Oh, this week is a dear diary moment, as was last week, in fairness. Everyone should have some form of a diary, it's a great release (so they say) and I am lucky to have you, some 3,000 customers although some are not willing weekly readers, but that is perfectly fine with me.

Samples. Where do I start? The daily DHL delivery driver attempting to crack the same ‘I wonder where this box has come from’ joke has become beyond boring, nonetheless we continue to be courteous and chuckle along with him (all the while wishing to throttle him). We have a table overflowing with bottles of red wine and two fridges packed tightly with white and sparkling wines. I will come back to this subject a little later.

The detailed costings, albeit in draft form, for our new HQ were revealed this week, which was an eye-opener to put it mildly. Before I share, I will say that our quantity surveyors are excellent and are currently working on assumptions however, some of the proposed fees are preposterous. A staggering £20,750 for a fire pit and seating area (not the size of an Aussie rules pitch), £5,000 for a utility cupboard (including shelves mind you), £100,000 for the water feature and I save the best for last, £16,000 for the internal tree preparation – this does not include the tree! I envisaged an ancient (some 600-800 year old) olive tree positioned in the kitchen / dining space to provide colour, to bring a little of the outside, inside and to create an artistic feature as the ancient bark is beautifully twisted and gnarled. There is £1,000 being assigned to a watering system (can you physically purchase a watering can at this level?) and £2,000 for 5mm thick brass angle edging. I just wanted a lovely tree to come out of the foundations and nothing more. I need to visit my local garden centre for a large pot! For kitchen units they have proposed £70,000 (without appliances). Granted, it is one, long unit but this sum of money is just silly. Thankfully, I know a superb cabinet maker who already has the job (half the price) but let’s not tell them just yet!

I join the design and build team during their weekly Zoom meeting as the pace of our development is gaining serious momentum. In truth, I am not one of the world’s most patient as I like to get things done yesterday however, this is a complex design and demands absolute attention to detail, which the team are providing in boatloads. That said (I told you I struggle with patience!), I'm ready to demolish the grain store, the huge concrete slab which lies beneath it and get the substructure built well before winter sets in… Of course, and given the sheer size and weight of the super structure, there are an awful lot of mathematical calculations to perfect before we consider pouring the concrete. I also visualise the huge ground source heat pump and electricals will feature during phase one of the build. I am planning a multi-use strategy with the heat pump as I am keen to trellis the same system throughout the vineyard as well as our office. Early season frost being a major issue in the English wine industry and I am keen to harness the warmth from the earth rather than worrying about my poor vines. However, and based on the current estimates, my team and I may be providing warming hugs to our vines instead… 

I have also spent hours with our lawyers and accountants – these are eased with the pouring of Pinot Noir rather than tea or coffee, which seem to have gone down a treat. I wonder if I will see a little easing with their respective bills? I have been exploring funding options simply out of curiosity rather than necessity as we have everything in place. Many of you will be aware that we are not reliant on our bank and run a debt and overdraft free business, which makes working with them a less favourable option. Granted, the interest rate on the mortgage is low and the repayments comfortable for us to afford however, and if I am to be perfectly open, I find the thought of paying for their lawyer and quantity surveyor particularly irritating. I took advantage of my bank when we purchased the 4.4 acres for our new HQ – my local manager was most helpful however, it seriously grates on me to pay nearly twenty quid when they take my monthly mortgage payment – almost like a penalty for borrowing money. Granted, and I can hear you all, “it’s only twenty quid” which does pale into significance in the grand scheme of things. However, £240.00 each year is a decent case of wine in my books and best kept in-house rather than on unnecessary fee building twaddle from the bank.

So, I thought somewhat irrationally –sod the bank and let’s sell shares in my company or I could sell a proportion to an institutional investor, ergo my many meetings and accompanying bottles of Pinot Noir. I wonder how many Vinorium customers would love to have physical shares in our company.  Just a thought of course, but this set my cogs into overdrive. Now, and to satisfy UK financial compliance, I am not offering shares, which (and one of the many things I learnt this week) would be a crime in this format.

The rationale is perfectly acceptable as ‘en masse’ mailings without the correct Financial Conduct Authority approval should lead to a serious ticking-off or time with HM Prison Service. I will say, that I spent almost three years acting as an expert for the prosecution in a huge wine scandal case whereby vulnerable investors (others were easily swayed) were conned out of millions, many millions in fact. Not one of the fraudsters spent a day with Ronnie doing Porridge but that’s a long story for another weekend.

Another fascinating education this week covered financial compliance outside of the UK. Our private customer base is scattered globally and some of our ‘best’ reside outside of the UK. I could not entertain the notion of offering the opportunity to purchase shares in The Vinorium unless I had received approval from their respective country. I understand that a one-to-one approach is perfectly acceptable but who has the time to email 3,000 customers? Moreover, I would hate for a customer to be embarrassed by the approach.

I understand that several institutional investors would bite my hand off for as much as a quarter share in my company. Why wouldn’t they as they will also have a financial stake in our new HQ and the 4.4 acres which surrounds it, but the thought of having one of their members on my board of directors frightens the hell out of me. Similar to my lack of patience, I am not open to taking advice or more pertinently, justifying myself to someone who hasn’t a clue how The Vinorium operates or what makes my team so special. Just imagine if they saw my sample account (a poor gag if I have any HMRC readers)! This is not a dead option as the costs associated with this route are significantly less compared to offering our customers a substantial piece of The Vinorium pie, but it’s certainly at the bottom of my list.

We’ve created a splendid brochure this week which is packed with some new, and fascinating facts, which and until this week, I didn’t have a clue about. No, you cannot have a copy as this would be against UK financial compliance. The figures are collated from an external company who collate and compare. How the validity of each report is received is entirely at one’s discretion however, and upon Company House checks, individual company numbers are accurate. 

In essence, when analysing the performance of The Vinorium against the rest of the UK Wine and Spirit industry it is apparent that, in several key areas we are outperforming both the industry average and most other major importers, which we have always known and often shared. But these reports dig deeper and reveal much more. For example, one report demonstrates the pre-tax return on total assets. The Vinorium sits at number 2 with a return of 31.4%.  Farr Vintners (widely considered Europe’s leading fine wine merchant and rightly so in my books) with a higher pre-tax profit level has achieved 24.5%, Corney & Barrow achieved 12.4% and Alliance Wine 8.8%.

The top 50 most profitable companies within the industry shows The Vinorium in 5th position with a profit margin of 25.20% with Farr Vintners with 8.80%, Justerini and Brooks with 7.30% and Corney & Barrow at 5.50%. The final report demonstrates the performance of The Vinorium against 51 similar sized companies within the industry. The Vinorium shows dramatically higher pre-tax profits when compared to the other companies.  Our pre-tax profits sit at £1.061m which is 60% higher than the next company on the list and 674% higher than L’Assemblage Ltd who have a very similar level of total sales.

In summary, The Vinorium is ranked amongst the fastest growing in terms of sales growth for the latest year, with a profit margin of 36.4% which is well above the industry average of 18.1%. Sales have increased by 22.4% versus an industry average of 5.2% with our pre-tax profit margin at 25.2% which is also above the industry average of 2.5%.  The company is rated in the top 60 companies under the gross profit category.

Liberty Wines (previous winners of IWC Australian Wine Merchant of the Year and respected importers in our opinion) operate a similar business to The Vinorium as major importers of Australian wines. In fact, and prior to the arrival of The Vinorium they were considered the UK’s leading Australian specialist however, The Vinorium now hold this position. Their sales for the previous year stood at £75m, but the profit generated from these sales was a mere £2.6m which gives them a profit margin of 3.5% compared to The Vinorium’s 25.2%.  Liberty’s sales grew by 10.4% while ours grew by 22.4%. Another comparable business is Berkmann Wine Cellars,  their sales are similar to Liberty Wines at £76.3m but with profit of just £1.3m. They also saw a growth in sales last year but at just 8.2%, while ours grew at 25.2%. I imagine these are the reasons why institutional investors would like shares, but and ‘if’ shares were ever to be offered, Vinorium customers would receive first dibs.

The first vines were planted in 1985.

As we were discussing the early days of Cobaw Ridge, Nelly reflected: “We did not initially set out to make wine but after doing some numbers and thinking about the tiny amount of potential crop we would eventually pick, it added up.”

Alan and Nelly’s aspiration was to plant and manage the vineyard organically. However, juggling full time work in Melbourne to pay for everything, together with establishing and working the vineyards proved increasingly challenging. “We could not manage to keep up with the rapid amount of growth of everything including the weeds ... we relented!” said Alan.

He carried on, explaining: “During that time we used only herbicide, never pesticides, and all the fungicide sprays were soft options.

Once the majority of the vineyard was very well established, we again started to rethink about organic.

Given that all the work in the vineyard is done by us, we did not want to be working in a chemical soup - all very logical!”

The changes towards converting to a fully organic vineyard began in 2005. A larger tractor that was able to run an under vine cultivator was a great help.

Vintage 2008 marked our "organic in conversion " year followed by full certification organic in 2009.

The next stage of evolution, logically, was to take the vineyard and winery into biodynamics. Hence now, all wines produced at Cobaw Ridge brush on the "natural" with a touch of sulphur being the sole addition. 

Fully certified Biodynamic status was achieved in 2011. 

Nelly reflected: “Since that first decision to build a winery, we have been constantly adding to the equipment and plant to be totally self-sufficient.

Now we have the final pieces in place, including our own small bottling line.”