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

published 15 September 2014

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 wineryis 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 increaseagain.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

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.

If you investmore than £560, you will be entitled tosome decent discounts off wine andbeer. And if you are a UK taxpayer,you may be eligible for EnterpriseInvestment Scheme (EIS) relief of 30%on your investment.

Even if you can't get in on the Seedrscrowdfunding round, it might be worthbuying Chapel Down shares on ISDX.Profits have been low in recent yearsdue to investment, but the companyowns some good brands, while recenttransactions suggest that the value ofthe land on its balance sheet might beunderstated. The market cap is only£25m, but the company may have sownthe seeds for a more valuable future.

It would not surprise me if at some pointa bigger drinks company snapped upChapel Down for a much higher shareprice than it trades at today.

Verdict: worth a punt

Phil spent 13 years as an investment analyst for both stockbroking and fund management companies.

After graduating with a MSc in International Banking, Economics & Finance from Liverpool Business School in 1996, Phil went to work for BWD Rensburg, a Liverpool based investment manager. In 2001, he joined ABN AMRO as a transport analyst. After a brief spell as a food retail analyst, he spent five years with ABN's very successful UK Smaller Companies team where he covered engineering, transport and support services stocks.

In 2007, Phil joined Halbis Capital Management as a European equities analyst. He began writing for MoneyWeek in 2010.