for double-digit growth in the years ahead, investors must be aware of the risk in investing in a company that is not yet delivering stable earnings. And the earnings that are coming in are scant. The price-to-earnings ratio of about 300 is far from what we might call a value stock.
The inconsistency of smaller, less stable companies can crop up in the share price. And that is certainly the case here. The stock has dropped 54% since a high reached in the summer of 2024. Such a drop could equally be seen as an opportunity to buy into a growing company on the cheap. I think it could be worth considering.
This story originally appeared on Motley Fool
