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.

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 or visit 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.

END

IR MZGMLMKRGMZZ

(END) Dow Jones Newswires

September 16, 2021 02:00 ET (06:00 GMT)

The Artisanal Spirits (LSE:ART)
Gráfica de Acción Histórica
De Sep 2021 a Oct 2021 Haga Click aquí para más Gráficas The Artisanal Spirits.
The Artisanal Spirits (LSE:ART)
Gráfica de Acción Histórica
De Oct 2020 a Oct 2021 Haga Click aquí para más Gráficas The Artisanal Spirits.