The Artisanal Spirits Company, which owns The Scotch Malt Whisky Society (SMWS), Single Cask Nation, and J.G. Thomson, has released its financial results for the first half of 2024. The company reported a £1 million improvement in earnings before interest, tax, depreciation, and amortisation (EBITDA) – down to -£1m from -£2m last year – despite relatively flat revenue compared to last year at £10.1m. This growth in EBITDA was driven by a 4% increase in SMWS memberships, bringing the total to 40,300 members, and cost savings of £750k. These efficiencies led to a £250k, 2ppt, increase in gross profit margins.
The company expanded into new markets, such as Taiwan and Korea, to combat the economic challenges in China and saw growth in cask sales following the acquisition of Single Cask Nation. An independent valuation of the company’s cask spirits in June placed their value at over £100 million, which is around four times their current net book value.
The company reported that, thanks to significant investments in their cask inventory, it now has enough stock to meet demand through the next decade which has improved cash flow, and the company’s net debt has also reached its peak as they shift from major investments in inventory to a replenishment strategy.
Looking ahead, the company plans further international expansion in the second half of the year. They will release two new Scotch Malt Whisky distillery products and refresh their product line to keep up with consumer trends, including the launch of the ‘Creators’ Collection’ and the 2024 ‘Winter Series.’
The company expects to maintain the improved profitability from the first half of the year, supported by consistent revenue from core markets, planned shipments to the U.S., and continued cask sales.
Andrew Dane, CEO of Artisanal Spirits Company, said, “We have delivered a creditable performance and made good progress on our journey towards profitability despite challenging trading conditions prevailing in some markets. We continue to focus on attracting and retaining higher quality members, whilst maintaining a well-controlled cost base.
“Our proven strategy of investing in whisky stock has built an impressive inventory to satisfy our requirements well into the next decade, as well as delivering a significant uplift in value creation, with the current cask value of just over £100m. Correspondingly, the Group now only needs to acquire stock on a replenishment basis, thereby significantly improving the future cash profile of the business.
“Single Cask Nation has integrated well and is performing to expectation. Our revenue streams and the geographies in which we operate are becoming increasingly diverse, further limiting our exposure to any given market. This together with the actions we’re taking now are building this unique business for the longer term to the benefit of all shareholders.
“We enter H2 with a clear strategy, a focus on delivery of the key drivers of profitability in the year across cask sales and US shipments and remain confident of meeting FY24 EBITDA expectations.”
