The Artisanal Spirits Company: Strong FY24 – on track for further improvements in 2025

The Artisanal Spirits Company (“ASC”) creates and sells outstanding, limited-edition whiskies and experiences around the world. Its shares are listed on the AIM market of the London Stock Exchange (symbol: ART) and have a market cap of £34m.

We were delighted to welcome CEO Andrew Dane and CFO Billy McCarter, to the latest Yellowstone Advisory webinar to provide an introduction to the company and update on recent performance. A recording of the webinar is available here.

Based in Edinburgh, ASC owns The Scotch Malt Whisky Society (SMWS), Single Cask Nation (SCN) - bought in 2024, and J.G. Thomson (JGT).  ASC owns over 18,000 casks primarily comprising Single Malt Scotch Whisky from 150 different distilleries across 20 countries which is sold to members both as individual bottles and whole casks. With an established global presence in some 30 countries, SMWS operates a direct-to-consumer model (90% of revenue) with over 40k subscribers.

The financial highlights of 2024 point to an improving financial performance. EBITDA improved to £1.1m, slightly ahead of market expectations and net debt reduced by £1.5m in the second half of the year.  The value of the 18k casks was independently assessed at £102m which is around 4x net book value.

The 2024 performance comes on top of steady progress since the IPO in 2020. Membership is up 57% to 42,700, revenue is up 57% to £23.6m and Cask Spirit inventories are up 49% to £27.8m (valued at cost).

At the time of the IPO a significant investment was made in the cost base and inventories to enable strong revenue growth and revenues are up 57% over that period. The last year saw flat revenues but costs as a percentage of sales have reduced back down to the IPO level at 59%. Further revenue growth is expected in 2025 and with a relatively stable cost base, without the need to invest in stock, a lot of this growth should drop through to the bottom line. This will help the continued improvement in cash generation.

One of the other key components of the strategy was to diversify revenue and this has also been achieved. China, which previously made up 25% of revenue, now accounts for 10% and growth has come through particularly in Europe.

It is also worth noting that £5m of cask sales were made in FY23 and FY24 and the average multiple to book value was 4.9x, underling the strong asset backing of the business.

In terms of capital allocation  the focus is on debt reduction and growth marketing. There are no plans currently to pay a dividend and given the success of the SCN acquisition, M&A will continue to be an option under consideration.

Management believe there are considerable future growth opportunities for the company. The £27m invested in spirits is now worth over £100m on the same basis but when these casks are bottled and sold the revenue potential is over £500m to the company and this would generate over £300m of gross profits.

Whisky growth will come from creating and selling their own outstanding limited edition whisky across the globe. In terms of geographic exposure, Europe accounts for 59% of sales, Americas for 20%, Asia for 17% and RoW for 4%.  The biggest opportunity for growth comes in the US market which is the world’s largest spirits market and where ASC is underrepresented. The US market had a significant increase in sales during Covid but growth has since reverted to the long term trend of growth. So whilst the last couple of years have seen a decline in market sales, the overall market is expected to grow again in the current year. The target is to double the US business. Single Cask Nation was acquired in January 2024, the market team and operations were brought in house from 1 January 2025 and an investment of £0.5m was made in The Scotch Malt Whisky Society in America in early 2025.

Investors with 1,000 shares in Artisanal Spirits receive some attractive shareholder benefits including 50% off their membership and renewal rates, £50 of vouchers per year and 10% discount on whisky flights. Investors with 5,000 shares receive complimentary membership as well as a complimentary 21yr old bottle of whisky!

ASC has made a strong start to the year with double digit revenue growth achieved in the first quarter. Management is confident of improving profits and reducing the overall net debt as they generate more cash from their operations through the year. The very strong asset backing should also provide investors confidence in the company.

A recording of the webinar is available here. If you would like further information on other webinars organised by Yellowstone Advisory, please contact info@yellowstoneadvisory.com