Distil Valuation18 May 2025 09:11
The Allenby Initiation Note points out that The Lakes Distillery (in The Lake District) sold for £71m. The Ardgowen Distrillery has about 3x the production capacity and is in Scotland. The Distil CLN coverts to 9.1% of Ardgowen which if we assume is only the value of the Lakes Distillery is worth ~£6.5m. Incidently, the loan pays out 5% or £150 pa. The deal also allows for the Distil Blackwoods Gin visitors centre (opening in June) and Gin production. This is conservative in my view because The Ardgowen Distillery will be work more than The Lakes.
Valuing the brands is more difficult. If we assume 1x T/O for the brands thats ~£1.5m. My own view is that a combination of Global Brands driving forwards RedLeg, the new US distributor developing the Blavod brand and Blackwoods Scottish Gin at Ardgowen we probably should look at an additional £1.5m of value. Again, this is conservative in my view because the new distribution partners should more than double T/O....
So for me I think of a conservative valuation of around £6.5m + £1.5m +£1.5m which gets me to a £9.5m valuation. Currently the share price is reflecting a valuation of £1.3m which is about 14% of my valuation. So, for me the potential here is around 7x.
The Allenby Initiation note is worth reading for interest, however, they just value the CLN at face value of £3m and attribute £1m to the brands (valuation of £4m and a target price of 0.28p) so its not really grown up financial research (and nor is mine)..... DYOR
TTFN
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