Owner of Edinburgh's Scotch Malt Whisky Society sees membership surge amid 'structural tailwinds'

Scotch Malt Whisky Society owner Artisanal Spirits Company has seen “significant” membership growth putting it on track to hit its ambitious revenue goal.

The Edinburgh-based group said membership now stood at just over 36,000, after seeing a return to growth in China and an acceleration in growth in the US - both of which are key markets.

The value of US shipments in the third quarter of this year is likely to exceed the £1.6 million achieved in the whole of the second half of 2021, it noted.

News of the continued progress came as the group published first-half results which revealed a 25 per cent hike in revenues to £9.9 million, with significant growth in UK venues, Europe and China.

Gross profit increased 21 per cent to £6.2m though a loss before tax of £1.1m was booked for the six months to the end of June, compared with a deficit of £900,000 a year earlier.

The group’s net debt position at the end of the period stood at £8.2m, considerably higher than the £1.9m recorded in June 2021 and £5.2m at the end of last year. It came as the business continued to invest in “planned strategic initiatives”, most notably investment in spirit and wood and its new supply chain facility - Masterton Bond, near Glasgow.

The group, which listed on London’s Alternative Investment Market in June last year, said it remained fully funded to finance its expansion plans “for the foreseeable future”.

Membership growth is seen as a leading indicator of future revenue growth and the group is confident it can double revenues between 2020 and 2024.

The Artisanal Spirits Company is the owner of the Scotch Malt Whisky Society and a leading curator and provider of premium single cask Scotch malt whisky and other spirits.

David Ridley, managing director of the Artisanal Spirits Company (ASC), said: “We are pleased with the group’s strong first half performance which has once again delivered significant membership growth, whilst simultaneously continuing to build our business in terms of appreciating whisky stocks and infrastructure to support our future growth ambition for the medium to longer term.

“We continue to benefit from structural tailwinds as premiumisation, digitalisation, experience and convenience combine to accelerate the appeal of our proposition to our expanding global membership base.

“Our opportunity remains compelling, exciting and highly relevant for today’s marketplace. Furthermore, and as evidenced by the continued growth by many of the global spirits majors, whisky continues to demonstrate its strong and enduring credentials.”

He added: “ASC’s unique portfolio of curated, limited edition whisky benefits from natural price elasticity which, in turn, provides strong gross margin appreciation and a natural inflation hedge.”

ASC owns the Scotch Malt Whisky Society (SMWS), which was established in 1983, and has grown to encompass thousands of members worldwide.

The society provides members with exclusive access to a vast range of single cask Scotch malt whiskies and other craft spirits, sourced from more than 100 distilleries in 20 countries and “expertly curated with diligence and care”.

The first-half numbers echo those flagged in a trading update in July, when the group also played down supply chain concerns.

Last November, the group launched JG Thomson & Co - inspired by its namesake, which was originally a wine and spirits merchant in Leith, in the 1700s.