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I’m a bit unsure this morning of exactly how to define “a winner.” The share price of newly relisted AIM member, Gusbourne Estate (LSE:GUS) rose faster than the bubbles in a flute of sparkling wine. When the bottle was opened this morning the share price bubbled up from 74.50 pence to 99.50, and 25% increase.
It’s not that investors were suddenly tipsy, but they certainly were giddy when the sharp increase in the share price had nothing to do with either an operational report nor an analyst’s rating. The stock became a winner this morning because of acclamation received by the most discerning of discerning spirits.
On Wednesday evening, at the annual awards banquet following the International Wine and Spirits Competition (IWSP), Gusbourne received two of the most esteemed trophies, the “Best Bottle Fermented Sparkling Wine,” which speaks well of its product, and the “English Wine Producer of the Year,” which, in turn, speaks well of its operations. I can hardly think of better reasons upon which to rest investor confidence.
You might object that, once this current vintage has been consumed, the next year(s) could be significantly different. I would argue that those who got on board in time should stay on the train as far as the train will take them. Things have been looking very well for Gusbourne since its recent acquisition by Shellproof and relisting on AIM, when it raised nearly £3 million to expand operations by planting an additional 100 acres of vineyards and expand their production facilities.
According to CEO Ben Walgate, “We are in the fortunate position that there is such demand for our stock that we keep running out.” Of course, by stock, he means wine, not shares. I’d say that the fortunate thing is that they are now able to plant and soon harvest an additional 100 acres. Demand exceeding supply is a good thing, except for a continuing inability to increase supply to meet demand. Most companies are out beating the bushes to drum up much needed sales. Gusbourne is out tilling the soil so that it raise enough grapes to quench their customers’ thirst.
Walgate, referring to the acquisition, said something that ought not to be readily dismissed. “This is a merger of interests and of passion.” When you consider the additional interest and passion of wine connoisseurs, he said much more than he thought he had.
