Artisanal Sp.co Share Chat (ART)

Wealthoracle.co.uk/company-results

Market Analysis

ASC confirmed FY26 trading in line with expectations and unchanged FY26 guidance. SMWS global new membership sales up over 20% in the first four months of FY26, with retention steady around 70% and total membership just under 40,000. SMWS America year-to-date sales up single digits with recruitment up over 30%, helped further by the 30 April removal of US tariffs on Scotch Whisky imports. The US route-to-market change completed 1 April delivers approximately $1m of cost savings over three years and shifts revenue recognition from shipment to depletion. Cask sales and US/Asia growth offsetting subdued European consumer confidence. Chair Mark Hunter stands down on health grounds, with Paul Skipworth taking interim Chair duties. No specific consensus revision; reaffirmed guidance treated as in-line. IN-LINE

wealthoracle.co.uk/company-results

Indeed. This is one share that as long as they maintain the shareholder benefits, I'll generally not pay much attention to until SMWS membership renewal is due.

That is a good tip. The membership fee is I think a significant constraint for some whisky enthusiasts, especially those who can't go to the members rooms in London or in Scotland. I'm off to one this afternoon, for what it's worth, to go down the rabbit hole of their "Heresy Range". I've bought a bottle of one already and it's magnificent, but you really wouldn't know unless you were a member and had it in front of you. I read a review on a specialist blog of another, which was highly complimentary, and the 250 or so bottles of that one have long gone. In a sense it encapsulates the problem with the shares. This is a delightful community, with some excellent (and some debatable) products. The society really does add value by managing the fluid over the years and sells to a largely interested community (70% or so renewal). But ... it is struggling to gain wider appreciation and you have to be a member before you really understand the point. The recent results were pretty ugly; very patchy top line growth in parts, some real headwinds, a nasty drop in the gross margin. The business needs to be significantly bigger to make money at the bottom line, and I think management are doing broadly the right things, but it is very slow going, with a step back for every step forward. As ever this is one I put away and plan to review as I might an actual cask - over years rather than weeks or months.

If I was an existing member of the SMWS or thinking of joining, given the current share price of 29p, now would be a great time to buy the minimum of 1,000 shares to qualify for the shareholder benefits of 50% off membership/renewal and the £50 vouchers. You'd basically be spending £300 for the shares and essentially get the money back over 6 years with the vouchers alone, even if the share price goes down. The good news is that you can now finally use the vouchers on the website and use the vouchers to purchase bottles, events, as well as in the members venues.

Of course ART can remove the shareholder benefits at any time.

Not a recommendation to buy and DYOR!

As a quoted business, it is a puzzle. With a gross margin similar to LVMH, but no top line growth and (recently announced) cash losses, one wonders how it ever is going to make money - even looking through the book-keeping changes and delays in the US (not a particularly large market). I guess when they raised money at IPO they bought stock for growth, and the growth didn't happen. But they did invest in (appreciating) inventory when they raised capital at 112p a share, and you wonder if they might sell some of that (appreciated) inventory now and use it to buy back the shares. Just a thought. The shares are absolutely stuck at 30/33p, and I assume that either they have to start making money at the bottom line or someone has to find a way to monetise that inventory. The shareholders who bought in at IPO can't be very happy and the major holders (almost 30%) must be scratching their heads.

Barcus

Good post. A vulnerable sector but ART does seem to have a business model that makes it somewhat less vulnerable than most.

Hi Iron Knut,

If you're referring to the Spirited Shareholder 21yo Glen Grant, more info here: https://artisanal-spirits.com/shareholder-benefits-programme

[https]://artisanal-spirits.com/shareholder-benefits-programme

Instructions are:

Once you’ve invested, to become a Spirited Shareholder, it’s simple:

1. Register for an Artisanal Spirits account on our new website.

2. Follow the instructions to verify your shareholding (please feel free to reach out if anything is unclear).

I don't know how they verify. You could send them an email ?

info@artisanal-spirits.com

info[at]artisanal-spirits.com

If you're referring to another "special bottle", would be interested to hear what it was .

I note some shareholders were "given" a special bottle of Whisky recently. How was that possible given shares are now held by a Stock broker as holding a share certificate is no longer permitted. Ie direct contact between company and shareholder no longer exists . Would love an answer please.

19.75% drop of 8p so far today ,looks like more drop likely.

One bottle of 21yr old on the way.

I believe its from Glen Grant distillery.

Valued at £150, so RoyRoy was spot on. Sorry, no prizes...

Have any 'spirited shareholders ' received a bottle of 21 yr old whisky yet?

The new announcement about high value casks is more interesting in my opinion. I have no strong idea at all about the value of any given cask, but they have (I believe) 18,000 of them, plus a few bottles here and there. With the current MC and net debt I think the average "cost" for an investor is a bit over £3k a cask. Ignoring any value (or value destruction) associated with the brand itself, the business, its subscribers etc. etc. So ... the announcement this week suggests you could buy a high value cask of Macallan, Bowmore or whatever - 32 year old or some such - and while I don't see prices on the website, I do read in the press that these high end casks might have a price in the tens or hundreds of thousands. Per cask. Which (if true) suggests the average price of the rest of their stuff is rather below £3000, or (rule of thumb) less than £15 a bottle (in cask). I'm intrigued that someone hasn't come along and bought this business for the stock alone. Although I suppose you'd need to have customers/distribution through which to realise the value, which ... is what the ASC already has. Anyway, looks cheap to me (I am a shareholder) and I'm happy to get the odd extra bottle thrown in.

According to the Spirited shareholder programe ...

"...anyone who is a member of the new benefit tier on 30 June 2025 (i.e. holds at least 5,000 shares at this date), will also receive a complimentary bottle of an exclusive and delicious commemorative 21-year-old Scotch whisky."

Might be worth it. I see the 21 y/o currently available from SMWS is £149, a 1st fill ex-bourbon hogshead from Glen Garioch. Not a bad whisky I bet. Hopefully for anyone qualifying, the bottle is a single cask release and not a "special" blend.

So no real change in figures compared to last year. What I found interesting the update is that hot on the heals of the Vietnam venture. The SMWS are finally going to launch in India.

https://artisanal-spirits.com/announcements/7059303

"we are progressing plans to launch a new franchise in India, potentially as early as H2-25."

If ASC management get things right in India, given the size of the potential market there, this could be a huge boost for the company.

It's a very intriguing share. I recommend the IC comment from last autumn (Bearbull). On the one hand, you have stock "worth" £100m, according to their valuers. I note that they say the stock at their average achieved prices (to members) is worth five times that, but I believe there are bottling and tax costs. So maybe go with the £100m for the sake of argument. A lot of their stock is fairly young and, in this business, time adds value as it literally improves the quality of the product. On the other hand ... I know a little about whisky and there is a lot of talk about a whisky "loch". Huge amounts of new capacity has come on stream, marginal entrants have come in and prices have risen massively. I certainly couldn't say if this company's stock is overvalued, but the prevailing market (eg. falling average auction prices for all the lovely whisky out there being sold out of speculative collections) is not on their side. There may be a good reason for these 18,000 casks being available through this share at a bargain price relative to what you'd pay on the open market for them.

ASC announced a new shareholder benefits tier for members holding 5,000 shares on Monday. So I would imagine a fair few number of existing shareholders have increases their shareholders/attracted new members. This is what has probably caused the spike in the share price. Details of the benefits are on the ASC website.

As far as I can see, there isn't a "mark to market" available but an "independent" valuation puts their stock at around £100m as you say. The enterprise value of the company is about £60m. You could assume the rest of the business (the membership, whatever) is worth less than nothing, but if you just said it was worthless, that suggests about £40m of upside to equity holders from today's price. In other words, double the current price. For a better analysis, maybe read the Investors Chronicle from last year. Main issue seems to me why they can't make a profit from selling stock that as you say, is in the books at way below market value. Perhaps the management have an explanation.

Someone appears to think they're worth buying

Actually maybe I spoke too soon lol, they somehow have £100m worth of whiskey on their books as £30m due to accounting rules not being mark-to-market...

Positive update is my take. Reducing debt always a good sign

Decided to buy at 40p yesterday been watching this share for a while now ,my buy in target was below 50p. Hope I’ve made right decision now and share price will start heading back to £1+,this was when first noticed share price a long time ago.

Https://www.proactiveinvestors.co.uk/companies/news/1045073/artisanal-spirits-company-targets-new-markets-as-it-expands-global-whisky-experience-1045073.html

The Artisanal Spirits Company (ASC) has announced an important acquisition in the US. Effective 3rd January 2024, the company has acquired 100% of the trade and assets of Single Cask Nation (SCN), which is an independent bottler and distributor of both Scotch and American whiskies. An accompanying trading update for ASC confirms recent guidance and we leave our forecasts unchanged. Our assessment of fair value remains 100p per share.

ASC states that the SCN acquisition, which includes all of its assets and global operations, will be funded out of existing borrowing facilities. Furthermore, it is expected to be EPS accretive in the first year of ownership. Consideration includes an up-front payment and the potential for up to US$0.5m (£0.4m) to be payable as an earn out, dependent on FY2024 and FY2025 financial performance. Importantly, the deal is consistent with ASC’s sustained ambitions for overall business quality, premiumisation, profitability and cash generation.

Link to report: https://www.equitydevelopment.co.uk/research/single-cask-nation-acquisition-uplifts-us-prospects

My understanding of the Ferovinum deal is that it’s essentially a deal where SMWS can choose to sell stock at a discount of 30% to the agreed B2B trade value. It provides fast access to £15m of cash flow without raising debt or having to fire-sale stock.

It’s not the retail value, which includes VAT, duty, bottling, shipping.

Just to provide confusion, the agreed valuations look to be above the asset values in the accounts - suggesting the stock has been “prudently” valued.

Im trying to do the maths ; if they have in effect forward sold £15m of maturing stock at 70% of final retail value. that equals about £70 per bottle now. = 214,000 bottles = 800 casks to be sold in 2 years. Out of 17,000 casks at Masterton, = just under 5% of current stock in casks. So in return for forward sales of only 5% of stock in 2 years, SMWS get £15M now. That values forward stock at > £300M minimum at only 70%. If they have plenty of stock for 2 years time ( they do), and they can lay down more casks to replace these pre-sold 800 ( they certainly can much cheaper than that), then it might just be brilliant. Am I wrong ?. anyway just bought a few more at 48p. DYOR. also have a hunch that Ferovinum must have conducted some sort of due diligence on SMWS and liked what they saw.

New report with audio summary available here: https://www.equitydevelopment.co.uk/research/a-year-is-a-short-time-in-scotch-malt-whisky

The Artisanal Spirits Company (ASC) announced on Friday that it expects both sales revenue and EBITDA to be lower than previous market expectations. Effectively the company is now on track to achieve our former FY2023 forecasts in FY2024. However, the underlying growth messages remain strong, supported by both membership growth and fresh strategic initiatives. While the FY2023 outcome is disappointing, our counter argument is that, given the long duration to maturity of the product, a year is but a brief period in Scotch malt whisky.

Despite its strength as a membership organization and substantial intrinsic value in relation to the maturing whisky mentioned above the ASC’s relative valuation is subject to a negative impact from international headwinds also being faced by its key distilled spirits and luxury brand owning peers. A 100p share price implies 3.8x EV/sales and a £70m market capitalisation.

We revise our fair value down from 150p a share to 100p, which still stands well above the current share price.

I was wondering that too - is it that Ferovinum have essentially pre purchased whisky, i imagine at a discounted bottle price (to sell to whom??) meaning the facility somehow has a net zero balances sheet effect? Seen this just this morning:

...other areas of the Group continue to trade well and further progress on strategic objectives has been made as detailed below. The Group's stock-backed balance sheet is strong, even more so since recently agreeing its partnership with Ferovinum which has allowed ASC to convert maturing stock into a just-in-time asset at a truer valuation without increasing its overall debt level, giving the Group financial flexibility and optionality. Under the current arrangement ASC can draw up to a further £12.4 million providing ample cash and liquidity.

Could be 250,000 shares traded yesterday under Delayed Notification. Guess somebody sold a lot, and still selling today. if so, we will see more delayed notifications come through tomorrow or Monday. Could be that recent refinancing with Ferovinum for £15m is not liked by someone. Inc me, don't understand why they need all this money. Despite the fact that they have raised access to this new £15m, apparently this doesn't increase their debt. ! wow, wish someone would give me access to £15m and it doesn't increase me debt mountain. What on earth do they want this for ? lack of detail could be worrying, but on the other hand perhaps they are acquiring some new retail premises. On any trading terms, are the shares worth squit ? Becoming just a play on them be taken over. And then there is the recent report that premium whiskey prices dropped this year, and Diageo shares are fallers. Yuck, thank heavens for RR. DYOR.

Anyone know why the 8.87% drop / 5.5p , still it’s getting closer to my buy in target of below .50p

The Artisanal Spirits Company (AIM: ART), the owner of The Scotch Malt Whisky Society (SMWS), conducted a investor presentation following the release of their Interim Results for the six months ended 30th June 2023.

Andrew Dane (Chief Executive Officer) and Billy McCarter (Chief Financial Officer) discussed the growing opportunity in the Far East, including Taiwan and Korea, a new route to market in the form of casks, and their confidence in reaching EBITDA profitability at the full year. Management also answered a wide range of questions from investors.

The full video has been dividend into chapters as below:

0:00:03 Introduction & key points summary

0:04:05 KPIs and Financials

0:08:48 Pioneering Model

0:15:02 Long term global growth opportunity

0:16:25 Robust business primed to deliver

0:21:12 Current trading & Outlook

0:23:24 Questions & Answers

Link to video: https://www.equitydevelopment.co.uk/research/the-artisanal-spirits-company-investor-presentation-interimresults-sept2023

Interim Results published today - new research note from Equity Development is here: https://www.equitydevelopment.co.uk/research/western-growth-enhanced-by-eastern-promise

The Artisanal Spirits Company (ASC)’s FY2023 H1 results reconfirmed a strong Q2 as well as showing potential for sustained sales growth both domestically and overseas. Profits at EBITDA level remain on track to be positive in FY2023. With further membership expansion, resilient demand for ultra-premium Scotch and important Asian developments in place, we reiterate our view that fair value for the shares is 150p.

New research report out today: https://www.equitydevelopment.co.uk/research/taiwan-subsidiary-uplifts-asian-growth-outlook

Today’s announcement by The Artisanal Spirits Company that it has successfully launched a new subsidiary in Taiwan is important. The country is the world’s third largest market for Ultra-Premium Scotch Whisky globally, and thus one which should welcome the ASC’s unique offering of single cask malt whiskies. Moreover, the action is consistent with the ASC enjoying significant headroom for incremental revenue growth – notably through Asian expansion. We continue to argue that fair value for the shares is 150p, and Asian strength supports this view.

Post results webinar : if planning your post summer diary, save the 20th Sept at 11.30 am.The CEO and CFO of ART will discuss their interim results and outlook.

All are welcome, simply register here

https://www.equitydevelopment.co.uk/news-and-events/artisanal-results-presentation-20sept2023

The Artisanal Spirits Company (ASC) FY2023 H1 trading update reported 1% sales growth with 7% growth in the second quarter and, importantly, a 9% increase in membership numbers to above 38,000. In addition, the statement reconfirmed the benefits of the company’s ultra-premium distilled spirits positioning, its focus on Scotch whisky, and the benefits of not only being international but also in control of its supply chain and distribution system.

While the ASC’s H1 sales growth was beneath our full year expectation of 14%, the company was lapping a particularly strong growth in the same period a year earlier when sales advanced by 25%. The company itself remains confident that full year market expectations for sales and adjusted EBITDA will be met. We leave our own forecasts unchanged at £24.7m and £1.3m respectively for these two measures.

We draw a positive read-across from Diageo PLC's investor presentation in Edinburgh on 1st June (“Delivering sustainable long-term growth – our vibrant Scotch portfolio.”) Diageo’s central investment messages focused on premium Scotch as a growth category and its value creating qualities relative to other distilled spirits categories. In our view ASC is already a clear beneficiary from these trends and opportunities.

We base our 150p fair value/share, which implies a 4.8x FY2023 EV/sales ratio, on a relative valuation comparison with other international distilled spirits companies and luxury providers.

Link to report: https://www.equitydevelopment.co.uk/research/investing-in-ultra-premium-scotchs-global-growth

Today’s Annual General Meeting trading update from The Artisanal Spirits Company (ASC) confirms that the positive underlying sales momentum enjoyed in FY2022 has continued into the current year. The group remains confident of delivering both sales growth and EBITDA in line with expectations. Moreover, sales growth is expected to be at least double digit % in the second quarter after a relatively flat Q1.

We base our 150p fair value/share, which implies a 4.9x FY2023 EV/sales ratio, on a relative valuation when compared with leading listed distilled spirits companies and luxury goods providers. ASC is simultaneously exposed to both these categories given its emphasis on ultra-premium-and-above Scotch malt whiskies.

Furthermore, the £493m updated notional retail value of the company’s maturing whisky stocks is currently over 6 times today’s market capitalisation.

Link to report: https://www.equitydevelopment.co.uk/research/agm-statement-confirms-growth-momentum

Glad I went with other tip , this price feels to high, maybe if drops again to 50p - 60p I will buy a few, good luck to who just invested.

Midas

Thanks - had to be a reason.

Share tip in Mail on Sunday

Investor presentations and results didn't seem to make much difference to the SP recently. Now today there has been a significant increase in buying activity. Was there something in the media over the weekend?

The Artisanal Spirits Company (AIM: ART), the owner of The Scotch Malt Whisky Society (SMWS), conducted an online investor presentation following the release of Full Year results for the period to 31st December 2022.

Andrew Dane, Chief Executive Officer, and Billy McCarter, Interim Finance Director ran investors through key FY22 metrics, the long term global growth opportunity for Artisanal Spirits, and their pioneering model. Management also touched on current trading & outlook and answered a range of questions from the viewing audience.

The full video has been divided into chapters for ease of viewing, as below:
0:00:40 Introduction to ASC
0:03:46 Key metrics for FY22, growth & financials
0:12:55 Pioneering Model
0:17:18 Long Term Global Growth Opportunity
0:18:46 Robust Business Primed to Deliver
0:24:07 Current Trading & Outlook

Link to video: https://www.equitydevelopment.co.uk/research/the-artisanal-spirits-company-investor-presentation-fy-results

19% revenue growth, a 12% increase in membership numbers and a £1.0m favourable swing in adjusted EBITDA were key features of today’s FY2022 results statement from The Artisanal Spirits Company. With the Masterton Bond facility fully operational and group trading having started well in the current year, ASC appears well placed to deliver medium term sustainable profitable growth. As a membership organization which boasts substantial invested facilities and valuable whisky stocks, we reiterate our 150p fair value for the shares.

This implies a 4.9x FY2023 EV/sales ratio, largely on a relative valuation when compared with leading listed distilled spirits companies and luxury goods providers. ASC is simultaneously exposed to both these categories given its emphasis on ultra-premium-and-above Scotch malt whiskies. Furthermore, the £493m updated notional retail value of the company’s maturing whisky stocks (mentioned above) is currently over 7 times today’s market capitalisation.

https://www.equitydevelopment.co.uk/research/delivering-robust-profitable-growth

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 conduct an online presentation for retail & private investors following the release of their Full Year results for the period to 31st December 2022.

The event will take place at 2.00pm on Thursday 30th March.

Andrew Dane, Chief Executive Officer, and Billy McCarter, Interim Finance Director will be hosting the presentation and answering questions submitted by investors.

This is open to all existing and potential shareholders - you can sign up to register below.

Link: https://www.equitydevelopment.co.uk/news-and-events/artisanal-fyresults-presentation-30march2023

New research report & audio summary from Equity Development: https://www.equitydevelopment.co.uk/research/sales-and-membership-growth-drives-momentum

Sales revenue for the year ended 31st December 2022 increased by approximately 20% from £18.2m in FY2021 and is expected to be slightly ahead of our £21.6m forecast when the full audited numbers are announced in March 2023. A 12% increase in global membership numbers to around 37,000 drove the business forward. While we leave FY2022 forecasts unchanged at this stage, our confidence in these numbers is enhanced by today’s announcement.

ASC announced that Andrew Dane, previously the company’s Executive Finance Director, will become CEO with immediate effect. He replaces David Ridley who had been Managing Director for six years. In our view, his appointment should be seen as endorsing the group’s growth strategy both for the Scotch Malt Whisky Society and ASC’s ambitions elsewhere in distilled spirits – e.g. J G Thomson & Co. An update regarding the Company’s American whiskey proposition will be made with full-year results.

The Masterton Bond Facility was the standout operational news in FY2022. It will provide production, cask storage, fulfilment and distribution of ASC's whisky and other spirit stock, and is expected to add around 200 basis points to group operating margins, probably as early as in FY2023. It became operational on time and on budget in FY2022 Q4. Other international expansion moves included an inaugural franchise agreement in South Korea and a new partnership with Drinks Alliance in Malaysia.

We base our 150p fair value/share for the Artisanal Spirits Company, which implies a 5.4x EV/sales ratio, largely on a relative valuation when compared with leading listed distilled spirits companies and luxury goods providers. ASC is simultaneously exposed to both these categories given its emphasis on ultra premium and above Scotch malt whiskies. Furthermore, the £455m notional value of the company’s maturing whisky stocks currently stands at around 7 times today’s market capitalisation.

The Artisanal Spirits Company conducted an investor presentation following the release of their Interim Results for the 6 months ending 30 June.

David Ridley, Executive Managing Director of the Company, and Andrew Dane, Finance Director, ran viewers through their pioneering model, financials, the global growth opportunity, and the framework to double sales by 2024. They also touched on current trading & outlook and answered questions submitted by investors.

If you missed the live presentation, the full video recording is available below, divided into chapters:
0:00:03 Artisanal Spirits corporate video
0:01:54 Introduction & Company Overview
0:13:42 Pioneering Model
0:22:55 Long Term Global Growth Opportunity
0:31:57 Robust Business Primed to Deliver
0:37:12 Current Trading & Outlook
0:40:29 Questions & Answers

Video: https://www.equitydevelopment.co.uk/research/investor-presentation-september-2022

Here's an update video from the management for todays results:

https://youtu.be/C0RVHQAXbV0