PIONEERING drinks group the Artisanal Spirits Company has undertaken an independent valuation of its Scotch whisky spirit stock, putting an estimated current value of cask inventory at £98.4 million which represents an uplift of around £76m, it revealed yesterday as it announced a trading update for the six months ended June 30.
Combined with a book value of about £3.5m of American, other world whiskies and other spirits, the valuation represents a total cask spirit value of just over £100m, with net debt of £22.8m as of December 2023) representing only around a quarter of this total.
'Pioneering' Scotch whisky company Artisanal beats market expectations
The Edinburgh-based company, which floated in 2012, pointed to “positive profit improvement momentum” with a year-on-year increase in earnings before tax of about £1m. Artisanal, which owns The Scotch Malt Whisky Society, the world’s biggest whisky club launched in 1983 with venues in the capital, Glasgow and London, brought in sector experts Des McCagherty and Dr Alan Rutherford to conduct the valuation. Together, they boast eight decades of industry experience.
The group said that while revenue was broadly flat in H124, SMWS membership was broadly stable and year-on-year costs were reduced. “Our increasing global footprint with launches in new markets such as Taiwan, the acquisition of [US bottler] Single Cask Nation in January of this year and the development of our members’ cask sales programme enables ASC to mitigate the group’s exposure to any given market, such as China where trading continues to be challenging," it stated.
"With a larger, more diversified business, China is increasingly proportionately smaller for the group.”
Chief executive Andrew Dane added: “While trading conditions remain challenging in a few markets, we are pleased with the ongoing improvement in year-on-year profitability in H1 and remain focused on delivering the full-year consensus Ebitda expectations of £1m and ensuring sustainable profitability over time.”
Artisanal declares £2.5 million facility will bring ‘real step change’
He noted that Artisanal’s “proven strategy of investing in whisky stock has built an impressive inventory which will satisfy our requirements well into the next decade, as well as delivering a significant uplift in value creation”, adding: “While we have an independent expert valuation estimate of just over £100m today for the casks, the business is focused on generating maximum value creation through maturing and bottling these premium whiskies which ultimately delivers a multiple on the cask value, with estimated future retail value in bottles of almost £0.5 billion.
“Furthermore, with our cask levels now reaching an optimal level, we have reached a turning point in the cash investment requirement in the business. Historic levels of investment in whisky stocks are no longer required as we transition to purchasing on a replacement basis to satisfy future growth demands, representing a very positive inflection point for the cash profile of the group.”
Artisanal, which also owns JG Thomson in Leith, producer of small-batch Scotch whisky, gin, and rum, now has over 18,000 casks from 150 different distilleries across 20 countries which SMWS members can access both as individual bottles and whole casks. It officially opened a new £2.5m bottling, distribution, and warehouse facility in Uddingston last year.
West Lothian whisky firm toasts strategy to future-proof business
The firm noted: “With proven e-commerce reach and a growing family of brands, ASC is building a portfolio of limited-edition and small-batch whisky and other spirits brands for a global movement of discerning consumers, delivering revenue of £23.5 in FY23, predominantly from outside the UK, with an expanding presence in the other key global whisky markets including USA, China, Europe, Japan, Australia and Taiwan.”
Islay Scotch whisky cheer and Scotland's airports in focus
It described its business model as “pioneering”, serving a “substantial and growing addressable market presenting a long-term global opportunity and a strong and resilient business primed to deliver growth, adding: “With an established global presence in some 30 countries, SMWS operates a direct-to consumer model (90% of revenue) primarily through e-commerce, in addition to four member rooms in the UK.”
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here