Artisanal Sp.co Share Price (ART)

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.