Cult Wines Announces Record Annual Results

Global revenues grew by 54% to £52m

• Assets under management increased to £90m.
• International revenue grew 64% led by Asia.
• UK revenue up 40% year-on-year despite Brexit uncertainty.
• New partnerships with banks and wealth managers scale investor base.
• Strong investor appetite for Champagne and Burgundy.

Growth generated by UK and international network

Cult Wines’ annual revenues grew 54% to £52m over the last 12 months. Its fast-expanding international client base contributed 53% to total revenues, overtaking the domestic market for the first time. The company saw strong UK sales growth of more than 40%, reaching a total of £24.5m.

Asia leads global growth with further regional expansion

Asia was the fastest-growing region with revenues increasing 84% to more than £20m. Growth in the region was broad-based, with significant double- and treble-digit revenue increases in China, Singapore, Thailand, Indonesia, Malaysia and the Philippines. To spearhead continued growth in South East Asia, Cult Wines opened a new office in Singapore in October 2018.

Cult Wines’ portfolio returns outperform Liv-ex¹

Achieving consistently strong investment performance has been central to Cult Wines’ growth and its average portfolio returns once again outperformed the industry benchmark; in the year ending 31 August the Cult Wine Investment Performance returned 6.35%, outperforming the Liv-ex 100 recognised benchmark, which returned 2.37% over the same period.

New partnerships with banks and wealth managers

Cult Wines grew its network of partnerships with leading global and regional banks, private wealth managers and investment advisers. Over the past 12 months the company agreed 20 new partnerships with leading institutions. Revenue from partnerships for the financial year reached more than £10m.

Demand for Champagne and Burgundy while Rhone emerges as one to watch

Over the past year Cult Wines saw sales of investment grade Champagne increase ten-fold, and investment-grade Burgundy by 70%. Despite reports of a difficult en primeur campaign, Bordeaux sales were up 36% for the year, with the 2017 vintage accounting for £10m, a third of total Bordeaux sales.

Looking forward, early indications from the 2018 harvest in both Bordeaux and Burgundy suggest that this vintage will be both high quality and a bumper year in total production – a potentially winning combination for en primeur buyers in 2019.

Tom Gearing, Managing Director of Cult Wines and former finalist of BBC THE APPRENTICE, said:

“The company has delivered another period of outstanding revenue growth. South East Asia has once again seen the biggest increase in sales, driven by our improved distribution. The opening of a new office in Singapore, which complements our existing presence in Hong Kong and Shanghai, underlines our long-term commitment to the region and the tremendous growth potential we’re seeing throughout South East Asia.

“Over the past year our partnerships model has achieved tremendous success in rapidly scaling our international investor base. Investors and their advisers are becoming increasingly familiar with the role fine wine can play as a stable and defensive asset class that can mitigate downside risk.”

Phil Gearing, Chairman of Cult Wines added:

“With overseas revenue beating the UK this year for the first time, Cult Wines is well placed to weather any Brexit-related domestic headwinds that may emerge in the coming months. We are firmly committed to a global strategy and we are looking forward to increasing our footprint in North America in 2019. Over the next 12 months we expect to accelerate our expansion, both organically and potentially through acquisition too.”

Top performers

In terms of investment performance from wines sold this year, Cult Wines points to a significant rise in prices of top-level Burgundy with specific mention of Domaine du Comte Liger-Belair and Domaine Leroy, with even recent vintages doubling in price in the past year such as Comte Liger-Belair Vosne Romanee Aux Reignots 2015 (+112.5%) and Domaine Leroy, Pommard Vignots 2015 (+110.5%). Cult Wines’ Bordeaux highlights include Margaux 2015 (+80%) and Le Pin 2016 (+38.5%), whilst Screaming Eagle 2014 lead the US increasing to £29,000 per 12 from £20,800 in under a year, and the legendary Sassicaia 1985 finding a market at £29,000 per 12 up from £20,000 at the start of the year, one of the best performing Italian wines.

¹Liv-ex: The Liv-ex indices track the prices of the most traded fine wines on the market, providing an industry benchmark for fine wine investment.