Revenue rises

Demand for premium whisky lifts Artisanal

Scotch Malt Whisky Society
Membership has grown at the SMWS

Whisky curator The Artisanal Spirits Company, owner of The Scotch Malt Whisky Society (SMWS), has continued to see demand rise among discerning drinkers seeking out premium products.

The company, which opened up a new post-Brexit route to market last year, saw SMWS membership increase by 24% to more than 35,600 (30 June 2021: 28,700) in the half year to the end of June.

Post-period, it is now just over 36,000, including a return to growth in China during Q3 and acceleration in growth in the US (up by c.200 since 30 June).

Revenue for the period increased 25% to £9.9 million (H1-21: £7.9 million).

The company has seen significant growth in UK venues, Europe and China and gross margin of 63%, ahead of the 61% achieved in FY21.

The loss before tax came in at £1.1 million (H1-21: £0.9 million loss).

The net debt was £8.2 million (June 2021: £1.9 million; December 2021: £5.2 million), as the group continued to invest in planned strategic initiatives, most notably investment in spirit and wood and the new supply chain facility Masterton Bond.

David Ridley: compelling opportunity

ASC said it remains fully funded to finance its expansion plans for the foreseeable future. A first export deal for JG Thomson has been agreed with La Maison du Whisky in France, while talks with distributors in the United States are continuing.

The company intends to launch a membership scheme based around American whiskey next year.

David Ridley, managing director, said: We are pleased with the Group’s strong first half performance which has once again delivered significant membership growth, whilst simultaneously continuing to build our business in terms of appreciating whisky stocks and infrastructure to support our future growth ambition for the medium to longer term.

“We continue to benefit from structural tailwinds as premiumisation, digitalisation, experience and convenience combine to accelerate the appeal of our proposition to our expanding global membership base. 

“Our opportunity remains compelling, exciting and highly relevant for today’s marketplace.  Furthermore, and as evidenced by the continued growth by many of the global spirits majors, whisky continues to demonstrate its strong and enduring credentials. 

“ASC’s unique portfolio of curated, limited edition whisky benefits from natural price elasticity which, in turn, provides strong gross margin appreciation and a natural inflation hedge. 

“Financially strong with current stock value over 2x consensus December 2022 net debt, we remain on track to deliver a doubling of revenue from 2020 to 2024.”

He told Daily Business that the company had been focused on growing the top line. It was on track to double sales by 2024 and become a “highly profitable, cash generative business”.

The Scotch Malt Whisky Society range in Queen Street, Edinburgh

Shares in the company, which were floated on AIM at 112p in June last year, have underperformed and rose 2p to 76p last night.

Drinks analyst Sahill Shan at Singer Capital Markets said: “interims show another period of excellent progress.

“ASC shares have been unfairly caught up in [the] wider consumer / ecommerce sell-off. Yet today’s results show its KPIs remain strong and we reinforce the point that is has a business model more aligned to primary producers than resellers.”

Chris Wickham at Equity Developments said: “Interim results released today reconfirmed robust growth in both revenue and membership in the first half of FY2022, and trading so far in the second half also appears strong.

“As a result, we maintain our confidence in close to 20% sales growth this financial year and reiterate our 150p fair value for the shares.”

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