REG - Artisanal Spirits Co - Preliminary Results
31/03/2025 07:15
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250331:nRSe7911Ca&default-theme=true
RNS Number : 7911C Artisanal Spirits Company PLC (The) 31 March 2025
The Artisanal Spirits Company plc
("The Artisanal Spirits Company", "ASC" or "the Group")
Preliminary Results for the year ended 31(st) December 2024
Delivering profitable growth, cash generation and strong asset backing
The Artisanal Spirits Company (AIM: ART), the creator of outstanding,
limited-edition whiskies and experiences around the world, and owner of The
Scotch Malt Whisky Society ("SMWS"), Single Cask Nation ("SCN") & J.G.
Thomson is pleased to announce its preliminary results for the year ended 31
December 2024 ("FY24").
The Group delivered EBITDA of £1.1m, a record performance which was slightly
ahead of market expectations. In challenging economic conditions, the Group
has shown strong resilience to deliver profitable growth and cash generation,
which, alongside its strong asset base of cask spirit, gives us continued
confidence to meet our future strategic and financial goals.
Highlights
· Profitable growth; Full year FY24 EBITDA of £1.1m, slightly
above consensus expectation of £1.0m
· Cash generation; £1.5m net debt reduction in H2-24
· Asset backed; Over 18,000 casks in stock, independently valued in
July 2024 at £102m
· Membership growth; SMWS membership up 4% against prior year
Financial Highlights
· Marginal revenue growth of +0.4% to £23.6m (2023: £23.5m), with
continued revenue diversification
· £1.5m of sustainable, long-term savings across Commission,
A&P, Payroll and Overheads
· EBITDA of £1.1m, up £1.6m vs prior year (2023: (£0.5m)) £1.0m
improvement vs prior year adjusted EBITDA*
· Loss before tax reduced to £3.1m (2023: (£3.6m)), profit growth
offset partially by increased interest costs
· H2-24 reduction in net debt** of £1.5m, resulting in a year end
net debt of £25.5m, (Jun-24: £27.0m, Dec 23: £22.6m)
· Cask stock holding with NBV of £27.8m (2023: £25.9m), which when
independently appraised during July 2024 was valued at £102m
£'m 12 months to 31 December 2024 6 months to 30 June 12 months to 31 December 2023
Note 2024
Revenue 6 23.6 10.1 23.5
Gross profit 15.0 6.4 15.0
Gross margin 64% 63% 64%
EBITDA 7 1.1 (1.0) (0.5)
Loss before tax 7 (3.1) (3.1) (3.6)
Loss after tax (3.3) (3.2) (3.7)
Net Debt** (25.5) (27.0) (22.6)
Cask inventory 15 27.8 26.5 25.9
Cask inventory valuation*** 102.0 n/a
* Adjusted EBITDA defined as earnings before interest tax, depreciation,
amortisation and non-underlying costs
** Net debt defined as current and non-current financial liabilities less cash
and cash equivalents per the Statement of Financial Position, less interest
accrued on inventory financing.
***Cask inventory valuation based on an independent valuation completed by
sector experts.
Operational Highlights
· Membership growth of 4% to 42,700 (2023; 41,000) with Europe
supported by notable UK growth of 10% and the Asian region led by China (+24%)
and recently added Korea franchise (+59%)
Global Membership
December 2024 December 2023 % Change
Europe 27,400 25,900 6%
Americas 8,000 8,300 (4%)
Asia 5,500 4,900 12%
Other 1,800 1,900 (5%)
Total 42,700 41,000 4%
· New product development success, with inaugural Creators
Collection "Peat Plant Collection", released in Q4-24 having generated over
£250k of sales.
Current Trading/Post Period Highlights
· The start to the year has been strong, with achievement of
double-digit revenue growth in Q1-25 vs Q1-24
· Revenue growth led by bottle sales in Europe, supported by
further success of the new Creators Collection range, as well as early success
on delivering against full year cask sales targets
· In January 2025, we completed the investment in the SMWS America
("SMWSA") business, resulting in ability to take a greater proportion of the
value chain from full control of membership and marketing services. Year on
year profitability improvement in Q1-25 has more than offset this previously
announced one-off £0.5m investment in SMWS America (SMWSA)
· Further awards across the Group including celebration of SCN
retaining their Independent Bottler of the Year Award at the prestigious
'Icons of Whisky Awards'
· Completion of the sale of the second (and final) Vaults
residential property, generating £0.3m cash inflow in Q1-25
Andrew Dane, CEO of Artisanal Spirits Company, commented:
"Our ambition remains to create a high quality, highly profitable and cash
generative, premium global business and we made good progress on achieving
this during FY24, despite a backdrop of uncertain economic conditions in some
markets.
We have delivered profitable growth, helped by our successful acquisition of
US based Single Cask Nation in January 2024 and the additional investment in
our SMWS USA operations completed in January 2025 also further augments the
exciting opportunity for ASC to deliver profitable growth in this key market.
We continue to have an outstanding asset backing, with the current cask
inventory value of just over £100m representing around 4x both NBV and Net
Debt. We have now made the important transition of only acquiring stock on a
replenishment basis, and this continues to increase the positive future cash
profile of the business which is encouraging.
Overall, we exit FY24 with a good set of results behind us, with a positive
start to Q1-25 meaning that we are on track to deliver further profitable
growth and cash generation in FY25 and beyond."
31 March 2025
Sellside analyst presentation
Andrew Dane, Chief Executive Officer, and Billy McCarter, Chief Financial
Officer, will host an in person presentation for sellside equity analysts
today at 09.00 hours GMT.
Analysts wishing to join should register their interest by contacting:
artisanalspirts@instinctif.com (mailto:artisanalspirts@instinctif.com) .
A recording of the presentation will also be made available via the Group's
website later today.
Investor Meet Company presentation
Andrew Dane, Chief Executive Officer, and Billy McCarter, Chief Financial
Officer, will host a virtual presentation on Thursday 3 April at 09.00 hours
GMT.
For further enquiries:
The Artisanal Spirits Company plc https://artisanal-spirits.com/link/6rklZP
(https://urldefense.proofpoint.com/v2/url?u=https-3A__artisanal-2Dspirits.com_link_6rklZP&d=DwMFaQ&c=euGZstcaTDllvimEN8b7jXrwqOf-v5A_CdpgnVfiiMM&r=DdcC_uJd9V_8mnxcxhRDw3B8iTlYVSO3GIFuh9hrRJkrhA248Z2XrpZppRjVrDDr&m=WOkQwJ95_O9V3g8ehxSahI6Fl2bcPfl8c_AXTJm4e0wSHsmBGQhRDxQ4jFd25bCv&s=0qNRE1W_bdq3mCHymu0DIgUuUf9BZl2Za-dGZD9ysWc&e=)
Andrew Dane, Chief Executive Officer
Billy McCarter, Chief Financial Officer
Panmure Liberum Limited (Nominated Adviser and Broker) Tel: +44 (0) 20 3100 2222
Dru Danford
Edward Thomas
John More
Instinctif Partners (Financial PR) Tel: +44 (0)20 7457 2020
Justine Warren
Hannah Scott
About The Artisanal Spirits Company
ASC's purpose is to captivate a global community of whisky adventurers, by
creating and selling outstanding, limited-edition whiskies and experiences
around the world, with an ambition to create a high quality, highly profitable
and cash generative, premium global business.
Based in Edinburgh, ASC owns The Scotch Malt Whisky Society (SMWS), Single
Cask Nation (SCN) and J.G. Thomson (JGT). Owning over 18,000 casks primarily
comprising Single Malt Scotch Whisky, ASC's stock includes outstanding whisky
(and other spirits) from 150 different distilleries across 20 countries which
is sold to members both as individual bottles and whole casks.
With an established global presence in some 30 countries, SMWS operates a
direct-to-consumer model (90% of revenue) primarily through e-commerce, in
addition to four member rooms in the UK. SMWS provides members with inspiring
experiences, content and exclusive access to a vast and unique range of
outstanding, expertly curated Scotch malt and other whiskies.
In January 2024, ASC acquired SCN which sources, curates and bottles
single-cask whiskies and other spirits selling both online and via traditional
retail channels to its following of over 10,000 whisky enthusiasts in the USA.
SCN also retails to key international whisky markets around the world.
Launched in the UK in late 2021, JGT has a focus on outstanding small batch
blended malt whiskies and other spirits, available both through
direct-to-consumer online sales and through traditional retail channels. The
award-winning brand has subsequently expanded into international markets.
With proven e-commerce reach and a growing family of brands, ASC is building a
portfolio of limited-edition and small-batch whisky and other spirits brands
for a global movement of discerning consumers - delivering revenue of £23.6
million in FY24, predominantly from outside the UK, with an expanding presence
in the other key global whisky markets including USA, China, Europe, Japan,
Australia and Taiwan.
ASC has a substantial asset backing and is delivering profitable growth and
cash generation.
Chairs Statement
I am pleased to present this year's Chair's report, following a year where the
global whisky market faced headwinds, but the Group was able to deliver
membership growth, revenue stability and EBITDA growth.
The Board continue to focus on four broad areas - governance, strategy,
performance and culture - ensuring that the business is well led and well run.
Despite ongoing business progress, frustratingly the market valuation of ASC
materially lags both its performance trajectory and its asset value. This
remains a key focus for the Board and Executive team as we seek to drive total
shareholder returns. Through a review of our capital allocation strategy
alongside active conversations with a number of our shareholders, profit
growth and cash generation remains the absolute focus.
We will strengthen our balance sheet ensuring capital is deployed against
building business momentum including cask purchases, deleveraging, retaining
optionality for strategic M&A (with Single Cask Nation a good example of
this) and then longer term consideration of a dividend policy or share buy
backs.
Strategic priorities focus delivers first positive EBITDA delivery since IPO
This year marks a significant milestone for our Company as we delivered our
first positive EBITDA since our IPO. This achievement is a testament to our
focus on our strategic priorities and operational efficiencies. Our guidance
indicates an improving revenue and EBITDA trajectory and strengthening balance
sheet, reflecting our commitment to sustainable growth and profitability.
Growing SMWS Membership and Aspirations for Further Growth
SMWS membership continues to grow, reflecting the value and appeal of our
offerings. We have ambitious aspirations to further increase our membership
numbers, which we believe is the gateway to future growth. Our strategies are
designed to attract, retain and engage members, driving long-term value. We
are also proud to report that member retention rates for SMWS have held up
strongly. This stability is a key indicator of member satisfaction and
loyalty, which are critical to our ongoing success. We remain committed to
enhancing the member experience and delivering exceptional value both through
the on-line and in person offering.
SMWS venues continue to perform solidly, contributing to our overall success.
We have focused on optimizing our venue operations to ensure they deliver
exceptional experiences for our members and guests and will continue to
enhance our flagship "storefronts" for the Group's products.
Positive developments in the USA
We have taken major steps to unlock the potential of the US market as we take
more active control over operations allowing us to expand more rapidly and
more efficiently in the USA. This complements the 2024 acquisition of the
Single Cask Nation business, which has overdelivered on expectations, and
continues to win awards and delight the "members of the nation" with
outstanding whiskies.
As we head into 2025, while there is no specific new tariff currently being
proposed on our products, the threat of tariffs remains a possibility and the
group is taking steps to minimise any potential impact through management of
our US stockholding, the optimal route to market, and our ability to utilise a
greater percentage of US whiskey, should this be required at any stage.
China and Asia: a more manageable risk
While China and the Far East remain important markets for the Group, our
exposure to the Chinese market has reduced, limiting the risk to the Group of
further downside while being positioned to capitalise on any recovery.
Our international expansion efforts continue with Vietnam being our next
target market. We are confident that our proven strategies and strong brand
will resonate with consumers in Vietnam, opening new avenues for growth and
success. This will build on previous expansions into Taiwan, South Korea and
across South-East Asia, where demand for ultra-premium whisky remains strong.
Evolving the SMWS Portfolio
We are excited about the evolution of the SMWS range to provide our members
with exclusive opportunities to explore and enjoy a wider range of products,
further enhancing their experience and delivering outstanding whisky at
multiple price points. Innovation remains at the heart of our product
portfolio strategy. We are accelerating our efforts to introduce new and
exciting products that meet the evolving needs and preferences of our members.
The introduction of the Creators Collection is a fine example of this, with
the first release generating over £250,000 of sales in the first few weeks
after launch. Additionally SMWS will continue to develop private cask sales as
a strategic priority giving existing and new members the opportunity to
acquire full casks of our outstandingly curated whiskey.
Improving Balance Sheet
Our balance sheet is improving as we see a reduction in net debt in the second
half, cash generative in FY24-H2, reflecting our disciplined financial
management and capital allocation strategy. This improvement provides us with
the financial flexibility to pursue growth opportunities and navigate
potential challenges. The balance sheet is underpinned by the exceptional
stocks of whisky and spirits held by the Group, with over 18,000 casks in
ownership with a current replacement valuation of over £100 million. Our
asset value remains robust and is well ahead of our market capitalisation.
This strength underscores the inherent value of our business and provides a
solid foundation for future growth and value creation.
People and Culture
People are central to everything we do and the results of our 2024 culture
survey demonstrated that we have an engaged team who are passionate about
delivering world class experiences for our members around the world.
We continue to invest in people development ensuring that we have a work
environment that represents the premium experiences that we seek to deliver.
In conclusion, we have made significant progress this year, achieving key
milestones and positioning ourselves for continued success. I am confident
that our strategic initiatives and dedicated team will drive our company
forward, delivering value for our members and shareholders.
Thank you for your continued support.
CEO Statement
Creators of outstanding, limited-edition whisky and experiences
At the Artisanal Spirits Company, we aim to captivate a global community of
whisky adventurers, and we do that by creating and selling an unrivalled
selection of outstanding, limited-edition whisky and experiences.
Our ambition is to create a high quality, highly profitable and cash
generative, premium global business and I am delighted to report that we have
delivered our strongest EBITDA performance to date and have transitioned into
a cash generative business from the latter part of FY24, as we make progress
against that ambition.
This progress would not have been possible without the amazing team at ASC,
and I would like to thank them for the quality and commitment of their efforts
throughout the year.
Significant progress made since IPO
Whilst the journey to date has not been without its challenges, I thought it
would be helpful to reflect on the substantial progress that has been made
since our IPO in H1-21.
Both revenue and SMWS membership have each grown by 57% since 2020 (with
membership at 31 December 2024 now over 42,000), supported by significant
revenue diversification, product quality and innovation, international
expansion, new brands
and investment in marketing.
The Scotch Malt Whisky Society remains at the heart of the business; however
we were delighted to welcome Single Cask Nation into the Group in January
2024, with a very positive inaugural year since acquisition.
The overall mix of the business has continued to evolve, with China gradually
increasing to almost a quarter of the business in 2022, before reducing to
only 10% in FY24, reflecting the economic headwinds in the market.
In response to this, we have been able to show strong agility, and revenue
diversification, and excluding China, the rest of the business delivered a 15%
CAGR between 2020 and 2024.
I am pleased with our ability to move with pace on these long term strategic
opportunities for the group, with launches in new markets like Korea and
significant growth in Taiwan, the successful acquisition of Single Cask
Nation, as well as product development such as our 50th Anniversary Cask
Programme and more generally our development of our cask sales offering
helping to reduce dependency on individual markets, products or brands.
From a strategic investment perspective, we have successfully deployed the
£15m of new equity raised on IPO. This, together with debt, has been
primarily used to fund the £14m investment in spirit between 2021 and 2024,
and a further £3m on cask wood during the same period. Following this
significant investment in the cask inventory, we now hold all spirit required
to meet demand through to the next decade. As a result, the cash profile of
the Group is improving; and we believe that net debt has peaked, as we
transition from material net cash investments in stock to a replenishment
approach.
The new equity at IPO also helped us to complete our £2.5m investment in our
Masterton Bond supply chain facility where we have now produced over 335,000
bottles and have over 2,300 casks in storage, helping to reduce our third
party costs and dependency.
We have also been able to invest in our international markets, in particular
south-east Asia, and more recently in the USA, as well as to improve our IT
and e-commerce systems across the business and undertake the substantial
refurbishment of the SMWS brand home at the Vaults in Leith in 2023.
This investment in the Vaults helped to deliver the joint fastest growth of
any venue in FY24 (+£0.1m = 8%). Overall, the member rooms remain a critical
part of our member proposition, with around 100,000 visitors to our venues
across 2024, helping to recruit around 1,000 new members and support almost
£4m of revenue in the year. We have continued to invest in these member rooms
during the year, with the successful roll out of a new electronic point of
sale ("EPOS") till system across the venues in Q4-24 which is already driving
benefits to members and our business.
As we look ahead, the level of capital investment has reduced, meaning that
since June 2024, we have now transitioned into a cash generative phase for the
business.
Profitable Growth
For 2024, we delivered a £1.6m year on year improvement in reported EBITDA
(FY23: £0.5m loss) and a £1m improvement in Adjusted EBITDA (FY23: £0.1m),
in the context of revenue being broadly flat at £23.6m (FY23: £23.5m).
This creditable performance has been achieved despite ongoing challenging
trading conditions in certain markets and further demonstrates the strength
and flexibility of the ASC business model.
Growing profitability has been delivered through successful expansion into new
markets and new brands with the acquisition of Single Cask Nation in the USA,
quality product innovation, the evolution of our cask programme, all with a
continued focus on efficient cost management, each of which is set out in more
detail below.
New markets
We have continued to deliver growth in new markets, most notably the first
full year of trading for the Taiwan subsidiary and franchise in South Korea.
We are also pleased to be about to launch a new franchise in Vietnam, aligning
with our strategy to expand internationally and further diversify the Group,
by commencing operations in one of the world's top 20 markets for
Ultra-Premium Scotch Whisky.
Early in 2025, we have also taken greater operational control of the SMWS
America business as part of our stated ambition to further grow its presence
in the USA and take a greater advantage share of the sizeable American market,
confident that the £0.5m investment will enable us to deliver more
substantial membership and profit growth.
Single Cask Nation
Named Independent Bottler of the Year at the Whisky Magazine's Icons of Whisky
America awards for both 2024 and 2025, Single Cask Nation is regarded as the
USA's premier bottler of rare and exceptional single cask whiskies. "Bottled
by whisky geeks for whisky geeks the world over", the Single Cask Nation
represents a passionate community of whisky lovers that spans the globe.
I am delighted with the performance of the business since acquisition, with
the business and the team integrating well into the wider Group, and year one
profitability exceeding our targets.
Product innovation
The SMWS has always been a haven of innovation with a prowess for creating and
selling outstanding, limited-edition whiskies and experiences around the
world. The Society recently launched its new "Creators Collection" with its
inaugural release of the series, The Peat Plants Collection, at the end of
November 2024. This was followed by the recently launched Homecoming
Collection.
Complementing SMWS' existing Signature and Heresy ranges, the Creators
Collection is a new series from the Society that showcases the liquid art of
whisky making and the visual art of illustration, curating some of its oldest
and rarest whiskies and collaborating to design beautiful labels to create the
ultimate in whisky flights.
The first two releases of the Creators Collection have been met with
encouraging demand by members of the Society, eager for each release, with
strong trading results. The initial "Peat Plants Collection" generated over
£250k of sales, with the second "Homecoming Collection" proving equally
popular.
Through the Signature range, the SMWS is constantly innovating, showcasing
exceptional single cask, single malt whiskies, bottled at cask strength to
preserve their unique character and flavour.
Following a number of new Japanese whisky distillery releases, we recently
released our first casks from two exciting new Scotch whisky distilleries
(numbers 161 & 163) to great acclaim, with more to come.
This sits alongside the ever-popular Heresy range of small-batch whisky from
the SMWS, which allows the Society to explore new flavours by combining
whiskies from different casks and distilleries, an innovative approach
providing members with a unique tasting experience that challenges
conventional whisky norms.
Similarly, our acquisition of Single Cask Nation in FY24, has not only
delivered better than expected initial trading results, but also allows us to
incubate and trial new product propositions in a low cost/low risk way with
the scope to expand in due course, whilst accelerating our US operations.
Likewise, our ability to innovate also extends to our recently launched full
bottling service for third party customers at our Masterton Bond Supply Chain
Facility. Our experience in sourcing and supply of dry goods, spirit
preparation, bottling, packing and customer service, particularly with regards
to smaller volume runs, makes us well placed to take care of bottling and
distribution requirements across the industry.
Cask programme
In addition to trade cask sales to trusted industry partners, we have also
evolved our cask programme for SMWS members. Complementing the range, we also
offer our members access to exclusive casks, recognising the different
requirements each market has and the ability for us to offer unique offerings
to the members in those markets.
Our 50th Anniversary Cask Club also gives our members the opportunity to
purchase an entire SMWS cask, handpicked from Society favourite distilleries
and flavour profiles. These casks will be bottled in 2033, the SMWS 50th
anniversary, and decorated with a unique 50th Anniversary Club label design,
personalised with the member's name, message and signature.
Cost Management
We have continued to focus on ensuring that we have the appropriate cost base
to support the business' growth trajectory. During FY24, this meant we have
been able to deliver substantial, recurring cost savings, with reductions in
overheads, payroll, advertising and promotion and selling costs.
As we look ahead, with the progress made to date to deliver an optimised cost
base, we are now in the position to translate future revenue growth more
directly into bottom line improvements in profitability as we deliver
continued profitable growth.
Cash Generative
Net Debt peaked at £27m in June 2024 (underpinned by whisky assets valued at
c.£100m). The Group has now started to reduce net debt as it transitions into
a phase of generating positive operating cash flows, with a £1.5m reduction
in net debt during H2-24.
Looking ahead, the cash profile is expected to continue to improve. ASC has
transitioned from material net cash investments in stock to a replenishment
approach, with spirit and wood spend expected to further significantly reduce
in FY25 vs FY24, which alongside positive operating cash flows from improved
profitability, results in a net debt reduction trajectory for the Group.
Strong Asset-Backing
Our proven strategy of investing in whisky stock has built an impressive
inventory to satisfy our requirements and deliver outstanding liquid to our
members well into the next decade, as well as delivering a significant uplift
in value creation.
We are driven by the quality of the liquid, and it's not just our members who
love our whiskies, with the Group picking up a staggering 54 awards commending
our spirit this year, taking the Group's total to 347 international awards
since 2018. This reflects the significant investment from our team in creating
a unique and outstanding cask holding.
During H2-24, an independent cask spirit valuation was undertaken which
assessed the value of our cask inventory at just over £100m, representing
around 4x both our current Net Book Value (NBV) of cask spirit and our Net
Debt.
This valuation has also been demonstrated by the c£4m of trade and private
cask sales in the year which delivered an average of 4.9x NBV.
Current Trading
The opportunity for growth in the USA remains a key focus for the Group.
Correspondingly, in January 2025 we made a £0.5m investment in The Scotch
Malt Whisky Society in America ("SMWSA") which provided a transition to full
operational control with effect from 1 January 2025. This one-off cost
resulted in a (non-recurring) reduction to reported EBITDA in FY25.
We are excited by this change, whereby the in-country marketing and operations
team have become ASC employees since the start of 2025, providing ASC with
direct operational control as well as an optimised cost structure in the
market. We are confident that this change will provide the Group with an
enhanced platform from which to deliver more substantial membership and profit
growth in the world's largest Ultra-Premium Whisky market.
We are pleased to have started FY25 strongly, delivering double digit growth
in Q1-25 vs Q1-24. This has helped to support a year-on-year profitability
improvement in Q1-25 which has more than offset this £0.5m investment in the
US.
As we continue to improve the quality of our shareholder engagement, we are
pleased to have launched a new ASC website www.artisanal-spirits.com and look
forward to the imminent relaunch of our Spirited Shareholder benefit
programme.
Overall, we therefore exit FY24 with a good set of results behind us, with a
positive start to Q1-25 meaning that we are on track for a strong set of
results and to deliver further profitable growth and cash generation in FY25
and beyond.
CFO Statement
Full year EBITDA delivery and H2-24 cash generation sets us up strongly for
sustainable profit and cash generation
I am pleased to share the financial results of ASC Group for FY24 and the
achievement of EBITDA of
£1.1 million. While the spirits market remained tough, we further
strengthened the H1-24 EBITDA
improvement of £1 million to deliver a full year EBITDA improvement of £1.6
million (£1.0 million at
an adjusted EBITDA level).
The loss before tax of £3.1 million, an improvement on the prior year (FY23;
£3.6 million loss), represents the EBITDA delivery of the Group, offset by
increased interest costs.
Global Revenue Diversification
Revenue of the Group was up marginally on prior year, +£0.1 million,
evidencing continued
diversification and resilience of our revenue base, notably our ability to
offset a 34% revenue decline in
China where significant economic headwinds continued to exist.
The ability to offset such challenge over the last 18-24 months, where China
has moved from 25% to
10% of our global revenue is testament to the strategic moves we have made in
Taiwan, Korea,
Single Cask Nation (SCN) and cask sales (within Europe).
Europe
As the home of SMWS, the European region comprises UK online, UK Venues,
Europe and our two franchise markets, Denmark & Switzerland.
Membership grew 6% in the period in the region, to just over 27,000 - making
up 64% of the Group total - which along with contributing 58% of Group
revenue, makes it our largest global market. Most of the growth in membership
came through the UK with an online presence alongside four outstanding member
rooms.
Revenue growth in the period of 7.6% was primarily delivered by the continued
and planned success of the cask sales programme, with £4.0 million delivered
within the Europe region. FY24 cask sales were primarily made to trusted trade
partners, but as we enter 2025, we aim to further build on the strategic
growth of private cask sales across the Group.
Americas
2024 saw the region welcome the newly acquired Single Cask Nation business,
complementing the core SMWS America (SMWSA) brand and the franchises of Canada
and Mexico. SMWS membership in the region was marginally down 3% at just over
8,000, with SMWSA retention levels falling slightly to 63%. We were pleased to
see that the overlap between the c7,000 paying SMWS membership and the c8,000
on the SCN mailing list was less than 5%, supporting both the distinct
propositions of the brands, and the overall size of the addressable market
opportunity.
The first-year performance of SCN has been a resounding success, integrating
well within the Group and surpassing profit expectations - achieving EBITDA
and PBT margin of over 38% on
£0.7 million of revenue.
The SMWS America business, which represents 80% of revenue delivery in the
region, saw a 12% decline in revenue, based on reduced volume shipments to the
market in line with many other spirits companies who continued to de-stock
following strong Covid years. The SMWSA depletion performance was down 7% on
prior year which reflects a relatively resilient performance compared with
other spirits companies who have reported declines at high single digit or
double-digit levels over the past 12-18 months.
Overall, the region witnessed 3% revenue growth in year, with SCN offsetting
the decline in SMWSA.
Going forward, the Americas region is a key strategic opportunity for the
business as we build on the initial success of SCN with continued brand growth
and special projects as well as greater control of the SMWSA business, taking
more direct control of recruitment and marketing, pricing and whisky selection
and further enhancing member experience.
Asia
Our key Asian markets consist of China, Japan, Taiwan and franchise partner
Korea, alongside franchises in Malaysia and SE Asia. Membership in the region
saw significant growth year on year, +12% to over 5,400, driven by +24% in
China and +59% in Korea, the former increasing its retention levels from 49%
to 62% and the latter further consolidating its new position in the region as
a high performing franchise market.
In terms of revenue, the region saw another year of decline, minus 20%,
predominantly driven by the challenging economic headwinds in China. However,
the Group has offset this decline with stronger delivery within the Europe
region as highlighted above and we remain well placed to benefit when the
recovery in the market takes place.
In our internal forecasts we have assumed no material recovery in the China
economy over the next 2-3 years, which will hopefully represent a relatively
prudent assumption for medium term growth in the market.
In the other markets within the region, the first full year of Taiwan,
delivering +150% on FY23 and continued strong delivery of the 2023 launched
franchise in Korea, helped offset challenging conditions in Japan, where like
China revenue was down around 30%.
Other
The other markets within SMWS, representing 4% of the Group business, both in
terms of revenue and membership, consist of our wholly owned subsidiary in
Australia and franchise operations in New Zealand and South Africa.
Australia had a strong year with regards to its revenue delivery, achieving
10% growth, the region overall therefore achieving 4% growth. The New Zealand
franchise saw decline year on year as it went through a destocking process
ready for growth in FY25. Overall, the membership in region declined slightly,
6%, to just over 1,800.
Selling & Distribution Expenses Administrative Expenses
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Commission 1,071 1,524
Advertising & Promotion (A&P) 2,297 3,081
Depreciation 1,627 1,455
FX Loss 118 178
Overheads 3,485 4,189
Payroll 7,143 6,712
Total 5,114 6,238 10,628 10,901
Cost base management and efficiencies
Throughout this year we have taken the opportunity to further review and
manage the cost base of the business.
I am pleased to say we have achieved £1.4 million (8%) of long term
sustainable savings across the full cost base (£1.5m (10%) across the core
cost base of Commission, A&P, Payroll and Overheads) - leaving the
business not only leaner in a more challenging spirits environment, but one
that is equipped to deliver our ambitions of gross profit growth delivery to
the bottom line.
Selling & Distribution Expenses
The biggest efficiency achieved in this area of spend was our Advertising
& Promotion (A&P) cost, a 25% saving against the prior year
representing a significant improvement on return on investment in this area.
One of the key reasons for this further focus on costs is to ensure money is
invested in the key area of recruitment and retention, where returns are more
immediate - aided by the brand building we have achieved since IPO in 2021.
This will remain the spend level, representing low double digit % of revenue
going forward.
Within Commission, the £0.5 million reduction year on year represents the
savings made through the
agreement regarding the SMWS America brand. As part of this re-alignment,
there is no commission agreement in place as we take on the employees of the
SMWSA business direct. The saving shown took effect from September 2024.
The net FX loss in year was £0.1 million, predominantly the impacts of USD.
For most of 2024 we chose not to hedge against our USD exposure, however in Q4
we did implement hedging of USD for FY25.
Administrative Expenses
The Overheads efficiency of £0.8 million represents management of key spend
areas including travel costs, professional fees and recruitment costs, the
latter a result of a more mature and stable employee base, our Culture and
Values and strong employee engagement scores resulting in low employee
turnover (outside our Venues) and significant improvement regarding direct
employment, building a stronger Employee Value Proposition as an employer of
choice within the locations we are based.
Another key reason is the first full year production of bottling within our
wholly-owned Masterton Bond supply chain facility - enabling efficiency
achievements and the cost allocation to cost of sales representing a full year
view as opposed to part year in 2023.
In Payroll, we are slightly up on 2023, £0.4 million of additional cost,
however, all of this additional cost, £0.4m, is related to the reinstatement
of a bonus for our employees. After bonus reinstatement, the payroll base was
largely flat on prior year, with the 3% inflation impact offset by vacancy
management and efficiencies made in the second half of the year.
Share member schemes and EPS
We have followed up the award of share options in 2023 with further options
within the scheme.
In 2024, 1,282,848 new share options were issued, consisting of time vesting
options for central office and venue staff. Senior Management options are all
performance related, based on revenue, EBITDA and share price.
Our Earnings per Share at the end of 2024 is (4.6p), (2023; (5.5p)).
Balance sheet strength supported by cash generation
Our balance sheet remains strong, with net assets of £15.1 million supported
by further gross investment in spirit and wood of around £2.9 million (2022:
£4.7 million).
The cash profile has changed within the business over the past 12 months,
notably the last 6 months, as we achieved EBITDA, managed our net working
capital and pivoted our position regarding cask spirit investment.
In the year, cash flow from operations was £0.8 million, a significant change
from prior year cash absorbed by operations of £4.3 million - reflected by
improved profitability alongside lower levels of investment in cask spirit,
£1.3 million, timing and collection of key US debtor, £1.3 million and
creditors timing and lower spend of £1.3 million
CapEx spend in year of around £0.9 million related to wood for cask spirit
and replacement of our EPOS system in our Venues, £0.8 million and £0.1
million respectively.
In 2024, we took the decision to put on the market the two owned SMWS
residential properties, recognising this is not a core part of our business
and a sale provided the opportunity to reduce our net debt. At the end of
2024, one of the two properties had been sold with cash proceeds received of
around £170,000, the term loan reduced by that value. The second sold in
March 2025, resulting in a further £280,000 loan repayment made as a result.
The business Net Debt at the end of 2024 stands at £25.5 million, a £1.5
million reduction on the FY24 H1 position, and we remain committed to making
further reductions in future years as the profitability growth alongside
reduced spirit and wood investment means we become more cash self-sufficient.
In October 2024, the current revolving credit facility (RCF) agreement with
The Royal Bank of Scotland was extended a further six months to June 2026.
Cask spirit valuation of £100m represents the inherent value of the business
Our cask inventory is held at cost in our Balance Sheet in line with
accounting guidelines, and at the end of December 2024 NBV was £27.8 million.
In June 2024, we carried out our first ever independent valuation exercise
with the purpose to more definitively state the inherent value of our cask
spirit holding, resulting in a valuation of £102 million at June 2024, around
4x the current NBV
This strong valuation highlights the delta that exists to our current market
capitalisation of less than
£24m and as we evidence this strong asset backing alongside profitable growth
and cash generation, we believe our market capitalisation growth will follow.
Confidence as we look ahead
Our ability to deliver EBITDA profitability and cash generation in FY24 serves
as a strong base to achieve our FY25 ambitions, grasping the opportunities
that exist within the Group: the significant size of the global Ultra-Premium
Scotch Whisky market ($7.1 billion), where our market share is only 0.4%,
growth in the USA, the largest Ultra-Premium Scotch Whisky market and where
SMWS America and Single Cask Nation are primed to deliver; increased
membership and engagement in the Europe region; continued growth in our
recently added strategic markets of Taiwan and Korea; and cask sales, both
trade and private.
Supporting the business' profitability ambition over the next 3 years is a
cost base that has achieved £1.6 million of efficiencies across Advertising
& Promotion (A&P), Commission, Payroll and Overheads in FY24. These
sustainable long term efficiencies support revenue and EBITDA growth and an
improving cash and net debt profile as we benefit from cash investments in
prior years and move to a cask spirit replenishment approach.
Following a successful year, and with the strategic plans in place over the
next 3 years, confidence remains high that we will meet the business and
financial objectives we have set ourselves.
Consolidated Statement of Comprehensive Income for the year ended 31 December
2024
Notes 2024 2023
£'000 £'000
Revenue 6 23,601 23,500
Cost of sales (8,576) (8,499)
Gross profit 15,025 15,001
Selling and distribution expenses (5,114) (6,238)
Administrative expenses (10,628) (10,901)
Finance costs 6 (2,461) (1,516)
Other income 9 36 79
Loss on ordinary activities before taxation 7 (3,142) (3,575)
Taxation 11 (109) (158)
Loss for the year (3,251) (3,733)
Other comprehensive income:
Items that may be reclassified to profit or loss:
Movements in cash flow hedge reserve - (8)
Movements in translation reserve (71) (64)
Tax relating to other comprehensive loss - -
(71) (72)
Total comprehensive loss for the year (3,322) (3,805)
Loss for the year attributable to:
- Owners of parent company (3,300) (3,848)
- Non-controlling interest 49 115
(3,251) (3,733)
Total comprehensive loss for the year attributable to:
- Owners of parent company (3,371) (3,920)
- Non-controlling interest 49 115
(3,322) (3,805)
Basic EPS (pence) 12 (4.6p) (5.5p)
Diluted EPS (pence) 12 (4.6p) (5.5p)
Consolidated Statement of Financial Position as at 31 December 2024
Notes 2024 2023
£'000 £'000
Non-current assets
Investment property 285 420
Property, plant and equipment 13 10,734 10,426
Intangible assets 14 2,352 2,389
13,371 13,235
Current assets
Inventories 15 31,768 30,564
Trade and other receivables 4,286 4,787
Cash and cash equivalents 2,868 1,235
38,922 36,586
Total assets 52,293 49,821
Current liabilities
Trade and other payables 3,459 3,216
Current tax liabilities 705 702
Financial liabilities 16 3,032 272
Lease liability 513 384
7,709 4,574
Net current assets 31,214 32,012
Non-current liabilities
Financial liabilities 16 25,938 23,809
Lease liability 2,920 2,575
Deferred tax liabilities - -
Provisions 670 589
Total non-current liabilities 29,528 26,973
Total liabilities 37,237 31,547
Net assets 15,056 18,274
Equity
Called up share capital 176 176
Share premium account 15,255 15,255
Translation reserve (211) (140)
Retained earnings (424) 2,789
Cash flow hedge reserve - -
Equity attributable to owners of the parent 14,796 18,080
Non-controlling interest 260 195
Net assets 15,056 18,275
Consolidated Statement of Changes In Equity For the year ended 31 December
2024
£'000 Called up share capital Share premium account Retained earnings Cash flow hedge Translation reserve Total controlling interest Non- Total
reserve
equity
controlling interest
Balance at 31 December 2022 174 14,997 6,685 8 (76) 21,788 228 22,016
Issue of share capital 2 258 - - - 260 - 260
(Loss)/profit for the period - - (3,848) - - (3,848) 115 (3,733)
Share-based compensation - - (48) - - (48) - (48)
Transactions with non-controlling interest - - - - - - 65 65
Dividend payable - - - - - - (213) (213)
Other comprehensive loss - - - (8) (64) (72) - (72)
Balance at 31 December 2023 176 15,255 2,789 - (140) 18,080 195 18,275
Issue of share capital - - - - - - - -
(Loss)/profit for the period - - (3,300) - - (3,300) 49 (3,251)
Share-based compensation - - 135 - - 135 - 135
Transactions with non-controlling interest - - (48) - - (48) 16 (32)
Other comprehensive loss - - - - (71) (71) - (71)
Balance at 31 December 2024 176 15,255 (424) - (211) 14,796 260 15,056
Consolidated Statement of Cash Flows For the year ended 31 December 2024
Notes 2024 2023
£'000 £'000
Loss for the year after tax (3,251) (3,733)
Adjustments for:
Taxation charged 109 158
Finance costs 2,293 1,415
Interest income (1) (4)
Movements in provisions 16 9
Share-based payments 135 (48)
Investment property fair value movement (20) (15)
Investment property gain on disposal (14)
Lease interest 151 101
Depreciation of tangible assets 13 1,308 1,171
Amortisation of intangible assets 321 282
Movements in working capital:
Increase in inventory (560) (1,863)
Decrease/(increase) in trade and other receivables 486 (1,073)
Increase/(decrease) in trade and other creditors 1 (700)
Cash flow from/(absorbed by) operations 974 (4,301)
Income taxes(paid)/received (104) 139
Interest paid excluding lease interest (1,676) (1,379)
Net cash outflow used in operating activities (806) (5,541)
Cash flow from investing activities
Purchase of intangible assets - (422)
Purchase of property, plant and equipment 13 (948) (1,657)
Sale of investment property 169
Sale of property, plant and equipment 13 19 23
Cash paid to acquire trade and assets of J&J Spirits 14 (238) -
Interest income 1 4
Net cash used in investing activities 997 2,052
Cash flows from financing activities
Share issue - 260
Transactions with non-controlling interest (16) 65
Dividend paid to non-controlling interest (213) -
Asset backed lending received 4,343 2,592
Repayment of asset backed lending (116) -
Inventory secured RCF facility 500 5,000
Loan received - 1,450
Repayment of loan (487) (2,336)
Repayment of leases (504) (461)
Net cash from financing activities 3,507 6,570
Net increase/(decrease) in cash and cash equivalents 1,704 (1,023)
Cash and cash equivalents at beginning of year 1,235 2,331
Foreign currency translation (71) (73)
Cash and cash equivalents at end of year 2,868 1,235
Relating to:
Bank balances and short term deposits 2,868 1,235
Notes to the Financial Statements
1) Basis of preparation
The condensed interim financial information presents the consolidated
financial results of The Artisanal Spirits Company plc and its subsidiaries
(together the "Group") for the twelve months ended 31 December 2024 and the
comparative figures for the twelve months ended 31 December 2023.
The Group's consolidated financial statements have been prepared on a going
concern basis under the historical cost convention; in accordance
with UK adopted International Accounting Standards.
This statement does not include all the information required for the annual
financial statements and should be read in conjunction with the Annual Report
& Accounts.
The financial information set out above does not constitute the company's
statutory accounts for 2024 or 2023. The statutory accounts for 2023 have been
delivered to the Register of Companies, and those for 2024 will be delivered
in due course. The independent auditor has reported on these accounts, their
reports were (i) unqualified, (ii) did not draw attention to any matter by way
of emphasis without qualifying their report and (iii) did not contain a
statement under section 498 (2) or (3) of the Companies Act 2006.
This announcement was approved on behalf of the Board on 28 March 2025.
2) Accounting Policies
The accounting policies applied in preparing the condensed consolidated
financial information are the same as those applied in the preparation of the
Annual Report and Accounts for the year ended 31 December 2024, and those
applied in the preparation of the Group's Historical Financial Information
included within the Company's Admission Document.
3) Going concern
The Directors are, at the time of approving the financial statements,
satisfied that the Group and Company have adequate resources to continue in
operational existence for a period of at least 12 months from the date of
approval of these financial statements. Thus, they continue to adopt the going
concern basis of accounting in preparing the financial statements.
The Group meets its day-to-day working capital requirements from a revolving
credit facility of £21.5m together with cash balances. The Group has further
access to a £15.0m inventory financing facility which can be drawn upon if
required. The revolving credit facility was renewed in December 2022 with an
extension in November 2024 and is not due for renewal until June 2026 whilst
the inventory financing facility has an evergreen term. The revolving credit
facility has quarterly leverage and covenants relating to minimum stock
holding level as a percent of the facility drawn down, the 'springing test',
which requires 135% of eligible inventory holding against the RCF balance,
reviewed monthly. Secondary covenants of EBITDA (Earnings before Interest,
Tax, Depreciation and Amortisation) and Net Assets (excluding Intangibles)
exist if the springing test is not met.
The Group remained compliant with its banking covenants throughout the year to
31 December 2024. The Directors have considered the availability of continued
financing beyond the current revolving credit facility's expiry in June 2026,
which is outside of the going concern measurement period. The Directors have
made enquiries and are satisfied that sufficient facilities are expected to
remain available on satisfactory commercial terms beyond this date.
In the context of the above, the Directors have prepared cash flow forecasts
for the period to 30 April 2026 which indicate that, taking account of
reasonably plausible downside scenarios, the Group will have sufficient funds
to meet its liabilities as they fall due for that period.
The Directors have assessed the potential future impacts of geopolitical risk
and have modelled scenarios as follows:
1. A base cash flow forecast. The 2025 figures in this forecast are based on
the Group's 2025 budget, which is compiled using board approved forecasts and
reflecting current performance, expected revenue growth and membership
retention. The 2026 figures in the base cash flow forecast are taken from the
Group's 3-5 year long range planning. This base case assumes a more prudent
growth trajectory than in previous years, with organic market growth rate at
single digit, supported by full year delivery of strategic initiatives
secured. Cost inflation has been considered and additional costs have been
included to account for increased wage.
2. A severe, but plausible downside scenario. The Directors have also prepared
a sensitised forecast which considers the impact of certain severe but
plausible downside events, when compared to the base case. This severe but
plausible downside scenario assumes a global economic downturn, exacerbated by
unexpected or additional tariffs alongside geopolitical shock events with a
resultant shut down of Asian operations impacting revenue in excess of £5m
per annum, together with an associated reduction in global sales based on
recent experience from other economic downturns. Under this scenario, one-off
costs to implement the required cost-base reductions are assumed in the
impacted markets.
In this scenario, capital expenditure has been reduced whereas investment in
spirit and wood continues on a replenishment basis. Throughout the severe but
plausible downside scenario the Group would remain within its facility limits
and in compliance with the relevant covenants, with further cash mitigation
opportunities available through capital expenditure, spirit and wood
investment.
The Directors are mindful of the potential impacts to macro-economic
conditions and further risk of disruption to supply chains that the ongoing
conflict in Ukraine presents, but after assessing the risks do not believe
there to be a material risk to going concern. The Directors have also
considered the potential impact on going concern from the potential imposition
of tariffs, and have mitigating plans to offset a material portion of the
potential impact. Based on the above, the Directors are confident that the
Group and Company will have sufficient funds to continue to meet their
liabilities as they fall due for at least 12 months from the date of approval
of the financial statements, and therefore the Directors believe it remains
appropriate to prepare the financial statements on a going concern basis.
4) Principal risks and uncertainties
The principal risks and uncertainties affecting the Group are separately
disclosed in the Annual Report & Accounts.
5) Dividends
No dividend was declared or paid during the period (prior period £nil).
6) Operating Segments
As the business has grown the level of information presented to the chief
operating decision maker has continued to develop to better support business
needs and inform decision making. The geographical markets in which the Group
operates are allocated to a business segment, consistent with the internal
reporting provided to the chief operating decision-maker.
The chief operating decision maker has been identified as the Board of
Directors, which is responsible for developing strategy and leading its
execution. The Board includes the Chief Executive Officer, Chief Financial
Officer, Chair and Non-Executive Directors.
The Group is organised in three distinct geographical segments for which
summarised management information is available to the Board plus a fourth
segment which makes up the rest of the world. These geographical markets as
set out in the table below represent the operating segments of the Group.
Australia, New Zealand and South Africa, which do not sit within the
identified geographical segments, are aggregated and presented within Other.
Whilst Central costs are not considered at an operating segment level, they
are reported to the Board and are included to aid reconciliation to the
Consolidated Statement of Comprehensive Income. Sales are allocated to the
geographical market in which the sale is fulfilled. The Board receives monthly
financial information to a Gross Profit level, in addition to Central Costs,
and utilise this information to monitor performance and allocate resources.
2024 Europe Asia Americas Other Group
£'000 £'000 £'000 £'000 £'000
Revenue 13,785 4,191 4,657 968 23,601
Cost of Sales (5,826) (1,243) (1,086) (421) (8,576)
Gross Profit 7,959 2,948 3,571 547 15,025
Selling & distribution costs (5,114)
Administrative costs (10,628)
Finance Costs (2,461)
Other income 36
Loss before tax (3,142)
Taxation (109)
Net Loss (3,251)
2023 Europe Asia Americas Other Group
£'000 £'000 £'000 £'000 £'000
Revenue 12,570 5,223 4,722 985 23,500
Cost of Sales (5,783) (1,415) (896) (405) (8,499)
Gross Profit 6,787 3,808 3,826 580 15,001
Selling & distribution costs (6,238)
Administrative costs (10,901)
Finance Costs (1,516)
Other income 79
Loss before tax (3,575)
Taxation (158)
Net Loss (3,733)
The Board does not receive a segmental breakdown of assets and liabilities,
depreciation or capital expenditure.
Within Europe, the UK represents the largest market, split UK Online and UK
Venues, delivering £3.2 million (2023: £3.5 million) and £4.1 million
(2023: £4.0 million), respectively.
In the Americas region, the largest market being the USA, shipment sales of
£4.0 million were 10% lower than the prior year (2023: £4.4 million), with
in-market depletions 9% lower than the prior year.
China represents the largest market in Asia, revenue in the year of £2.4
million (2023: £3.5 million) was a 30% decline on the prior year, impacted by
the economic headwinds within the market.
Other is predominantly represented by Australia, with revenue of £0.8 million
(2023: £0.8 million).
An analysis of the Group's revenue by product category is as follows.
2024 2023
£'000 £'000
Revenue from sale of whisky 18,291 18,161
Membership income 1,794 1,724
Revenue from sale of other spirits 125 143
Member rooms 2,218 2,244
Events and tastings 953 886
Other 220 342
Total revenue 23,601 23,500
Other includes revenue from sales of merchandise, rental income from
investment properties, shipping charges billed to customers, and income from
bottling services provided to third parties.
7) Loss on ordinary activities before taxation
The Group measures its performance using EBITDA and Adjusted EBITDA, which are
non-GAAP measures. EBITDA and adjusted EBITDA are reconciled to statutory loss
before tax as below:
2024 2023
£'000 £'000
Operating loss is stated after charging:
Amortisation of intangible assets 321 282
Depreciation on tangible assets 1,308 1,173
Cost of inventories recognised as an expense 6,000 5,759
Net foreign exchange loss 58 79
Reconciliation of adjusted EBITDA:
Loss on ordinary activities before taxation (3,142) (3,575)
Add back; Depreciation of tangible assets 1,308 1,173
Add back; Depreciation of production assets within cost of sales 123 106
Add back; Amortisation of intangible assets 321 282
Add back; Finance Costs - interest on loans 2,293 1,415
Add back; Finance Costs - leases 151 101
EBITDA 1,055 (498)
Exceptional and non-recurring costs - 647
Adjusted EBITDA 1,052 149
Adjusted EBITDA and loss for the year are stated after including £0.1m (2023:
£nil) of share based payment costs.
8) KPIs
Certain KPIs relating to membership are monitored by the Board and by
Management, as follows:
2024 Revenue(1) Year End Average Annual Annual Contribution/ Member £(2) Retention Expected LTV (Members)
£'000 Members Members Revenue/ % Years(3) £(4)
Member £
Europe 9,911 27,359 24,979 397 183 74% 3.9 705
Asia 4,166 5,455 5,265 791 552 75% 4.0 2,187
Americas 4,179 8,041 8,410 497 345 63% 2.7 943
Other 968 1,867 1,917 505 281 72% 3.5 997
Total 19,224 42,722 40,571 474 269 71% 3.4 927
Change vs prior year -9% 4% 5% -13% -11% -4% -12% -21%
2023 Revenue Year End Average Annual Annual Contribution/ Member £ Retention Expected LTV (Members)
£'000 Members Members Revenue/ % Years £
Member £
Europe 10,231 25,921 24,987 409 187 78 4.6 866
Asia 5,223 4,865 4,249 1,229 878 63 2.7 2,355
Americas 4,722 8,281 7,511 628 366 67 3.0 1,107
Other 977 1,977 1,958 499 291 70 3.3 970
Total 21,153 41,044 38,706 547 303 74 3.9 1,173
(1 Total revenue excludes sales totalling £4,377k (2023: £2,347k) which
relate to trade cask sales, JG Thomson and Single Cask Nation, and are
unrelated to membership proposition.)
(2 Contribution is a non-IFRS measure, and is defined by Management as Gross
Profit less Commission paid on sales (primarily in relation to the USA).)
(3 Expected Years is a non-IFRS measure, and is defined by Management as one
divided by one minus retention 1/(1-r%).)
(4 Lifetime Value (LTV) is a non-IFRS measure, and is defined as Annual Gross
Profit per member, multiplied by expected years.)
( )
9) Other operating income
2024 2023
£'000 £'000
Other income 36 79
36 79
Other income in 2024 and 2023 relate to refunds of previously overpaid
expenses in SMWS China.
10) Exceptional and non-recurring costs
2024 2023
£'000 £'000
Organisational restructuring costs - 418
Acquisition and transaction-related costs - 138
Masterton pre-operational costs - 91
- 647
In 2023 non-recurring costs comprised executive and senior management team
restructuring costs, pre-acquisition costs in relation to the Group's new
operations in Taiwan and the Group's acquisition of Single Cask Nation
subsequent to the year end, and costs relating to finalisation of the
Masterton Bond start-up which became operational in 2022.
11) Taxation
2024 2023
£'000 £'000
Current income tax
UK corporation tax
Adjustment in respect to prior periods - (45)
Foreign tax 109 203
Current tax charge - 158
Deferred tax
Deferred tax charge - -
Tax on ordinary activities 109 158
12) Earnings per Shares (EPS)
2024 2023
£'000 £'000
Earnings used in calculation (3,320) (3,848)
Number of shares 70,559,774 70,214,725
Basic EPS (p) (4.6p) (5.5p)
Number of dilutable shares 76,058,111 74,989,595
Diluted EPS (p) (4.6p) (5.5p)
All dilutable potential shares relate to share options. A loss per share is
not diluted. The number of shares and number of dilutable shares shown
represent the weighted average for the period.
13) Property, plant and equipment
Land and Land and Leasehold Fixtures, Cask wood Right-of use Total
buildings buildings improvements fittings and equipment £'000 asset £'000
freehold leasehold £'000 £'000 £'000
£'000 £'000
Cost or valuation
As at 1 January 2023 678 1,441 503 4,170 3,449 4,505 14,746
Additions - - - 817 840 - 1,657
Disposals - - - (25) - - (25)
As at 31 December 2023 678 1,441 503 4,962 4,289 4,505 16,378
Additions - - 25 144 779 1,159 2,107
Disposals - - - (19) - - (19)
As at 31 December 2024 678 1,441 528 5,087 5,068 5,664 18,466
Accumulated depreciation
As at 1 January 2023 181 1,097 306 1,172 493 1,135 4,384
Charge for the year 15 70 47 849 169 420 1,570
Released on disposal - - - (2) - - (2)
As at 31 December 2023 196 1,167 353 2,019 662 1,555 5,952
Charge for the year 15 53 51 844 237 579 1,779
As at 31 December 2024 211 1,220 404 2,863 899 2,134 7,731
Net book value
As at 31 December 2023 482 274 150 2,943 3,627 2,950 10,426
As at 31 December 2024 467 221 123 2,224 4,169 3,530 10,734
£226k (2023: £151k) of the depreciation charge for cask wood, £62k (2023:
£65k) of the depreciation charge for fixtures, fittings and equipment and
£66k (2023: £74k) of the depreciation charge for right-of-use assets have
been capitalised as costs of stock. The remaining balance has been expensed to
the Statement of Comprehensive Income.
Leases are in relation to the Group's supply chain facility at Masterton Bond,
the Group's Head Office in Edinburgh, and venues at Queen Street in Edinburgh
and Bath Street in Glasgow.
Right of use assets included in the Consolidated Statement of Financial
Position were as follows.
Venues Supply Head Total
Chain
office
Facility
As at 1 January 2023 1,332 2,038 - 3,370
Depreciation (187) (233) - (420)
As at 31 December 2023 1,145 1,805 - 2,950
Additions 75 - 1,084 1,159
Depreciation (201) (232) (146) (579)
At 31 December 2024 1,019 1,573 938 3,530
Lease Liabilities included in the Consolidated Statement of Financial Position
were as follows.
Venues Supply Head Total
Chain
office
Facility
As at 1 January 2023 1,279 2,040 - 3,319
Interest payment 51 50 - 101
Repayment of lease liability (199) (262) - (461)
As at 31 December 2023 1,131 1,828 - 2,959
Additions 37 - 789 826
Interest payment 63 44 44 151
Repayment of lease liability (249) (255) - (504)
At 31 December 2024 983 1,617 833 3,433
14) Business Combinations
On 3 January 2024 the Group acquired 100% of the trade and trading assets of
J&J Spirits, trading as Single Cask Nation. Single Cask Nation is a
US-based membership society that purchases single cask whiskies and other
spirits to distribute and sell direct to consumers and through retail and
distribution channels in the USA, UK, Germany, Sweden, Japan, Israel and
Canada.
Details of the acquisition are as set out below:
2024
£000
Purchase consideration:
Cash paid 160
Deferred consideration 307
467
Less: fair value of identifiable net assets acquired (248)
Intangible asset recognised 219
Goodwill recognised is attributable to the workforce assumed with the
acquisition, and synergies expected to be achieved as part of the Group.
Deferred consideration recognised is contingent upon the future revenue,
profitability and membership growth in the acquired business during the
financial years 2024 and 2025. This comprises a base earn out and stretch
target with the amount payable ranging from £nil to £397k. The deferred
consideration recognised on acquisition of £307k has been valued based on
forecast trading performance at the acquisition date; these forecasts remain
the basis for measurement as at the Balance Sheet date.
During the year to 31 December 2024, £78k of deferred consideration was
settled.
The fair value of net assets acquired comprise:
2024
£000
Cask whisky and other spirits 99
Bottled stock and other inventory 74
Customer list intangible 75
248
During the period, the acquired business contributed £684k revenue and £263k
profit before taxation. Had the business been under the Group's control from 1
January 2024, the Group's revenue and profit before tax would remain as
reported, due to the minimal time period between 1 January and the acquisition
date. As set out in Note 10, certain non-underlying costs incurred in 2023
related to this acquisition. Of the non-underlying acquisition and transaction
costs in the year ended 31 December 2023, £58k related to the completed
acquisition.
15) Inventories
2024 2023
£'000 £'000
Cask Goods 27,810 25,887
Bottled stock 2,515 3,092
Other inventory 1,443 1,585
31,768 30,564
The cost of inventories recognised as an expense during the year was £6,000k
(2023: £5,759k). The cost of inventories recognised as an expense includes
£39k (2022: £151k) in respect of write-downs of bottled stock and other
inventory.
Inventories with a carrying amount of £4,423k (2023: £795k) have been
pledged as security for certain of the Group's financing facilities.
16) Financial liabilities
2024 2023
£'000 £'000
Inventory Secured RCF 20,500 20,000
Inventory financing 7,505 2,628
Bank loans 950 1,418
Other loans 15 35
Total financial liabilities 28,970 24,081
Inventory secured RCF The revolving credit facility (RCF) is secured by a bond
and floating charge over eligible inventory within the Group. The availability
of funds under the facility agreement is linked to a calculation of eligible
inventory, which is predominantly the casked goods component of inventory
assets. In December 2022, the revolving credit facility was increased, as part
of the accordion element within the original contract, by £3m to £21.5m. The
loan is interest bearing and interest is due at a rate of 2.25% over the Bank
of England base rate, this new rate replacing the original rate of 2.5%. The
revolving credit facility has quarterly leverage and covenants relating to
minimum stock holding level as a percent of the facility drawn down, the
'springing test', which requires 135% of eligible inventory holding against
the RCF balance, reviewed monthly. Secondary covenants of EBITDA and Net
Assets (excluding Intangibles) exist if the springing test is not met. The
springing test has been met throughout the period. The Company has issued a
parental guarantee to SMWS in favour of the lender.
Inventory financing On 6 November 2023 the Group entered into a facility with
Ferovinum under which the SMWS subsidiary may raise finance of 60% to 80% of
current market value secured against cask spirit. The total available facility
is £15.0m with utilisation as at 31 December 2024 of £6.9m. The facility
carries interest on cash advanced at a rate of 2.25% over the Bank of England
base rate, settled on settlement of the principal. The total outstanding
balance is secured against cask inventory with a book (cost) value of
£4,423k. The Company has issued a parental guarantee to SMWS in favour of the
lender.
Bank loan The bank loan is secured by standard securities over the ground
floor premises of the Leith property and a legal charge over the Greville
Street property. The loan is interest bearing and interest is due at a rate of
2.5% over the Bank of England base rate.
17) Financial instruments - accounting classification and fair value
Financial assets
Trade and other receivables and cash and cash equivalents are classified as
financial assets at amortised cost.
Derivative assets are classified as financial assets measured at fair value
(level 2 - i.e. those that do not have regular market pricing) through the
Consolidated Statement of Comprehensive Income.
Financial liabilities
Trade and other payables (excluding deferred income) are classified as
financial liabilities and measured at amortised cost.
The fair value of both financial assets and financial liabilities have been
assessed and there is deemed to be no material difference between fair value
and carrying value.
Derivative liabilities are classified as financial liabilities measured at
fair value (level 2) through the Consolidated Statement of Comprehensive
Income.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR EAEDPAAASEAARecent news on Artisanal Spirits
See all newsREG - Artisanal Spirits Co - Publication of Annual Report and Notice of AGM
AnnouncementRCS - Artisanal Spirits Co - Investor Webinar
AnnouncementREG - AIM - AIM Notice - 04/04/2025
AnnouncementRCS - Artisanal Spirits Co - ASC enhances shareholder benefits programme
AnnouncementREG - Artisanal Spirits Co - PDMR Dealing and Exercise of Options
Announcement