The Artisanal Spirits Company LON:ART the Edinburgh-based producer and distributor of premium spirits was originally established to tap into the growing interest among consumers for small-batch, handcrafted alcoholic beverages that are typically made using traditional methods and high-quality ingredients. Basically following the hipster beer movement along the alcoholic curve into spirits.
Part-distiller, part-membership subscription service, part-tech company ASC is the curator, so the company says, of “the world’s favourite, single-cask and limited-edition whisky.” Based in Scotland, ASC owns The Scotch Malt Whisky Society (SMWS) which was established in 1983 and currently has a growing worldwide membership of just over 36,000 paying members.
The SMWS provides members with “inspiring experiences, content and exclusive access to a vast and unique range of outstanding single cask Scotch malt whiskies and other craft spirits,” sourced from over 100 distilleries in 20 countries and “expertly curated with diligence and care.”
- Quadrise passes milestone test
- IPO Radar: ServiceTitan, Shein, Greatland Gold
- Greatland Gold outlines “significant upside opportunities” in Newmont deal
Diverse revenue source
Since producing the Society’s very first cask, ASC has created around 10,000 different whisky releases, “producing a constant flow of unique and exciting one-of-a-kind whiskies.” With proven e-commerce reach and new brands like J.G. Thomson, ASC is building a portfolio of small-batch spirits brands for a global movement of discerning consumers – delivering GBP20m in annual revenues with over 80% of revenue generated online and over 65% from outside the UK, with a growing presence in the key global whisky markets including UK, China, USA and Europe.
The company published its results for the year to 31 December 2022 today (29th March) reporting a year-on-year 19% increase in revenues to GBP21.8m with a large chunk of that from China, with growth in membership subscriptions in Japan, the US and Australia.
Earnings were up to around GBP400,000, compared to negative earnings of GBP600.000 a year ago, but the company was still making a loss before tax of GBP2.1m, slightly better that the GBP2.6m loss it reported a year ago.
Investment plan
The company did invest heavily in 2022, committing GBP5.5m to cask spirit and wood, increasing casks under management by 7.8% to 16,500 casks. The company also invested in a new bespoke bonded warehouse for GBP2.5m.
At the end of last year, ASC upsized its revolving credit facility with RBS from GBP18.5m to GBP21.5m extending the tenor by two years to December 2025, which leaves the AIM-listed company well-funded to continue to invest in growth for the medium and long term.
The company’s shares opened trading today at 99p, but had fallen to 95p by lunch and has offered a 31.4% year-to-date return, a 22.2% one-year return with shares trading in the range of 51.5p to 102p over a 52-week period. The company has a market capitalisation of GBP62.8m.
Management stated that it remains confident in delivering on ambitions of doubling revenue between 2020 and 2024. Earlier this year, David Ridley stepped down as managing director and Andrew Dane was appointed CEO. Dane said: “Our ambition is to create a global, premium business which is highly profitable and cash generative by delivering the world’s best whisky experiences.”
The share price has taken a pleasing uptick this year, and might be on the verge of turning a loss-making history to profit. That said the company needs to keep an eye on its debt position, as interest rates continue to rise. Luxury goods companies have bucked the trend over the last year, with apparel companies to luxury car manufacturers having strong performance as their better-off clientele spends it way out of recession. Hopefully in the next year ASC will turn a spirited performance into profit.
