Itasca Wines - Penn Croft Vineyards and Winery - An exciting investment opportunity in a vineyards and winery operation - Itasca Wines LTD
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Penn Croft Vineyards and Winery
PRESENTING
Itasca Wines
An exciting investment opportunity
in a vineyards and winery operation
1
Itasca Wines IM 09 October 2020 v 21.1
Turning this ...
...into this.
2 3
Welcome to this revised Itasca Wines
Investment Memorandum. .
Why are we issuing a revised 2nd edition Investment Memorandum?
Itasca Wines has identified a further range of commercial opportunities
which are expected to make the venture even more successful than originally
anticipated.
There are approximately 760 vineyards in the UK according to the wine industry body
“Wine GB” – (https://www.winegb.co.uk ) - the national organisation for grape growers and
winemakers - with numbers having increased by 75% over the past 5 years.
There are however only about 100 wineries and most are already operating at full capacity
due to the bumper harvests of recent years. Originally, the Itasca Winery was only going to PRESENTING…
Itasca Wines
produce our own wines (under the “Penn Croft Vineyards” label), but we have now decided
to increase the size of the winery and, in addition, offer contract winemaking services to
vineyards with no winery of their own.
Our 'Vine to Bottle' service will offer full pressing and processing, bottling, riddling, A Vineyard and Winery Operation
disgorging, labelling and packaging. This will allow the company to generate revenues An exciting opportunity to be part owner of a vineyards
in 2020 and become profitable by 2021, making 500,000 bottles of wine per year under and winemaking operation, based in Hampshire, which
contract by 2023. is being fully funded by private subscription.
Investor Guide
Being able to offer storage facilities will also generate significant revenues. Itasca Wines This Investor Guide is a Financial Promotion Pursuant
will incorporate a new temperature controlled storage facility within the winery. The to the Financial Services Markets Act 2000 and should
production of Sparkling wines is a 2-year process and fermentation takes place inside the be regarded as Itasca Wines Limited Information
bottle. Disgorging equipment will remove the yeast sediment and then top up the bottles Memorandum.
before the cork and wire restraints are added, prior to labelling and boxing. Whilst these Your attention is drawn to the important risk warning
processes require a very expensive line of automated machinery, being able to offer them contained therein.
as part of our service is extremely lucrative. Itasca Wines are already negotiating disgorging
and storage contracts with many independent wineries.
As part of the winery expansion, a “Cellar Door” (tasting room), a café and a restaurant
will be built alongside the winery. Wine tours, lectures, and tasting evenings are all
planned as part of this exciting expansion. Our first vineyard was planted in May 2019
and another 5 hectares of vines will be planted in May 2021. The views from the planned
restaurant will look out over these new vines. The future looks bright – why not join us
on our journey and become a Investor in Itasca Wines.
4 5
Information
Memorandum
2020/2021
The content of this Information Memorandum has not been approved by an
authorised person within the meaning of the Financial Services and Markets
Contents
Act 2000. Reliance on this document for the purposes of engaging in any
investment activity may expose an individual to a significant risk of losing all
of the property or other assets invested. If you are in doubt about the investment
to which this document relates, you should consult an authorised person
specialising in advising on investments of this kind.
Itasca Wines Limited
A Vineyards and Winery operation
INFORMATION MEMORANDUM IN RELATION TO AN OFFER FOR 8 Important Information 40 Procedure for Application
SUBSCRIPTION FOR SHARES IN THE COMPANY. 16 Conservation Agriculture 42 Appendix
Important Notice 22 The UK Wine Boom 46 "A" Class Share Application
This Information Memorandum is issued to interested parties for the purposes of 26 Principal Terms of Offer Form
the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005.
27 Terms of Investment 47 "B" Class Share Application
Form
28 Investor Benefits
48 Self Certification Forms
30 Advisors and Principals
30 The Business
31 Definitions
31 Conflicts of Interest
32 Risks
32 Risk Factors
34 Risk Management
35 Exit Strategy
6 7
Important Information
This document which has been prepared by could result in a violation of the law of such
Itasca Wines Limited (“the Company”) has not jurisdictions.
been approved for the purposes of section 21 This IM shall remain the property of the Company,
of the Financial Services and Markets Act 2000 which reserves the right to require that the
(“FSMA”). The document comprises an information Recipient promptly return or delete all materials
memorandum (“IM”) which has been prepared in received from the Company, any copies made
connection with a proposed subscription of shares thereof and any notes or analyses derived there
in the Company. from.
No shares in the Company are being offered to This IM is for illustration and discussion purposes
the public for the purposes of the Prospectus only and is not intended to be, nor should it be
Regulations 2005 and no application has been construed as, financial, legal, tax or investment
or will be made for the admission of any of the advice. Potential investors should take independent
Company’s shares to the official list of the UK financial, legal, tax and investment advice.
Listing Authority, to trading on the AIM or to No representation or warranty is made by
trading on any other recognised investment the Company as to the accuracy, reliability or
exchange. completeness of the information, opinions or
This IM is confidential and intended only for the representations contained herein. Except where
person to whom it has been delivered (each a imposed by the operation of applicable law or
Recipient”). Except where required by the operation regulation, the Company, and any officer, member,
of applicable law or regulation, or in respect of a agent, employee or advisor of the Company shall
Recipient’s professional advisers who are subject not be liable for any loss or damage suffered by any
to confidentiality requirements equivalent to those person who has relied upon this IM.
detailed herein, under no circumstances may a As the Company is not regulated by the Financial
copy of this IM be shown, copied, transmitted or Conduct Authority of the United Kingdom,
otherwise provided to any person other than the investors may not complain to the Financial
Recipient. Conduct Authority, nor have the benefit of the
The distribution of this IM in certain jurisdictions Financial Services Compensation Scheme,
may be restricted by law and therefore persons the Financial Ombudsman Scheme or other
into whose possession this document comes protections afforded by FSMA and any rules and
should inform themselves about and observe regulations made thereunder, including those
any such restrictions. Any such distribution made for the protection of retail clients.
8 9
Welcome to Itasca Wines Bacchus. The yield from our vines will be relatively small in the early years and we anticipate
that the vineyard will take 5-6 years to produce grapes of high enough quality to be turned
into excellent wine
There is nothing quite like sharing a chilled bottle of white wine, or a velvety soft red, with
friends on a lazy Sunday afternoon – either at home or at your favourite restaurant – and Buying In Grapes
especially so if the wine being enjoyed comes from the Hampshire vineyard which you have
supported and now partly own! The winery build will be open for 2020 harvest in October and Phase I completed by January
2021 and as soon as construction is complete, we will buy in enough grapes from existing
Ben was the Head Winemaker at Oxney Organic Estate in West Sussex for the last five working vineyards, both here and abroad, to produce our initial tranche of wine per year.
years, before joining Itasca Wines in May 2020. Ben has been consistently producing Using these grapes our winemakers will be able to start producing and selling wines made
many stunning and award-winning organic wines. Ben has 14 vintages under his belt under the “Penn Croft Vineyards” label, still wines as early as Christmas 2022 with sparkling a
and has worked in wineries across the globe from New Zealand, Western Australia, year later in 2022.
Tasmania, Canada, The Alsace and Châteaune
uf-du-Pape. Product Mix
Sustainable Farming Sparkling wines take at least two years to develop and will eventually be our core product.
Simon Porter has been working at Penn Croft Farm for over 40 years. The farm is owned by However, we will produce a still white and a still red before then, which will be ready for sale
his wife’s family who, like his own, have been farming in Crondall for several generations. in 2021. Our first sparkling wines will then be available in 2023.
He farms Penn Croft with great empathy with the countryside, nature and especially the soil.
He is convinced that industrial style broad-acre farming is not sustainable in the long-term Contract Winemaking Services
and believes that we need to return to a far more viable type of farming. Therefore, Simon There are many more vineyards in the UK than wineries and this provides tremendous
embraced Conservation Agriculture (CA) several years ago, which improves the health of the opportunity for Itasca Wines. The winery is large enough to produce our own wines and also
soil at Penn Croft by minimising the disruption to the soil-structure and increasing carbon make wine for other producers. It will be equipped with the latest state of the art winemaking
storage in the earth. and cold-storage equipment and allow us to offer a 'Vine to Bottle' service commencing in
Q4 2020. In 2021, we expect to make 150,000 bottles under contract, rising to almost 500,000
Simon is committed to improving the land in readiness for future generations at Penn Croft, by the end of 2023. The winery will also house a Cellar Door, a tasting room and eventually
and he has been waiting patiently for the perfect partner with whom to develop a vineyard. a restaurant and will allow us to generate significant revenues even before our own wine is
Our team of winemaking experts and distributors will adhere to his high standards and ready.
Principals. The recently planted new vines now growing on the beautiful slopes of Penn
Croft has generated plenty of local excitement, as anticipation grows for the farm to join the Long-Term Investment
company of very successful vineyards growing across Hampshire.
Investing in a new vineyard is often seen as purely a lifestyle investment. Often Investors in
Symbiotic Marketing Opportunity vineyards receive nothing more than discounted wines and visits to the vineyard. At Itasca
Wines, however, the investment opportunity has been structured to deliver high levels of
The Penn Croft brand and wines will benefit from gaining exposure to a global TV audience. income through distribution of profits in the form of dividends. We expect our first income
Itasca Films Ltd are using their film-making expertise to chart the journey through each streams in 2020 and to become profitable in 2021 allowing us to commence paying annual
stage of development - capturing the transformation of the once barley fields into thriving dividends of around 20% from 2023 onwards.
and sustainable vineyards.
Enjoying the Fruits of Our Labours
The preparation of the land, the building of the winery and the nurturing of the vines
are being fully documented and once the vineyard is fully operational, viewers can learn Itasca Wines is making a long-term commitment to economic growth in the region through
about the different stages of wine production, including the pressing of the grapes, the job creation and the adoption of sustainable and environmentally-friendly farming
fermentation process and the bottling, marketing and labelling processes. This documentary- methodology.
style programme will be sold globally, creating strong brand awareness and stronger demand
for our wines. Investors can enjoy a whole host of benefits by supporting this venture. Join us at harvest
time and help bring in the grapes, come to vineyard tours and winemaking classes... or
Planting the Vineyards simply sit back and enjoy the crisp taste of the wines we send you.
Hampshire soil is already producing award-winning wines! In May 2019 we planted 9.800
We hope that you agree that this opportunity is attractive to both professional investors and
vines that thrive in English weather including Chardonnay, Pinot Noir, Pinot Meunier, and
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The story so far.
In May 2019 we planted our first vineyard of 5 hectares here at Penn Croft Vineyards / Farm.
It was planted by hand to preserve the Conservation Agricultural principles adopted at the
farm over the last 18 years and we are delighted with the results. Vine-care Limited were
wine lovers alike. contracted to plant the vines and have been astonished at the rates of growth achieved. We
believe this is due to our soil quality - time will tell when in 2022 we should be harvesting our
Welcome to Itasca Wines and Penn Croft Vineyards. first crop of grapes.
The Uncertainties
Planted with Chardonnay, Pinot Meunier, Pinot Noir and Bacchus, we are delighted to report
Winemaking is traditionally a family business inherited from generation to generation an almost 100% taking with very few vines not having grown substantially. Now, as the days
and the biggest names in the industry have become dynasties. Similarly, investment into a grow shorter and Autumn settles in, our vine leaves are changing to a glorious red and gold
vineyard and winery should be considered a legacy to be enjoyed and passed-down over the colour and will soon drop off. We are all excited and looking forward to seeing them shooting
years. up again next spring.
Winemaking is a lengthy process that cannot be accelerated and our own grapes will take Our winter cover crop has sprung up and will hold the soils together and we hope for a
5-6 years to grow. The demand for UK wines is rising but future demand can only ever be a largely frost free winter. Over the next few months we will set our restraining posts and wires
projection and so the venture carries risk. Whilst demand for UK wine is growing, especially and come spring the vines will start to wind around them, giving the vineyard a whole new
for sparkling wines, the market is competitive and demanding. look.
Itasca Wines Limited will marry their own experience with the hands-on sales experience We plan to plant our second vineyard in May 2021, and we will keep all our
of David Thomas of Bordeaux Index, one of the world’s leading wholesale investors updated along with a revised and updated Investment
wine exchanges. His involvement will allow us to market to leading Memorandum. In the meantime, we hope you better
restaurants, clubs and supermarkets as volumes permit. understand our vision and business model
and are confident to take a leap of faith
Wines are synonymous with their region, and invest with us!
often reflecting the character of the local
people and traditions. We hope that
you share our vision to bring
sustainable long-term growth
and winemaking back to
this part of Hampshire
for the first time since
the Romans brought
it here almost two
thousand years
ago.
.
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Conservation Agriculture Natural Cover
Another key component of CA is the
products on our fields as the soil increases its
natural health. CA works with the life within
the soil rather than ignoring it at our peril.
application of natural ground cover using
Penn Croft Farm provides fields of Reducing Soil Disturbance both compost and growing plants. Did you
This is a better way forward for our planet
naturally-rich soil, ideal for the growth of while still feeding the world.
Every time the soil is disturbed using a know that there are more living organisms
grapes for winemaking. This is because
plough or a cultivator, carbon is released in the soil than above the soil? To ensure
of an innovative type of farming called
back into the atmosphere by exposing the that these organisms are fed, we will not
Conservation Agriculture (CA), which has
bare soil and humus. This is not something leave the ground bare for more than 3
been implemented there for several years.
that is helpful to our planet. Cultivations also weeks. The sugars provided by plants will
destroy invertebrates, bacteria and fungi that feed the bacteria and fungi and thereby
CA is principally concerned with building
are living in the soil and feeding on the roots increase their role in enriching the soil and
carbon in the soils. Plants absorb carbon
and decaying matter. providing natural fertilisers. Of course, the
from the atmosphere through photosynthesis
and convert it into carbohydrates and sugars roots of these plants will also aid the natural
Most importantly, we are destroying our fracturing of soil by penetrating down
which are deposited back into the earth.
precious earthworms. Earthworms are through all soil types to a depth of often 2
These plants eventually die and decay and
incredibly valuable to the farmer. It is meters or more. Each root, and we can only
their organic matter builds the humus of
estimated that in good soil there may be up see 50% of roots with the naked eye, will drag
the soil. Carbon storage is a vital ecosystem
to 1,750,000 earthworms per acre! These carbon down into the soil, thus helping with
service and how we treat the soil dictates the
earthworms eat the old crop residue and our carbon sequestration
efficacy of this process.
soil, which produce worm casts that are
hugely fertile. These worms ‘plough’ their Plants grown after the harvest of a
CA encourages carbon storage through three
way through the soil, opening up fractures commercial crop and before the planting
main ways:
in the soil by their tunneling which allow of the next are called ‘Cover Crops’ (CC).
drainage and better root penetration. This all We can choose which sort of species to use
1. Minimum soil disturbance. produces healthier soil and therefore more depending on whether we need deep roots,
2. Providing natural cover for the bacteria and fungi to help with better plant or legumes to provide natural fertiliser
life. It becomes an increasing cycle of life. As or leafy plants to provide a rich humus to
soil at all times.
a result, the soil will naturally fracture and be drawn into the soil by the earthworms.
3. Using diversity of cropping and remain well-structured. This humus going back into the soil is what
including animals if possible. makes a heavy clay soil or a thin chalky
However, a cultivator will separate soil soil become more fertile and usable. If we
particles according to size and allow the have access to natural compost or manure
small particles to be washed down through then we can add this to the soil to add to the
the soil profile, thus creating sediments developing fertility. The CC will also scavenge
and layers of impenetrable soil. As well as for underutilised fertilisers and prevent
releasing carbon, cultivating also speeds the them from being washed out of the soil into
journey of fertiliser and silt through the soil rivers and streams. As these CC decay, these
profile, thereby increasing pollution. fertilisers are released back into the newly
CA uses machinery to place seeds into growing commercial crop.
this naturally-prepared earth without
having to resort to damaging the soil and CA also uses more benign inorganic
its inhabitants. This requires less tractor fertilisers and crop protection products
horsepower and therefore less diesel. that does not damage the life of the soil. At
Penn Croft, we are already finding that we
can reduce the total amount of inorganic
16 17
Ben was the Head Winemaker at Oxney Organic Estate
in West Sussex for the last five years, before joining
Itasca Wines in May 2020. Ben has been consistently
producing many stunning and award-winning
organic wines. Ben has 14 vintages under his belt and
has worked in wineries across the globe from New
Zealand, Western Australia, Tasmania, Canada, The
Alsace and Châteauneuf-du-Pape.
In 2015 Ben returned to make wine in England. Five
PRODUCER AND DIRECTOR
years later he has won numerous domestic and
Malcolm Walker
international awards plus accolades for still and HEAD WINE-MAKER
sparkling wines. This includes a Gold Medal and 95
Malcolm started working in the film and
points in the world’s biggest wine competition, the
Ben Smith
television industry in 1976 straight from
International Wine Challenge 2020, one of only two
school. Over the last 39 years, he has worked
wines to do so. Passionate that great wine begins
on some of the biggest block busting films
in the vineyard, Ben believes firmly that his goal
including Star Wars and Alien. He was one
as winemaker is to harness that potential to make
of the UK's leading location managers for
world class wines.
15 years before moving into directing and
producing. As a director, he has directed some
of UK's top TV series for both the BBC and
ITV. Malcolm directed and produced Cellar
Rats, a wine TV series, which has led him into ASSISTANT WINE-MAKER
developing Penn Croft Vineyards and Winery. Sarina McNamara
THE TEAM
FARMER AND LANDOWNER
Simon Porter
Simon Porter has been working at Penn
Croft Farm for over 40 years and has been
the key decision maker for much of that FINANCIAL DIRECTOR BUSINESS DEVELOPMENT
time. The land is owned by his wife’s family Alex Redmond John Wilkins
who, like Simon’s family, have been farming HEAD BUSINESS OPERATIONS
in Crondall for several generations. Suzie Wiesmann
In the last few years, Simon has been
farming Penn Croft with a greater sympathy
for the countryside, nature and especially
the soil by embracing Conservation
Agriculture for the next generation. Mr
Porter has nephews who will continue to
work with this philosophy.
ADMINISTRATION/‘DIPWSET TECHNOLOGY
STUDENT’ Tony Gallagher
18 19Penn Croft's CA practices will supply the new
Vineyard with superb soil in which to plant
Diversity of Species our vines and thereby give them the best
possible start. However, we will continue to
There is another word that our fathers and grow these vines along CA principles, which
grandfathers used to use for this activity. That will allow us to produce the best wine by
word is rotations. CA will not encourage the naturally increasing fertility, improving carbon
continual growing of the same one or two storage and encouraging natural predators.
species in a field year after year. It is not about This vineyard could well be unique in the
choosing only the most profitable crops and UK for using such methods. We invite you to
growing them time and time again until the become a part of this modern, sustainable
soil is exhausted. CA will use as many species grape production.
as possible spread over as many years as
possible. Yes, the crops need to be viable but
findings prove that the soil likes a diversity
of species growing in it. This may be several
species of cover crops grown altogether in the
same field or a rotation of species in one field
year on year. These can include a selection of
cereals followed by legumes and then brassicas
or pulses. Using different varieties of the same
species is another way of increasing diversity.
We grow several varieties of wheat together
in the same field and all are chosen for their
unique and individual resistance to different
diseases. This provides a cumulative effect on
natural disease control.
CA will also make use of what we call
‘Companion Cropping’. This uses different
species to grow alongside each other in close
proximity so that they can mutually support
one another in preventing disease, insect
infestation and weeds. Once again, this is
about using natural methods to control
these challenges that threaten healthy food
production.
20 21The UK Wine Boom
Mid-September heralds the beginning of the grape harvest for the UK’s 760 vineyards and it looks
set to be an exceptional vintage this year, despite the extreme weather which has left arable crops
devastated.
These same weather conditions have proved perfect for vines, which is good news for the UK wine
industry — one of the fast-growing sectors of the economy. About 3.2 million vines were planted
in 2019. The area under vine — amount of land planted with grapes — has quadrupled since 2000
and grown 150 per cent over the past decade, to 3,500 hectares. Savills predicts this will increase by
a further 93 to 116 per cent by 2024.
About 5.5 million bottles of UK wine were sold in 2019, up 70 per cent on the previous year, with
overseas sales more than doubling, according to WineGB, the national association for the wine
industry. England is one of the ultimate cool-climate regions, like Oregon, and like Champagne
once was, The degree shift in global temperatures means that growing conditions across the
southeast are much like those in the Champagne region 40 years ago, which is why the famed
French producers, such as Taittinger and Pommery, have invested in UK Land.
The success of British brands such as Chapel Down and Nyetimber have helped to cement the
reputation of English sparkling wine; the former has supplied bubbles to royal weddings and 10
Downing Street. Their success is also tempting more of us to consider growing our own.
It usually takes about 18 months of planning and preparation to establish a vineyard and you
will get your first proper crop four years later. If you are making still wine, you will usually have
something ready to sell about six months after harvest; for sparkling, two years after harvest. UK
vineyards have a typical life of about 25 years.
Chardonnay and pinot noir are by far the most-planted varieties, predominantly because they are
the main grapes in sparkling wine, which made up 72 per cent of Britain’s production last year.
Online sales of wine boomed during lockdown and a silver lining to the Covid-19 cloud has been
that people around the country have been keener than ever to support local producers, with
vineyards across the UK enjoying a sales surge, despite orders to wholesalers and retailers grinding
to a halt, wine tastings being put on hold, and bars and restaurants closing.
“Every event was cancelled; export markets cancelled or significantly reduced their orders,” says
Jonica Fox, estate owner of Fox & Fox, a family-owned East Sussex vineyard. “We realised early on
that the internet was the thing that was going to make or break us, and we did so much better than
we thought we’d do.”
These developments suggest that now is the time to invest in English vineyards. There are around
760 vineyards of over an acre in size planted in the UK, but only around 100 wineries to process
all their grapes. Itasca Wines planted 5 hectares (12.4 acres) of vines in May 2019, and construction
of phase I of our own winery will be completed by Q1 2021. England is undergoing a viticulture
renaissance, producing wine at a rate not seen since the Middle Ages. In the last 5 years, there has
been a 75% increase in the number of UK vineyards. We aim to quickly become a major winemaker
and create award-winning wines at Penn Croft - we invite you to join us on this exciting journey.
22 23Financial and Corporate Breakdown Financial Forecasts
Wine Production Breakdown Of Raise Amount
- Breakdown of Raise Amount Subscriptions of £26,000 or more will receive £ 000s End 2020 End 2021 End 2022 End 2023 End 2024 End 2025
"A" shares otherwise "B" shares will be issued. Revenues £232 £1,337 £2,093 £4,606 £4,788 £4,900
"A" shares carry voting rights whilst "B"
Direct Costs £0 -£138 -£138 -£785 -£785 --£785
share do not. Both carry the same equity
Cost Of Grapes - Itasca Branded Overheads -£910 -£995 -£1061 -£1,333 -£1,408 -£1,454
£42,300 participation of 0.042% per share`
Wines 2021
EBITDA -£679 £204 £894 £2,488 £2,595 £2,661
Winemaking Costs - Itasca Branded
£55,080 Winery Capacity
Wines 2021 Tax -£80 -£473 -£493 -£506
Capacity 90,000 bottles per year of Itasca Wine
Duty 2021 £40,140 plus Contract Winemaking Services of 150,000 Distributable Profit £340 £2,015 £2,102 £2,155
bottles per year, in 2021 rising to almost Dividends (50% Distributed) -£170 -£1,008 -£1,051 -£1,078
Winery Gas/Dry Goods 2020 £7,866
500,000 bottles by 2023 Dividend Per Share £ £72 £428 £446 £457
Winery Gas/Dry Goods 2021 £64,239
Yield at £2,000 Share £ 3.61% 21.38% 22.30% 22.86%
Cap/Cork @ Sparkling 2020 £12,806 Dividend Policy Retained Earnings (Cash on BS) £170 £1,008 £1,051 £1,078
Cap/Cork @ Sparkling 2021 £104,586 To Distribute 50% of the Profit as Dividends Cum RE after dividends £170 £1,178 £2,229 £3.306
Maintenance Non Staff 2020 £7,000 To Retain 50% of the Profit for Expansion Cumulative P&L -£679 -£475 £420 £2,908 £5,503 £8,164
Maintenance Non Staff 2021 £7,000 First Dividend Payable 30 April 2023
Loan Repayment on Winery
£23,100 Corporate Structure
Equipment 2020
Loan Repayment on Winery
• 2020: Development Phase, Loss Making.
£92,400 Number of A Shares in Issue 1,000 • 2021: Profit £204,017, No dividend payable
Equipment 2021
• 2022: Profit £894,246, dividend 3.61% payable
Rent on Vineyard/Winery 2020 £23,450 Number of B Shares in Issue 436
• 2023: Profit £2,487, 977, dividend 21.38%
Rent on Vineyard/Winery 2021 £93,800 Total Shares 1,436 • 2024: Profit £2,595,119, dividend 22.3%
Temporary Staff 2021 £32,868
• The winery will have the capacity to produce 500,000 bottles per year:
Winery/Vineyard Staff 2020 £36,250 100,000 Still Wines
Number of Shares Offered 921 400,000 Sparkling
Winery/Vineyard Staff 2021 £145,000
Cost Per Share £2,000
Operational Costs 2020 £350,000 • Revenues :
Total Shares in issue Post Raise 2,357 Still Wines - 2021+
Operational Costs 2021 £205,300
Sparkling Wines - 2023+
Marketing/Branding/Distribution
£450,000
2020
Marketing/Branding/Distribution Each Share Represents 0.042% Dividend Strategy
£250,000
2021 Shareholders are part owners in the company and receive annual dividends from profits. 50%
Total Costs 2020/2021 £2,043,185
Equity of the Business of net profits will be distributed as dividends commencing 2023
Expected Dividends of just over 20% per year from 2023.
Additional Cashflow (Balance
£234,815
Sheet)
Subtotal: £2,278,000 Amount Being Raised £2,278,000
24 25Principal Terms of Offer Terms of Investment
Offer for subscription of up to 921 "A" or “B” Ordinary Shares of £1
at £2,000 each, including a premium of £1,999.00 payable in full on 1. Fundraising under the Offer 4. Details of the Offer
application. "A" shares carry the same equity participation as "B" shares A maximum of £2,278,000 is to be raised Up to 921 Ordinary Shares are being
but also carry voting rights. ( "A" shares are only issued for subscription to fund the development of the winery offered at a price of £2,000 per share,
tranches of £26,000 or more.) and vineyards and ongoing operational payable in full upon application.
costs. Applications must be for a minimum
Offer of one “B” Ordinary Share or thirteen
Price The Directors may seek to raise additional "A" Ordinary Shares. The Offer opened
per "A" or “B” Ordinary Share £2,000 finance to complete the project. at 10am on Monday 4th November
2019. The closing date is 5pm Friday 1st
Maximum number Shares being issued under this offer 921 2. Participation in Dividends & Capital January 2021. The Offer may be extended
Number of Ordinary shares in issue following the offer 2,357 Distributions by the Directors.
Gross proceeds of offer assuming full subscription: £2,278,000
Minimum Subscription per Investor of 1 (one) “B” share: £2,000 2.1 Details of the dividend policy of the 5. Reporting to Investors
Minimum Subscription per Investor of 13 (thirteen) “A” share: £26,000 Company appear in various sections of The Company will issue an annual report
this IM. to each Investor, informing them of
KEY DATES progress and the financial position of the
Offer Opens 10am Monday 4th November 2019 2.2 The rights of Investors to Company. The accounting reference date
Offer Closes 5pm Friday 1st January 2021 participate in income and capital of the Company is 31st December each
distributions are set out in the Article year. The Directors intend to produce
Issue of Shares under the offer is normally within 2 weeks. of association of the company. occasional informal bulletins informing
investors of progress.
INVESTMENT SUMMARY 3. Realisation of Investment
Maximum offer Size: £1,842,000 After three years, the Company is forecast 6. Management Incentives
Minimum Subscription: £2,000 to be profitable and these profits will be There are currently no management
Closing Date: 5pm Friday 1st January 2021 distributed as per the details of the dividend incentives that have been offered, since
Targeted Return by dividend distribution (see finance pages) policy 2.1. It is the intention of the Company they are not considered necessary as
Initial Charge: Nil to distribute 50% of the profits as dividend management already hold A Shares.
Annual Management Nil and retain 50% for expansion, targeting a
yield of 15-20% per annum for investors.
ADVISER CHARGE
Advisor charges are to be agreed between intermediates and their financial
intermediaries up front.
The closing date may be brought forward if the fund is fully subscribed or extended to a later date in each case at the company’s discretion.
This targeted return is not a reliable indicator of future performance.
Please see full details and examples in this Information Memorandum.
26 27Investor Benefits
We are also expecting to be able to offer our Investors a discount when they purchase wine
from our partner Caviste (www.caviste.co.uk). We anticipate discount levels to be around
10%, across their range of products and services.
Bronze Membership
For investment £6,000 to £24,000 The proposed events at the winery are wine tasting evenings, winemaking courses, summer
• A single use voucher which entitles the Investor to a 10% discount on the barbecues and classical music evenings to name but a few. These are expected to come online
retail price of wines purchased, up to an order value of £10.000 in 2022 and will allow fellow Investors to meet and socialise together and help them to feel
• A gift box containing 6 bottles to be sent out at Christmas - 2 Sparkling fully integrated into the business.
wines, 2 Still White wines and 2 Still Red wines
• A 10% discount on tickets for wine tasting/winemaking/other events
held at the winery
• A 10% discount on food and drink purchased in the winery restaurant
Silver Membership
For investment £25,000 to £49,000
• A membership card which entitles the Investor to a 25% discount on the
retail price of wines purchased, up to an order value of £10.000
• A gift box containing 12 bottles to be sent out at Christmas - 4 Sparkling
wines, 4 Still White wines and 4 Still Red wines
• A 25% discount on tickets for wine tasting/winemaking/other events
held at the winery
• A 25% discount on food and drink purchased in the winery restaurant
Gold Membership
For investment £50,000 to £99,000
• A membership card which entitles the Investor to a 33% discount on the
retail price of wines purchased, up to an order value of £10.000
• A gift box containing 18 bottles to be sent out at Christmas - 6 Sparkling
wines, 6 Still White wines and 6 Still Red wines
• 2 free tickets and a further 33% discount on tickets for wine tasting/
winemaking/other events held at the winery
• A 33% discount on food and drink purchased in the winery restaurant
Platinum Membership
For investment £100,000+
• A membership card which entitles the Investor to a 50% discount on the
retail price of wines purchased, up to an order value of £10.000
• A gift box containing 36 bottles to be sent out at Christmas - 12 Sparkling
wines, 12 Still White wines and 12 Still Red wines
• 4 free tickets and a further 50% discount on tickets for wine tasting/
winemaking/other events held at the winery
• A 50% discount on food and drink purchased in the winery restaurant
28 29Advisors and Principals Definitions
“HMRC”: HM Revenue & Customs.
“IM”: this Information Memorandum.
“Investors”: subscribers for A or B
Solicitors "B Shares": B Shares enjoy the same Shares under the Offer.
LACEYS SOLICITORS equity participation as "A" Shares, but
5 Poole Road, Bournemouth BH2 5QL carry no voting rights. “Maximum Total Subscription”:
£2,278,000 (before expenses), which is the
Accountants “Business”: the business of maximum amount which must be raised
ARTISAN ACCOUNTS manufacturing and marketing wine. by the issue of Shares under this Offer.
Unit 2 Sheen Stables, Rear of 119 Sheen Lane, East Sheen London SW14 8AE
“Company”: Itasca Wines Limited, “Minimum Subscription” £2,000 (before
Administration and Operations a company registered in England expenses) which is the minimum amount
ITASCA WINES LIMITED and Wales under company number which an investor may subscribe for under
Studio 5, The Old Kiln, Penn Croft Farm, Itchel Lane, Crondall, Hampshire GU10 5PX 11161848 trading from Studio 5, The this Offer.
Old Kiln, Penn Croft Farm, Crondall,
Bankers Hampshire, GU10 5PX, and whose “Minimum Total Subscription” £422,000
COUTTS & CO Registered Office is Studio 5, The Old (before expenses) which is the minimum
Coutts & Co, 440 Strand, London WC2R 0QS Kiln, Penn Croft Farm, Itchel Lane, amount which must be raised by the issue
Account Name: ITASCA WINES LIMITED Crondall, Hampshire GU10 5PX. of A or B Shares under this Offer.
Financial Advisors “Directors”: the directors of the “Offer” the offer is to subscribe for up to
BODINNICK CONSULTANCY PARTNERS LIMITED Company, are (at the publication of this 921 A or B Shares in the Company as set
2 Gallery Court, 1-7 Pilgrimage Street, London, England, SE11 4LL document) Malcolm Walker and Simon out in more detail in this IM.
Porter.
The Business
“Solicitors to the Offer” LACEYS
“FSMA Order”: the Financial Services SOLICITORS.
and Markets Act 2000 (Financial
Promotions) Order 2005.
The business of the Company is to produce and market fine English wines through Itasca “Gross Receipts”: the aggregate
Wines Limited trading as "Penn Croft Vineyards and Winery". Penn Croft Farms is to be an sums, exclusive of VAT, received by
Investor in Itasca Wines Limited. the Company from the lease, licence,
exhibition and commercial exploitation
The Company is leveraging land buildings and equipment owned by Penn Croft Farms. Itasca of the Products.
Wines has leased both the land for the vineyard and an old barn that has been converted into
Conflicts of Interest
the winery. Plans are in place for our own “Cellar Door”, where the public can taste the wines
and purchase them, along with Penn Croft honey and local cheeses, nuts and fruits.
The Company will leverage a product placement opportunity, by having the various
stages of the winemaking operation, from vineyard planting, through winery setup to Any one or more of the Directors may be involved in the Company in other capacities and
sales and marketing to be filmed for the Cellar Rats TV series. This will grow the brand shall not be obliged to account to the Company or its Investors for any payments of fees
and overtime, increase revenues. received in such other capacities.
30 31Risks 4 Changes in government or government
policy or duty could affect the return on
any investment in the Company.
10 The Company has not been
structured to generate immediate gains
and Investors will need to be prepared
An investment in Shares (as defined on the previous page) involves investment risk. to take a medium term view of an
Risks associated with the Shares are set out in the Risk Factors below. investment. Prospective Investors should
5 Any finance, pre-sales and other be aware that it is not the Directors’
Nothing in this document shall be construed as the giving of investment advice by the revenues payable subject to delivery will intention to place the shares on any
Company or any other person. If you are in any doubt as to whether to invest in the be reliant on completion and delivery recognised investment exchange or stock
shares described herein, you should consult an independent financial advisor who is of the product satisfying the terms of market. Investment in unquoted shares
qualified to advise on investments of this nature. contracts with the relevant distributors, carries higher risks than investment
wholesalers or retailers. in quoted shares and may be difficult
The Financial Forecasts section in this IM is purely speculative, but based on research to realise and proper information for
and discussions with experienced chartered accountants, and is believed to be
achievable by the Directors of the Company and its advisors. 6 Revenues from the international
determining their current value may not
be available.
sale of the products are normally
denominated in local currency, therefore
subject to currency risk, although the 11 The value of the Ordinary Shares
Company may purchase foreign currency may go down as well as up. Accordingly,
Risk Factors 1 The Company has a small
management team and the loss of a key
individual could affect the Company’s
options to provide a degree of protection
against this risk.
a Investor may realise less than their
original investment.
The opportunity described in this IM may not
be suitable for all recipients of this document.
business.
7 Agreements may contain “force 12 Investing in wine is considered a
majeure” clauses, which may enable the
Before making an investment decision, high-risk and very long term investment.
2 The Company will be operating relevant party to terminate or suspend
Whilst wineries can and do make profits
in a competitive industry where the the agreement in certain circumstances,
prospective Investors are strongly recommended when properly planned, efficiently and
commercial risks are high. Consumer which are outside the control of the
to consult their investment adviser who should economically managed and with well-
demand, Wine critic’s reviews and public parties.
be authorised under the Financial Services marketed products, there is no guarantee
and Markets Act 2000 and who specialises in taste cannot be predicted with certainty. that the business will be a commercial
investments of this kind. Accordingly, an investment in the
Company is speculative; Investors may
8 Leakage, contamination or theft may success.
reduce the products revenue.
A prospective Investor should consider carefully not get back the amounts of their original
whether an investment in the Company is investment and returns on investment are
suitable in light of the person’s personal not guaranteed. 9 The Company has submitted an
circumstances and the financial resources application to HMRC for EIS approval.
However, neither the Company, the
available to that person.
3 The Company may, due to unforeseen Directors, nor the Company’s advisers
events or unexpected circumstances,
Although all reasonable steps will be taken to give any warranties or Undertakings
require further funds to commence
mitigate risks, the wine industry can be risky that EIS Relief will be granted. However,
or complete the production or the
and slow to mature and there is no certainty that if granted, all investors will be able to
distribution and marketing of the wine
Investors will get back the amount they have claim tax relief retrospectively, subject
products in addition to any funding
contributed. to being a UK tax payer.
already raised. Failure to raise any such
additional funds may adversely affect the
The principal risk factors in the Company and the
Company’s revenues.
series sector considered as relevant are:
32 33Risk Management Exit Strategy
Vineyard risks are pretty much the same as farming risks, and in Simon Porter we We aim to start distributing dividends by April 2023,
have an experienced and successful practitioner who manages the classic farming so the opportunity is not suitable for anyone who may
risks day to day: need to liquidate their shares before that date.
• Climate/Weather
• Equipment English Wines is a very long-term healthy sector,
• Buildings and we anticipate a very strong secondary market
• Labour in the shares, especially once revenue streams are
• Contamination established.
However, there are specific risks the winery must manage in addition to, and The first dividends are expected to be paid in 2023 and share ownership
independently of, the farming risks: has been structured to generate a substantial long-term income stream
• Winery Buildings and should be considered a medium to longer-term holding.
• Winery Equipment
• Resources such as Power and Water
• Wine Stock
• Wine Leakage
• Product Tampering / Product Recall / Crisis Management
• Crime and Cybersecurity Co-Founder
• Intellectual Property - Trademarks, Copyrights, Patents
• Media Liability
Malcolm Walker
• Dependent Properties - Bottles, Corks, Labels
• Employees - Workers Compensation and Employment Practices
However, perhaps the biggest threat is posed by commercial risks. In short, whether
you are bottling, distributing, importing or exporting, the wines and spirits sector
carries very specific risks and insurance requirements. We will be seeking specialist
knowledge of a meaningful difference to premiums, cover and claims.
• HMRC Claims of Duty
• Stolen or Missing Merchandise
• Stained Label Clauses in Cargo Contracts
In all cases we will adopt a rigorous and continuous ongoing risk management
process and strategy.
34 3536 37
38 39
the person whose account is being debited
Procedure for Application and to stamp such endorsement.
The minimum investment that Investors You must affix to the completed Money Laundering Regulations Sign and date the Application Form. If
may make is 1 share at £2,000 for either "A" Application Form cheque or bankers’ draft To ensure compliance with the Money the Application Form is signed under a
or "B"" class shares. "A" shares, which carry for the full amount payable. Laundering Regulations 2007, the Company power of attorney, such power of attorney
voting rights, are only issued with single requires verification of identity from any or a duly certified copy thereof must
subscription tranches of £26,000 or more. Your cheque or bankers’ draft person lodging an Application Form (the accompany the Application Form.
There is no conversion between share classes. must be payable to “Itasca Wines “Applicant”) and, without prejudice to the
Limited” for the amount payable on generality of the foregoing, in particular any Using the details provided on the
Individuals wishing to subscribe for Shares application and should be crossed person who either: Application Form, either send the
on the basis of this IM should complete and “A/C Payee”. No receipt will be completed Application Form together with
return the Application Form to the address as issued for this payment. All bank i) tenders payment by way of cheque or the cheque or bankers’ draft by post or
noted below. transfer charges are payable by the bankers’ draft drawn on an account in the courier to be received no later than 5pm
transferor. If the full remittance is not name a person or persons other than the Friday 1st January 2021, or scan and email
The following instructions should be read in received, the number of shares will Applicant; the completed Application Form together
conjunction with the Application Form: be correspondingly reduced. ii) or appears to be acting on behalf of some with a bank transfer to be received no later
other person. than 5pm Friday 1st January 2021.
Insert your full name, address and other The payment must be accompanied by
details in block capitals in the Application two documents for personal identification In the latter case, verification of the identity If you post your Application Form, you are
details section of the Share Application purposes: of any person on whose behalf the Applicant recommended to use first class post and to
form appears to be acting may be required. allow at least two working days for delivery.
a) The first such document must be a true Cheques and bankers’ drafts must be drawn Photostat or faxed copies of the Application
Applications may only be made by copy of the Applicant’s passport or driving in sterling on an account at a UK branch of Form will not be accepted.
persons aged 18 or over. license. a bank or building society which is either Applicants are strongly recommended to
b) The second such document must be a settlement member of the Cheque and submit applications and cheques as soon as
Insert in Section 2 in figures the number a bank, building society or credit card Credit Clearing Company Limited or the possible.
of Shares for which you are applying. statement or utility bill in the Applicant’s CHAPS Clearing Company Limited or which In the event that applications are received
name and showing the Applicant’s current has arranged for its cheques and bankers’ for an amount in excess of the maximum
Your application for A shares must residential address, which must be less than drafts to be cleared through the facilities subscription, Shares will normally be
be for a minimum of 13 A shares and three months old in each case. provided for the members of either of those allocated on a first-come first-served basis.
thereafter in 13A share increments. entities and must bear the appropriate sort The Directors’ reserve the right to accept
The above information is provided by code number in the top right hand corner. any application in part or reject any
Your application for B shares must way of guidance to reduce the likelihood Where possible, Applicants should make application in full. The relevant share
be for a minimum of 1B share and of difficulties, delays and rejection of an payment by their own cheque. If a third- certificate will be sent to you incorporating
thereafter in 1B share increments. Application Form (but without limiting the party cheque, bankers’ draft or building the details included in Section 1 of
Company’s right to require verification of society cheque is used or a cheque is signed Application Form within 30 days of the
Insert in Section 3 in figures the amount identity as indicated above). Please do not by the bank or building society and which allotment and issue of Shares under the
of your payment. send original documents but if you do they does not quote the name of the Applicant, Offer.
will be returned by post at the Applicant’s the Applicant should write their name and If you have any queries on the
Your payment of the subscription price own risk. address on the back of the draft or cheque procedure for application and payment,
may be made by electronic transfer, and, in the case of an individual, record his/ you should contact your presonal
cheque or bankers’ draft and should be Please note that if the above requirements her date of birth against their name. Investor Relationship manager or:-
for the amount which represents £2,000 are not fulfilled and suitable evidence of Please ask the bank or building society to
multiplied by the number of Ordinary identity cannot be obtained, the application endorse on the reverse of the draft or cheque Enquiries
Shares inserted in Box 2. will not be accepted. with the full name and account number of Tel: 01252 279 830
40 41Appendix
Share Application Form – Itasca Wines Limited
Terms and Conditions (which acceptance may be on the basis
1. I hereby acknowledge that the that I indemnify the Company against
acceptance and basis of allocation of the all cost, damages, losses, expenses
Shares is in the absolute discretion of the and liabilities arising out of or in
Directors and that they have reserved conjunction with the failure of my
the right to reject in whole or in part or remittance to be honoured on the first
to scale down any application including presentation);
without limitation multiple or suspected
multiple applications or any application b) I understand that any application by
considered by the Directors to have been me to invest in the Company shall be
made by a nominee. If any application deemed to be an offer up to the value of
is not accepted, or is accepted for fewer my application and that such offer shall
Shares than the number applied for be deemed to take effect on despatch by
the application moneys or the balance post with this application form; immediately in writing if I become so not for me or on my account and that
thereof (as the case may be) will be connected as defined in Section 291 of accordingly will not be responsible to
returned by sending the Applicant’s c) I confirm that I am not relying on the ICTA; me for providing protections afforded
cheque or bankers’ draft, or a crossed any information or representation in to their clients, for advising me on any
cheque in favour of the Applicant in each relation to the Company other than that h) I agree that this application form transaction described herein, or for
case by post or by hand and at the risk of contained in the Offer Document and shall be construed in accordance with ensuring that any such transaction is
the person entitled thereto to the address agree that neither the Company nor and governed by the laws of England suitable for me.
of the Applicant without interest any person responsible for the Offer and Wales.
Document or any part of it shall have 5. I agree that acceptance of an
2. In consideration of the Directors any liability for any information or 3. I hereby declare that I have read, application form will have the meaning
agreeing that they will consider and representation not so contained; understood and agreed to the terms set out in the Offer Document unless the
process applications for the Shares in and conditions contained in the Offer context requires otherwise.
accordance with the procedure referred to d) I agree that my application Document and this application form
in the Offer Document and as a separate is irrevocable, except for the including the Risk Factors in Part 2 of the
contract with the Company which will circumstances set out in Section 87q of Offer Document and have taken all the
become binding on despatch by post of FSMA (right of withdrawal); appropriate professional advice which
this application form: - I consider necessary before submitting
e) I warrant that if I have signed this my application and that I am aware of
a) I warrant that my cheque or application form on behalf of any other the special risks involved in participating
bankers’ draft will be honoured on person I have due authority to do so; in an investment of this nature, and I
first presentation and agree that if understand that my application is made
such cheque or bankers’ draft is not f ) I warrant that I am not, nor am I, upon the terms of the Offer Document
so honoured I will not be entitled to applying on behalf of a person who is and this application form.
receive a share certificate for any Shares under the age of 18;
unless and until I make payment in 4. I acknowledge that in relation to the
cleared funds for such Shares and g) I hereby warrant and declare that I transactions in the Offer Document,
such payment as accepted by the am not connected with the Company advisers of the Company mentioned
Company in its absolute discretion and I will notify the Directors therein are acting for the Company and
42 4344 45
"A" Class Share Application Form "B" Class Share Application Form
Itasca Wines Ltd Itasca Wines Ltd
Studio 6, Penn Croft Farm Studio 6, Penn Croft Farm
Itchel Lane, Crondall Itchel Lane, Crondall
Hampshire GU10 5PX Hampshire GU10 5PX
www.itascawines.com www.itascawines.com
Contact your personal investor relationship manager, Contact your personal investor relationship manager,
or Tel: 44 (0) 1252 279830, E-mail: info@itascawines.com. or Tel: 44 (0) 1252 279830, E-mail: info@itascawines.com.
Application for "A" in Itasca Wines Limited. Company Number 11161848 Application for "B" shares in Itasca Wines Limited. Company Number 11161848
"A" shares, which carry voting rights, are only issued with single subscription tranches of £26,000 or Subscriptions under £26,000 will be issued with "B" shares which have the same equity participation
more. There is no conversion between share classes. as "A" shares but do not carry voting rights. There is no conversion between share classes.
Application details section: (Please write in block capitals) Application details section: (Please write in block capitals)
I/We: ..................................................................................................................................................................................... I/We: .....................................................................................................................................................................................
Address: .............................................................................................................................................................................. Address: ..............................................................................................................................................................................
Hereby apply for No: .......................... Itasca Wines Limited at the value of £2,000 per share totalling the Hereby apply for No: .......................... Itasca Wines Limited at the value of £2,000 per share totalling the
amount of £.......................... amount of £..........................
I/We enclose a cheque for £ .......................... made payable to Itasca Wines Limited and sent I/We enclose a cheque for £ .......................... made payable to Itasca Wines Limited and sent
to the following address: to the following address:
Itasca Wines Ltd Itasca Wines Ltd
Studio 6, Penn Croft Farm Studio 6, Penn Croft Farm
Itchel Lane, Crondall Itchel Lane, Crondall
Hampshire GU10 5PX Hampshire GU10 5PX
Or I/We will transfer funds to the following bank account: Or I/We will transfer funds to the following bank account:
Itasca Wines Limited, Coutts & Co, 440 Strand, London WC2R 0QS Itasca Wines Limited, Coutts & Co, 440 Strand, London WC2R 0QS
Sort code: 18-00-02 Sort code: 18-00-02
Account No: 05541018 Account No: 05541018
SWIFT BIC COUTGB22 SWIFT BIC COUTGB22
IBAN GB40 COUT 1800 0205 5410 18 IBAN GB40 COUT 1800 0205 5410 18
Please delete above as applicable and return this form to Itasca Wines Ltd at the above address. Please delete above as applicable and return this form to Itasca Wines Ltd at the above address.
Signed:................................................................................................................................... Date:...................................... Signed:................................................................................................................................... Date:......................................
Name: (Please Print) ............................................................................................................................................................ Name: (Please Print) ............................................................................................................................................................
Telephone No & Mobile: ...................................................................................................................................................... Telephone No & Mobile: ......................................................................................................................................................
E-Mail Address: ..................................................................................................................................................................... E-Mail Address: .....................................................................................................................................................................
Please enclose with application form: Photograph/scan of the photo page of your passport, or front and back of Please enclose with application form: Photograph/scan of the photo page of your passport, or front and back of
drivers licence, plus a recent utility bill not more than 3 months old. drivers licence, plus a recent utility bill not more than 3 months old.
46 47You can also read
