TIDMART
RNS Number : 1151W
Artisanal Spirits Company PLC (The)
08 December 2023
8 December 2023
The Artisanal Spirits Company plc
("The Artisanal Spirits Company", "ASC" or "the Group")
Update on Trading and Strategic Initiatives
The Artisanal Spirits Company (AIM: ART), the owner of The
Scotch Malt Whisky Society ("SMWS" or "the Society"), the leading
curator and provider of premium single cask Scotch malt whisky and
other spirits for sale primarily online to a discerning global
membership, provides an update on trading, recent strategic
initiatives and operational progress.
Trading update:
The Group is pleased to announce that SMWS has now surpassed
40,000 members, a significant milestone in its 40(th) anniversary
year.
Our globally diversified footprint, growing membership and
pioneering model, combined with the demographics of our loyal and
engaged customers, position ASC well to continue to grow despite
wider macroeconomic market conditions. Whilst we remain confident
of the opportunity ahead, we have identified two areas that are
expected to challenge the current year result.
Our full year revenue is now expected to be around GBP23 million
(plus or minus 1%). This would represent mid to high single digit
full year revenue growth, with an acceleration in revenue growth in
H2-23, from the 3% delivered in H1-23, albeit below the current
consensus revenue forecast of GBP25 million.
Firstly, the expected strong uplift in revenue growth of 25%
during H2-23 v H2-22 may not be fully met due to weaker performance
in China in Q4-23 against strong double-digit growth in Q3-23 which
included a record performance in September. Secondly, the Group has
experienced a slower than anticipated rate of sales on the
brand-new 50(th) anniversary member cask sales programme launched
at the end of November; whilst generating a positive contribution
this year, sales will not be at the anticipated level by the 31
December 2023 year end.
Whilst sales and EBITDA have continued to grow year on year with
strong EBITDA growth in H2-23, Group Adjusted EBITDA* for H2-23 is
likely to be nearer to GBP2 million and therefore the Group will
record a result of around breakeven at an Adjusted EBITDA level for
FY23.
Looking forward, the Group remains confident that it can
continue to grow profitably with FY24 anticipated to deliver
revenue and Adjusted EBITDA similar to that which was previously
expected in 2023, with the phasing of growth therefore deferred by
a year.
Despite the two specific challenges listed above, other areas of
the Group continue to trade well and further progress on strategic
objectives has been made as detailed below. The Group's
stock-backed balance sheet is strong, even more so since recently
agreeing its partnership with Ferovinum which has allowed ASC to
convert maturing stock into a just-in-time asset at a truer
valuation without increasing its overall debt level, giving the
Group financial flexibility and optionality. Under the current
arrangement ASC can draw up to a further GBP12.4 million providing
ample cash and liquidity.
Update on Strategic Initiatives
Continued progress has been made on creating new revenue
streams:
Monthly subscription service: On 29 November, SMWS launched Drop
& Dram, its new whisky subscription pack which allows
non-members to 'try before they buy'. The GBP45 monthly
subscription comprises a carefully curated selection of 3x50ml cask
strength whiskies and membership benefits including access to
SMWS's four member rooms in London, Glasgow, and Edinburgh (Queen
Street and the newly refurbished Vaults venue in Leith), as well as
the opportunity to buy full-size 70cl bottles.
The Drop & Dram entry level subscription is designed to be a
recruitment tool and operates in addition to SMWS's core annual
membership offer of GBP85.
Membership and a Bottle: the Group also launched SMWS' new
Membership and a Bottle product in November to further improve its
value proposition for new members. Designed and launched in time to
capitalise on the all-important festive Christmas period, the gift
pack includes a personalised message and bottle of single-cask,
limited-edition whisky alongside an SMWS membership card and
12-month membership.
SMWS App: As part of the Group's strategy to further develop its
digital experience, a new SMWS mobile App has now been completed
and will be launched for members later this month.
40-year-old release: To celebrate four decades of creating
exceptional flavour experiences, SMWS released a specially curated
40-year-old anniversary edition, Cask No: 12.79. This "prestige"
product complements the existing Vaults Collection range and
further develops the Company's prestige pricing. This was released
in October and sold out in most markets in the first few days.
Confident for the future
Through 2023 the Group has continued to grow both revenue and
membership, as well as making good progress on its strategic
initiatives. These positive steps reinforce the Group's confidence
in its model and its ability to continue to grow profitably. The
Group is well financed for its future and remains set on a
transitional path to double digit EBITDA margin by FY26.
Andrew Dane, CEO of The Artisanal Spirits Company,
commented:
"Our business continues to develop and grow strongly with
successful strategic initiatives and membership growth driving
profitable sales. Whilst it is disappointing that our Q4 sales in
China and the sales rate of the brand-new cask programme have not
yet met anticipated levels, the remainder of the business has
performed well and grown in line with expectations and we are on
track to deliver substantial EBITDA growth in H2-23. Our model is
robust, throughout FY23 we have ensured that we have the right cost
base for the business, we are well financed and we remain confident
of future profitable growth."
* EBITDA Adjustments relate to exceptional and restructure costs
consistent with those disclosed in the Interim Results
The information contained within this announcement is deemed by
the Group to constitute inside information as stipulated under the
Market Abuse Regulation (EU) No. 596/2014 as it forms part of UK
domestic law by virtue of the European Union (Withdrawal) Act
2018.
For further enquiries:
The Artisanal Spirits Company plc via Instinctif Partners
Andrew Dane, Chief Executive Officer
Billy McCarter, Chief Financial Officer
Liberum Capital Limited (Nominated Tel: +44 (0) 20 3100 2222
Adviser and Broker)
Edward Thomas
Dru Danford
Miquela Bezuidenhoudt
Instinctif Partners (Financial PR) Tel: +44 (0)20 7457 2020
Justine Warren
Matthew Smallwood
Joe Quinlan
About The Artisanal Spirits Company
The Artisanal Spirits Company (ASC) are curators of the world's
favourite, single-cask and limited-edition whisky.
Based in Edinburgh, ASC owns The Scotch Malt Whisky Society
(SMWS) which was established in 1983 and currently has a growing
worldwide membership of over 40,000 paying members.
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, with current
stocks sourced from over 100 distilleries in 20 countries and
expertly curated with diligence and care.
Since producing the Society's very first cask, we have 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 limited-edition and small-batch
spirits brands for a global movement of discerning consumers -
delivering c.GBP22 million 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.
ASC has a pioneering business model, a substantial and growing
addressable market presenting a long-term global growth opportunity
and a strong and resilient business primed to deliver growth.
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END
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