TIDMART
RNS Number : 9302L
Artisanal Spirits Company PLC (The)
16 September 2021
16 September 2021
The Artisanal Spirits Company plc
("The Artisanal Spirits Company", "ASC", "the Company" or "the
Group")
Half Year Results
Strong trading and well-positioned to deliver full year
performance in line with market expectations
The Artisanal Spirits Company (AIM: ART), the owner of The
Scotch Malt Whisky Society ("SMWS"), the leading curator and
provider of premium single cask Scotch malt whisky and other
spirits for sale primarily online to a discerning global
membership, is pleased to announce its half year results for the
six months ended 30 June 2021.
Financial highlights:
-- Revenue increased 20% to GBP7.9m (H1 2020: GBP6.6m), slightly
ahead of management's expectations
o Strong international sales growth, particularly in the US with
performance boosted by the suspension of US tariffs on imports of
single malt Scotch whisky in March 2021
o Recovery in UK venue & events sales following phased
reopening in Q2
o Excluding UK venues & events, Group revenue grew by
25%
-- Gross profit increased 31% to GBP5.1m (H1 2020: GBP3.9m).
This resulted from the revenue volume growth, as well as the gross
margin improvement to 65% (H1 2020: 59%), which reflected the
positive impact of the suspension of US tariffs
-- EBITDA before exceptional costs ("Adjusted EBITDA") of
GBP0.2m (H1 2020: GBP0.0m), with planned ongoing investment for
growth largely offsetting the increase in gross profit
-- Loss after tax of GBP1.1m (H1 2020: loss of GBP0.7m), a
slight improvement on management's expectations at the time of
IPO
-- The Group's net debt position as at 30 June 2021 improved to
GBP1.9m (31 December 2020: GBP13.7m) reflecting the proceeds from
the IPO
GBP'm 6 months 6 months % change
to 30 June to 30 June
2021 2020
Total sales 7.9 6.6 20%
------------ ------------ ---------
Gross profit 5.1 3.9 31%
------------ ------------ ---------
Gross margin 65% 59% 6ppt
------------ ------------ ---------
Adjusted gross profit* 5.1 4.3 20%
------------ ------------ ---------
Adjusted gross margin* 65% 65% -
------------ ------------ ---------
Adjusted EBITDA 0.2 0.0 nm
------------ ------------ ---------
Net Debt (1.9) (13.7) nm
------------ ------------ ---------
*Excluding the impact of US tariffs
Operational highlights:
'000s 30 June 2021 31 December % change
2020
UK members 13.4 13.7 (2%)
-------------- ------------ ---------
International members 15.3 14.6 4%
-------------- ------------ ---------
Total members 28.7 28.3 1%
-------------- ------------ ---------
-- Successful admission to AIM in June 2021, raising GBP15m of proceeds for the Company
-- Continued strong international member growth
-- Following the decline in UK member numbers during Q1, four
consecutive months of UK member growth to period end:
o Q2 UK recruitment more than double that of the corresponding
period in the prior year
-- Demand from European members remained robust, despite Brexit related challenges
-- Over GBP1m investment in spirit stock post-Admission,
continuing to build on the Group's vast and unique range of
outstanding single cask Scotch malt whiskies
-- Record number of awards across this year's International Wine
& Spirits Competition and Ultimate Spirits Challenge, two of
the most prestigious competitions in the global whisky calendar
-- Bottled more product in the first six months of 2021 than in
the entirety of 2019 (and up by almost 60% on H1-20), positioning
the Group well to meet growing demand
-- Key senior hires made including new Marketing and e-Commerce
Director (non-board position) and completion of the Group's company
culture project, helping to codify and communicate the Company's
purpose, ambition and values.
Post-period highlights:
-- Growing demand and trading momentum in international markets
and continuation of strong progressive recovery in UK venue &
events give confidence in ability to meet market expectations for
the full year
-- Total membership up 4% (International +6% and UK +2%) in the
eight months to August 2021 (29,400) with:
o Focus on high growth high margin markets (China +25% and US
+13%)
o Continued rebound in UK member numbers now up 9% from the low
point in Q1.
-- Continued decisive progress against strategic objectives outlined at IPO
o Ongoing material investment (over GBP1m) in spirit and cask
wood. The Group now holds 100% of the stock we plan to sell through
to the end of 2026 (up from 95% at the time of the IPO).
o Heads of terms agreed for 10-year lease of new facility as
part of the Group's strategy to improve margins by in-sourcing more
elements of its supply chain
o First orders for JG Thomson, the Group's new blended malt
Scotch whisky brand, from wholesale customers and the
direct-to-consumer e-commerce website
-- Record number of awards across this year's Spirits Business'
Luxury Masters, including a top prize and three gold medals for the
Group's new JG Thomson range
David Ridley, Managing Director of the Company, said:
"Momentum in key international markets continues to build on the
back of growing demand for our products and we have seen a strong
and sustained recovery in UK venue & events sales since their
phased reopening from COVID from mid-May onwards, giving us
confidence in meeting market expectations for the full year. While
Brexit continues to present some logistical challenges for exports
to certain EU markets, we continue to work through them.
From an operational perspective, we continue to make decisive
progress against the strategic objectives outlined at the time of
IPO, with ongoing material investment in spirit and cask wood and
good progress with our new supply chain facility, standing us in
excellent stead for the future.
We are still at the very beginning of our journey as a listed
company, but we have made a bright start. Against a backdrop of
favourable market trends, we are optimistic about our ability to
realise our growth ambitions to double ASC sales between 2020 and
2024, and we look forward to keeping shareholders updated as we
work to deliver long-term value."
Investor presentation
The Company is hosting a live private investor presentation on
Friday 17 September 2021 at 1:00pm BST. All existing and potential
private investors interested in attending are asked to sign up to
Investor Meet Company via the following link:
https://www.investormeetcompany.com/the-artisanal-spirits-company-plc/register-investor
A video overview of the results from the Managing Director,
David Ridley, and Finance Director, Andrew Dane, is available to
watch here:
https://www.fmp-tv.co.uk/2021/09/15/artisanal-spirits-interim-results/
Enquiries:
The Artisanal Spirits Company plc via Alma PR
David Ridley, Managing Director
Andrew Dane, Finance Director
Singer Capital Markets (Nominated Adviser Tel: +44 (0) 20 7496 3000
and Sole Broker)
Sandy Fraser
Rachel Hayes
George Tzimas
Asha Chotai
Alma PR (Financial PR) Tel: +44 (0)20 3405 0205
Josh Royston artisanalspirits@almapr.co.uk
David Ison
Harriet Jackson
Molly Gretton
About The Artisanal Spirits Company
Artisanal Spirits Company (ASC) is based in Edinburgh. It owns
The Scotch Malt Whisky Society (SMWS) which was established in 1983
and currently has a growing worldwide membership of over 29,000
paying subscribers.
Harnessing the experience of some of the most knowledgeable
stewards in the industry, 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. In 2020 over 85% of
Group revenue was generated online, whilst 9% was generated through
SMWS's four UK venues.
Having initially proven its premium experience model in the UK,
SMWS is now able to offer its unrivalled breadth of distinguished
flavours to an expanding international market, with 69% of 2020
sales from outside the UK. SMWS has a growing presence in the key
global whisky markets of UK, China, USA and Europe.
ASC is building a portfolio of premium brands that bring
together some of the world's best producers with a growing movement
of discerning consumers by curating unrivalled collections of craft
spirits.
Chairman's Review
Introduction
I'm delighted to be able to introduce our first set of results
post IPO and to report on a strong first half which has delivered
results which exceeded management's expectations. Given the
challenges presented by the ongoing pandemic and the impact that it
has had on our venues as well as those posed by Brexit, this is a
creditable performance and one which bodes very well for the
future. We have successfully grown in the most important global
whisky markets while remaining true to our ethos and core
values.
IPO
The Company's successful IPO and Admission to trading on AIM was
a significant milestone in our history, raising GBP15 million of
new funds to support the Company's growth strategy. We were
thrilled to welcome new shareholders, both institutional and
retail, including a large number of members of the Scotch Malt
Whisky Society. The SMWS is the lifeblood of ASC and in my short
time as Chairman, I have been overwhelmed by members' understanding
and passion for single malt Scotch whisky and their joy of sharing
that enthusiasm with others. I look forward to meeting many more of
them - both online and in venues - as we continue to emerge from
lockdown restrictions. The funds raised at IPO will enable us to
make their experience greater still and we have made a very strong
start, investing over GBP1 million in new whisky stocks and
securing a greater inventory of casks. Since the period end we have
invested a further GBP1 million into new whisky stocks and also
agreed heads of terms on a new supply chain facility, thereby
giving us greater control of our supply chain and providing margin
contribution over time.
Awards
We were also delighted that a number of our unique whiskies won
awards throughout the year, with record performances at some of the
most prestigious competitions, continuing our strong tradition and
reflecting the sheer expertise of our curation team which is
integral to all that we do. The quality of the SMWS product is the
single greatest reason why our membership continues to grow and why
our retention rates are so high and it is a great credit to the
team that they continue to achieve universal recognition for our
outstanding whiskies.
People
The IPO would not have been possible were it not for the hard
work and commitment of our staff, against the very difficult
backdrop of the pandemic, and on behalf of the Board I would like
to offer them my sincere thanks. David Ridley has built a strong
team who are clearly passionate about the experiences that we
create and it is that passion, combined with the diligence they
have shown, which will help us to achieve our growth ambitions. We
have invested further in people through the first half, including a
new Marketing and e-Commerce Director and, post-period, a new
Company Secretary and Legal Counsel. I have thoroughly enjoyed the
first few months of working with my new Board colleagues and I am
fortunate to be able to draw on the experiences of those who have
been at the helm before me. I believe we have the right blend of
knowledge and experience to take full advantage of the opportunity
ahead.
Managing Director's Review
Introduction
To have delivered such a strong trading performance against a
backdrop of pandemic and Brexit-related logistical and
administrative challenges whilst also preparing the business for
life as a quoted company is testament to the hard work and resolve
of our teams and I would like to personally thank them for their
efforts.
At the heart of our success, as in previous periods, has been
our ability to consistently deliver to our members experiences of
the very highest quality and a range of genuinely unique single
malt Scotch whiskies that live long in the memory. With the funds
raised at IPO, we have the means to take our offering to the next
level, providing members with an even greater variety of
limited-edition spirits, which is an exciting prospect.
We have proven strategies for growth both in our UK home market
and internationally, underpinned by first-class e-commerce
capabilities and set against a global backdrop of growing interest
in premiumisation, particularly in our chosen whisky markets.
Looking ahead, we will need to continue to navigate the challenges
we are facing - particularly where Brexit is concerned - but the
situation is getting progressively better, and with momentum in
trading and member numbers growing, I am optimistic about our
ability to meet our ambitions for the second half and beyond.
Strategic progress
The Group has already made excellent progress against the
strategic objectives outlined at IPO, particularly in acquiring
more spirit and cask wood. Since IPO, we have invested over GBP2m
in new spirit from some of the world's leading distilleries, around
GBP250k in new cask wood (in particular sherry seasoned casks). The
Group has also accelerated our bottling output and by the end of
June 2021 we had already bottled more product in 2021 than we did
in all of 2019 (and by the end of August had produced as much as
during 2020). This puts us in a strong position to take advantage
of growing demand across our markets, benefiting members and
investors alike.
Post-period, as part of our strategy to improve the margin
profile of the Group by in-sourcing more of elements of our supply
chain, we agreed heads of terms on a 10-year lease for a new supply
chain facility. Design work and the process of sourcing equipment
is currently underway, with the installation scheduled to begin at
the start of 2022. The facility is expected to become fully
operational later that year.
As stated at IPO, a key facet of our long-term growth strategy
is to extend our addressable market by launching complementary but
independent brands. Production of the first 10,000 bottles of JG
Thomson, the Group's new blended malt Scotch whisky brand, has been
completed, with the first orders from wholesale customers and the
direct-to-consumer e-commerce website having been placed. The
consumer launch marketing campaign is ready and expected to launch
imminently. JG Thomson will not operate under a membership model -
in addition to a direct-to-consumer e-commerce offering, it will
also be available through traditional channels such as third-party
outlets.
Member digital engagement, which developed considerably during
the pandemic, continues to be a major strategic focus for the
Group. For the majority of our members, it remains the primary
means of engagement, and so we continue to proactively explore new
and innovative ways to enhance their experience. As restrictions
ease and we ramp up the level of in-person engagement, activities
such as online tastings will remain a core part of our
offering.
Financial Review
We delivered strong revenue growth of 20% in the first half
versus the prior year, slightly ahead of management's expectations
at the time of IPO. This represented a continuation of the
Company's track record of consistent growth with total sales in the
six-month period growing to GBP7.9 million (H1 2020: GBP6.6m).
International sales grew by 24% to GBP5.7m (H1 2020: GBP4.6m),
supported by faster rates of growth in both the US and China, the
Group's key international markets. UK revenue grew by 12% to
GBP2.3m (H1 2020: GBP2.0m), with 28% growth in UK online sales more
than offsetting the negative impact of COVID-19 on venue sales (in
particular during Q1). UK venue & events sales have experienced
a recovery following the phased reopening in Q2.
Reported gross profit increased 31% to GBP5.1m (H1 2020:
GBP3.9m). This primarily reflected the positive impact of the
suspension of US tariffs on imports of Scotch whisky in March 2021.
There were no tariff costs incurred in H1 2021 versus a negative
GBP0.4m impact on H1 2020. The H1 2021 gross margin of 65% in part
reflects the timing of high margin US shipments. Full year FY21
margin is expected to move to nearer the FY 2020 adjusted gross
margin of 63%.
Adjusted EBITDA increased to GBP0.2m in H1 2021 (versus a small
loss in H1 2020) with an increase in administrative expenses
offsetting much of the gross profit increase. This reflects ongoing
investment across the Group, particularly in people and systems, to
help support the continued growth of the business. There were also
some additional costs incurred at the time of the IPO which were
not deemed to be exceptional in nature (for example the employers
national insurance costs on the exercise of employee options).
Exceptional costs of GBP0.5m in the period related entirely to
legal/professional and other fees associated with the IPO. Overall
this resulted in a loss for the period of GBP1.1m (H1 2020: loss of
GBP0.7m). This was again a slight improvement on management's
expectations at the time of the IPO. The growth strategy remains
focussed on delivering both revenue volume and gross margin
improvement to deliver profitability in the medium term.
Total cash absorbed by operations during H1 2021 was GBP2.4m (H1
2020: GBP0.9m). This increase reflected three key factors, namely
the exceptional IPO costs, material investment in new spirit stock
(in particular post-IPO, with over GBP1m investment in spirit stock
in the latter part of June) and the growth in US debtor balances,
reflecting the timing of significant shipments to the US in the
latter part of the period. Excluding exceptional costs and working
capital movements, the operational cash inflow in H1 2021 was
GBP0.4m (H1 2020: GBP0.0m).
During the period, the net increase in cash and cash equivalents
was just over GBP1.0m to GBP3.3m. While total financial liabilities
reduced by GBP10.7m from GBP15.9m to GBP5.2m, these liabilities
primarily related to the inventory-secured RCF facility (GBP4.1m at
30 June 2021). The previous asset-based lending facility (GBP14.8m
at 31 December 2020) was available to drawdown or repay on demand
and was repaid in full from a new inventory-secured RCF facility
during January 2021. As noted in the Company's Admission Document,
pending deployment of the proceeds of the fundraising, the proceeds
have initially be applied towards reducing outstanding Group
borrowings, with the GBP18.5m inventory secured RCF available for
utilisation when required.
Operational Review
GBP'm 6 months 6 months % change
to 30 June to 30 June
2021 2020
UK online sales 1.7 1.3 28%
UK venue & events
sales 0.6 0.7 (17%)
International sales 5.7 4.6 24%
Total sales 7.9 6.6 20%
NB - figures are shown to the nearest GBP0.1m and therefore
totals may appear not to sum
International
SMWS has a growing presence across key international whisky
markets including the US, China, Japan and Australia as well as a
number of major European markets such as France, Germany and
Sweden.
Pleasingly, international sales grew 24% against the
corresponding period last year to GBP5.7m (H1 2020: GBP4.6m),
accounting for 71% of total sales in the first half (H1 2020: 69%).
International membership growth was also encouraging, growing 4% to
approximately 15,300 (H1 2020: 14,600).
Our strongest territory in the half by sales performance was the
US. The US is the largest market in the world and although we are
making excellent headway there, we are still only scratching the
surface in terms of market penetration. In June, we were buoyed by
the US Government's decision to extend the suspension of tariffs on
imports of Scotch whisky for a period of five years. This allows us
to plan with much greater certainty, as well as having a positive
impact on profitability with the Group having budgeted to absorb
those costs.
Revenues from China also continued their upward trend.
Optimising our route to market and consumer accessibility in the
territory has been a key strategic focus, and we are now seeing the
benefits of the partnerships we established with purchasing
platforms in prior periods filter through strongly both from a
sales and member recruitment perspective.
Australia was a stand-out success story for us during the half.
We have now transitioned from a franchise model to a wholly-owned
subsidiary and, although from a low base, Australia was our best
performing market by sales growth. We are also excited about the
launch of two unique whiskies created and curated in the territory.
The first batch will be released in October 2021 whilst the second
will be made available to Australian SMWS members in early 2022.
This is the first time that we have bottled Australian single malt
whisky in Australia and, if successful, is an initiative that we
will look to recreate in other geographies.
In our EU markets, while order demand across the continent as a
whole remained steady, as with many UK-based businesses exporting
into the EU, we have not been immune to the logistical impacts of
Brexit. The bureaucracy associated with exporting products to the
EU post-Brexit - particularly where alcohol is concerned and each
bottling is considered unique - caused some shipment delays in the
half. We also experienced a delay in launching our new dedicated EU
website as we waited for clarification on its requirements, which
impacted sales in the first month of the year.
Delivering the very best experience to our members is central to
everything we do, and to that end our teams have worked tirelessly
to anticipate and address issues, ensuring disruption is kept to a
minimum. Being largely unchartered territory, it has been a
learning process, but we have adapted well and continue to make
headway in enhancing and streamlining our EU export operations. As
we move through the second half, we are investigating ways to
improve availability of stock and the accuracy of estimated
delivery times for our members on the continent. This will remain a
key strategic focus in the second half. We are incredibly grateful
to our members in the affected EU countries, who have shown
exceptional patience and understanding.
UK
Overall UK sales in the first half were up 12% on the
corresponding period in 2020.
UK online sales grew 28%. While lockdown conditions in the first
quarter of 2021 meant sales were up dramatically on the
corresponding period in 2020 (pre-pandemic) as people pivoted to
digital, encouragingly, we saw double-digit growth maintained in
the second quarter even as restrictions eased.
As expected, UK venue & events sales were down 17% in the
period as a result of government-mandated closures during the first
quarter. Pleasingly, as we predicted at the time of IPO, we saw a
progressive recovery following a phased reopening of venues in the
second quarter, and trading has continued to improve subsequently
in line with management's expectations.
For similar reasons, UK member numbers were down 2% at 30 June
2021 compared to 31 December 2020. Venues have historically been a
key recruitment channel for SMWS - in 2019 approximately 1,000 new
members joined in-venue - so the closures in the first quarter have
had a negative impact. In the second quarter of 2021, as venues
began to re-open, we saw recruitment more than double versus the
second quarter of 2020, with increased sign-ups both in our venues
and online and by 31 August 2021, UK member numbers were up by 4%
vs the 30 June 2021 position and 2% vs the 31 December 2020
position.
While we expect the revenue mix in the UK will continue to shift
and change as conditions normalise, we continue to see strong
growth momentum across both online and in venue, giving us
confidence in our ability to make further progress in our home
market in the second half and beyond.
Product innovation
Flavour profiling is integral to the Group's proposition and is
why whisky lovers choose to become SMWS members. We are obsessed
with delivering unique whisky experiences that encompass flavour,
variety and quality, and are constantly striving for perfection. In
the first half of 2021, we were delighted to receive a record
number of awards across this year's International Wine &
Spirits Competition and Ultimate Spirits Challenge, two of the most
prestigious competitions in the global whisky calendar.
Post-period, we had our best ever Spirits Business' Luxury Masters
event, taking home a top prize and three gold medals for the
Group's new JG Thomson range. This success provides further
evidence that the Group's innovative whiskies are among the best in
the world. With the funds secured from the IPO, we are working on
many and various new and exciting whiskies and experiences for
members, and I'm excited to see how they're received in the coming
months.
Current trading and outlook
Momentum in our international markets continues to build on the
back of growing demand for our products and we have seen a strong
and sustained recovery in UK venue & events that has continued
into the second half, giving us confidence in meeting market
expectations for the full year.
While Brexit continues to present some logistical challenges for
exports to certain EU markets, we continue to work through
them.
From an operational perspective, we continue to make decisive
progress against the strategic objectives outlined at the time of
IPO, with accelerated membership acquisition versus the first half,
ongoing material investment in spirit and cask wood and good
progress with our new supply chain facility standing us in
excellent stead for the future.
We are still at the very beginning of our journey as a listed
company, but we have made a bright start. Our strategic ambition is
to double ASC sales between 2020 and 2024 and, against a backdrop
of favourable structural market trends, we are optimistic about our
ability to realise that ambition. We look forward to keeping
shareholders updated as we work to deliver long-term value.
The Artisanal Spirits Company plc
Consolidated Statement of Comprehensive Income
For the period ended 30 June 2021
6 months 6 months Year Ended
to to
30 June 30 June 31 December
2021 2020 2020
GBP'000 Notes (Unaudited) (Unaudited) (Audited)
Continuing operations
Revenue 6 7,946 6,614 15,026
Cost of sales (2,816) (2,696) (6,222)
Gross Profit 5,130 3,918 8,804
------------ ------------ ------------
Selling & Distribution expenses (1,534) (1,466) (2,979)
Administrative expenses (4,451) (3,110) (6,938)
Finance costs (237) (232) (499)
Other income 7 151 216 410
Loss on ordinary activities before
taxation 8 (941) (674) (1,202)
------------ ------------ ------------
Taxation 10 (147) (54) (418)
Loss for the
period (1,088) (728) (1,620)
------------ ------------ ------------
Other comprehensive income:
Item that will not be reclassified
to profit or loss:
Movements in cash flow hedge reserve (56) (31) 51
Tax relating to other comprehensive
profit/(loss) 11 5 (11)
(45) (26) 40
------------ ------------ ------------
Total comprehensive loss for the
period (1,133) (754) (1,580)
============ ============ ============
Loss for the period attributable
to:
* Owners of parent company (1,198) (916) (1,688)
* Non-controlling interest 110 188 68
(1,088) (728) (1,620)
------------ ------------ ------------
Total comprehensive loss for the period
attributable to:
* Owners of parent company (1,243) (942) (1,648)
* Non-controlling interest 110 188 68
(1,133) (754) (1,580)
------------ ------------ ------------
Basic EPS (pence) 11 (1.8p) (1.8p) (3.0p)
------------ ------------ ------------
Diluted EPS (pence) 11 (1.8p) (1.8p) (3.0p)
------------ ------------ ------------
The Artisanal Spirits Company plc
Consolidated Statement of Financial Position
For the period ended 30 June 2021
As at As at
31 December
30 June 2021 2020
GBP'000 Notes (Unaudited) (Audited)
Non-current assets
Investment property 391 391
Property, plant and equipment 5,658 5,785
Intangible assets 2,555 2,599
8,604 8,775
------------- ------------
Current assets
Inventories 22,967 21,651
Trade and other receivables 3,036 1,956
Forward currency contracts 28 83
Cash and cash equivalents 3,311 2,176
29,342 25,866
------------- ------------
Total assets 37,946 34,641
------------- ------------
Current liabilities
Trade and other payables (3,311) (3,157)
Current tax liabilities (418) (332)
Financial liabilities 12 (133) (14,963)
Lease liability (144) (139)
(4,006) (18,591)
------------- ------------
Net current assets 25,336 7,275
------------- ------------
Non-current liabilities
Financial liabilities 12 (5,031) (901)
Lease liability (1,354) (1,428)
Deferred tax liabilities (313) (324)
Provisions (405) (404)
------------- ------------
Total non-current liabilities (7,103) (3,057)
------------- ------------
Total liabilities (11,109) (21,648)
------------- ------------
Net assets 26,837 12,993
============= ============
Equity
Called up share capital 174 135
Share premium account 14,938 99
Translation reserve (53) (15)
Retained earnings 11,482 12,544
Cash flow hedge reserve 22 67
Other reserves/Options reserve - -
Equity attributable to parent company 26,563 12,830
============= ============
Non-controlling interest 274 163
Net assets 26,837 12,993
============= ============
The Artisanal Spirits Company plc
Consolidated Statement of Cash Flows
For the period ended 30 June 2021
6 months 6 months Year Ended
to to
30 June 30 June 31 December
2021 2020 2020
GBP'000 (Unaudited) (Unaudited) (Audited)
Loss for the period after tax (1,088) (728) (1,620)
Adjustments for:
Taxation charged 147 54 418
Finance costs 237 232 499
Interest receivable - - (19)
Movement in provisions (33) 12 2
Share based payments 111 - 51
Depreciation of tangible assets 327 310 683
Amortisation of intangibles assets 128 128 283
Profit/loss on disposal of assets - (1) 250
Movement in working capital:
(Increase)/decrease in stocks (1,317) 136 (698)
(Increase)/decrease in debtors (1,532) 125 591
Increase/(decrease) in creditors 647 (1,165) (655)
Cash absorbed by operations (2,373) (897) (215)
------------ ------------ ------------
Income taxes paid (135) (54) (327)
Interest paid (233) (232) (477)
Net cash outflow from operating
activities (2,741) (1,183) (1,019)
------------ ------------ ------------
Represented by:
Operating cashflows before working
capital movements 345 41 939
Net movement in working capital (2,202) (904) (762)
Income tax and interest payments (368) (286) (804)
Exceptional costs (516) (34) (392)
------------ ------------ ------------
Net cash outflow from operating
activities (2,741) (1,183) (1,019)
-------------------------------------------- ------------ ------------ ------------
Cash flow from investing activities
Purchase of intangible assets (87) (175) (437)
Purchase of property, plant and
equipment (199) (445) (660)
Purchase of investment property 2 - -
Proceeds received on sale of fixed
assets - 6 1
Interest receivable - - 19
Net cash used in investing activities (283) (614) (1,077)
------------ ------------ ------------
Cash flows from financing activities
Asset backed lending drawn down (10,724) 2,154 1,980
Dividends paid - - (254)
Loan received 93 54 214
Repayment of loan (71) (41) (103)
Share issue 14,878 - 991
Repayment of lease (69) (73) (125)
Net cash from financing activities 4,107 2,094 2,703
------------ ------------ ------------
Net increase in cash and cash equivalents 1,083 297 607
------------ ------------ ------------
Cash and cash equivalents at beginning
of period 2,176 1,536 1,536
Reserve movements 52 38 33
Cash and cash equivalents at end
of period 3,311 1,871 2,176
The Artisanal Spirits Company plc
Consolidated Statement of Changes in Equity
For the period ended 30 June 2021
Cash
Called Share flow Total
up share Premium Retained hedge Translation controlling Non-controlling Total
GBP'000 capital account earnings reserve reserve interest interest equity
Balance as at
31 December
2019 131 15,980 (2,687) 27 (48) 13,403 349 13,752
Issue of share
capital 3 - - - - 3 - 3
Loss for the
period - - (916) - - (916) 188 (728)
Dividend paid - - - - - - - -
Other
comprehensive
gain - 22 (19) (26) 55 32 - 32
Balance as at
30 June 2020 134 16,002 (3,622) 1 7 12,522 537 13,059
Issue of share
capital 1 987 - - - 988 - 988
Loss for the
period - - (772) - - (772) (120) (892)
Share based
compensation - - 51 - - 51 - 51
Dividend paid - - - - - - (254) (254)
Share premium
reduction - (16,868) 16,868 - - - - -
Other
comprehensive
gain - (22) 19 66 (22) 41 - 41
Balance as at
31 December
2020 135 99 12,544 67 (15) 12,830 163 12,993
Issue of share
capital 38 15,579 - - - 15,617 - 15,617
Share issue
direct
costs - (740) - - - (740) - (740)
Loss for the
period - - (1,198) - - (1,198) 110 (1,088)
Share based
compensation - - 111 - - 111 - 111
Dividend paid - - - - - - - -
Share premium - - - - - -
reduction - -
Other
comprehensive
gain - - 25 (45) (38) (58) - (58)
Balance as at
30 June 2021 174 14,938 11,482 22 (53) 26,563 274 26,837
NB - figures are shown to the nearest GBP1,000 and therefore
totals may appear not to sum
Notes to the unaudited interim financial information
1. Basis of preparation
The condensed interim financial information presents the
consolidated financial results of The Artisanal Spirits Company plc
and its wholly owned subsidiaries (together the "Group") for the
six months ended 30 June 2021 and the comparative figures for the
six months ended 30 June 2020 which are unaudited. This financial
information does not constitute statutory accounts as defined in
Section 435 of the Companies Act 2006.
The condensed consolidated interim financial information, which
is neither audited nor reviewed, has been prepared in accordance
with the measurement and recognition criteria of adopted
International Financial Reporting Standards ("IFRS"). This
statement does not include all the information required for the
annual financial statements and should be read in conjunction with
the Group's Historical Consolidated Financial Information ("HFI")
included within the Company's Admission Document for admission to
the AIM market of London Stock Exchange plc.
There are no new IFRS which apply to the condensed consolidated
interim financial information.
2. Accounting policies
The accounting policies applied in preparing the condensed
consolidated interim financial information are the same as those
applied in the preparation of the Group's HFI included within the
Company's Admission Document.
3. Going concern
The financial information has been prepared on the basis that
the Group will continue as a going concern. The directors have
considered relevant information, including annual budget
sensitivities, forecast future cash flows up until December 2022,
availability of financing and the impact of subsequent events in
making their assessment.
The directors have considered in detail both the impact COVID-19
and Brexit have had on the Group's business to date and based on
their forecasts and sensitivity analysis including the potential
impact of further lockdown scenarios, are satisfied there is
sufficient headroom in their cashflow forecasts to continue to
operate as a going concern.
Based on this assessment, and taking into account the Group's
and the Company's current position, the directors have a reasonable
expectation that the Group and the Company will be able to continue
in operation and meet its liabilities as they fall due over the 12
month period from the date of this announcement.
4. Principal risks and uncertainties
The principal risks and uncertainties affecting the Group are
unchanged from those set out in the Company's Admission Document
for admission to the AIM market of London Stock Exchange plc.
5. Dividends
No dividend was declared or paid during the period (prior period
GBPnil).
6. Revenue
An analysis of the Company's revenue is as follows
6 months 6 months Year Ended
to to
30 June 30 June 31 December
2021 2020 2020
GBP'000 (Unaudited) (Unaudited) (Audited)
Revenue from the sale of whisky 6,638 5,082 12,047
Membership income 610 722 1,523
Revenue from the sale of other
spirits 187 172 384
Member rooms 258 295 552
Events & tastings 103 181 340
Other 150 162 180
7,946 6,614 15,026
------------ ------------ ------------
An analysis of Group revenue by geographical area is as
follows:
6 months 6 months Year Ended
to to
30 June 2021 30 June 31 December
2020 2020
GBP'000 (Unaudited) (Unaudited) (Audited)
United Kingdom (Venue & Events) 590 713 1,503
United Kingdom (Online) 1,677 1,312 3,234
International 5,679 4,589 10,289
7,946 6,614 15,026
------------- ------------ ------------
7. Other operating income
6 months to 6 months Year Ended
to
30 June 2021 30 June 2020 31 December
2020
(Unaudited) (Unaudited) (Audited)
GBP'000
Coronavirus Job Retention Scheme 49 116 169
Government grants (UK) 102 100 187
Government grants (Australia) - - 35
Other Income - - 19
151 216 410
-------------- -------------- -------------
8. Loss on ordinary activities before taxation
6 months 6 months Year Ended
to to
30 June 30 June 31 December
2021 2020 2020
GBP'000 (Unaudited) (Unaudited) (Audited)
Presented as:
Adjusted EBITDA 226 (11) 572
Depreciation of tangible assets (286) (269) (600)
Amortisation of intangible assets (128) (128) (283)
Finance Costs (237) (232) (499)
Exceptional items 9 (516) (34) (392)
------------- ------------- -------------
Loss on ordinary activities before
taxation (941) (674) (1,202)
------------- ------------- -------------
9. Exceptional items
6 months to 6 months Year Ended
to
30 June 2021 30 June 2020 31 December
2020
(Unaudited) (Unaudited) (Audited)
GBP'000
ERP system expenditure - - 240
IPO related legal and professional
fees 516 34 152
516 34 392
-------------- -------------- -------------
10. Taxation
The results include a tax charge against the profits of the
Group's Chinese and Australian subsidiaries at the rates of 25% and
30% respectively in both 2021 and 2020. There have been no
corporation taxes due against other Group companies due to carried
forward trading losses. In the six months to 30 June 2020 a UK
deferred tax credit of GBP10,000 was recorded. In the 12 months to
31 December 2020 a UK deferred tax charge was recorded of GBP72,000
relating to the origination and reversal of temporary timing
differences.
11. Earnings Per Share (EPS)
6 months to 6 months Year Ended
to
30 June 2021 30 June 2020 31 December
2020
(Unaudited) (Unaudited) (Audited)
Earnings used in calculation
(GBP'000) (1,243) (942) (1,648)
Number of shares 69,605,774 52,668,312 54,071,820
Basic EPS (p) (1.8p) (1.8p) (3.0p)
Fully diluted number of shares 70,865,627 57,696,312 59,599,160
Diluted EPS (p) (1.8p) (1.8p) (3.0p)
On the 4(th) June 2021, the Company completed a 4 for 1 share
split. The number of shares and dilutable shares for the 6 months
to 30 June 2020 and 31 December 2020 have been adjusted to reflect
the effect of this split. All dilutable, potential shares relate to
share options. A loss per share is not diluted.
12. Financial Liabilities
As at As at
31 December
30 June 2021 2020
GBP'000 (Unaudited) (Audited)
Asset based lending facility - 14,823
Inventory secured revolving credit 4,100 -
facility
Bank loans 978 946
Other loans 86 95
5,164 15,864
------------- ------------
On 19 January 2021, the Company signed an agreement to change
its previous asset based lending facility to a committed revolving
credit facility of GBP18.5m. The new facility is secured by a
floating charge covering all the property, undertaking, assets and
rights owned now or in the future by the Group. The facility is
interest bearing at a rate of 2.5% per annum plus Sterling Relevant
Reference Rate.
13. Financial Instruments - accounting classifications 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 other comprehensive income.
Financial liabilities
Trade and other payables (excluding deferred income) are
classified as financial liabilities are 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 other comprehensive
income.
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END
IR MZGMLMKRGMZZ
(END) Dow Jones Newswires
September 16, 2021 02:00 ET (06:00 GMT)
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