Scotch Malt Whisky Society owner toasts 40,000 member milestone but sales growth 'disappoints'

Despite some bits of the business struggling bosses said they were confident for the future.

The owner of the Scotch Malt Whisky Society has toasted a “significant milestone” as it caps its 40th anniversary celebrations but warned of tougher trading ahead.

Edinburgh-based Artisanal Spirits Company (ASC), which listed on the London Stock Exchange in 2021, said membership of the society had now surpassed 40,000 as it provided investors with an update on trading and recent “strategic initiatives”. The group said it had identified two areas that are expected to “challenge” its full-year results.

Full-year revenue is now expected to be around £23 million. This would represent mid to high single digit growth but come in below market expectations for £25m. ASC cautioned that the expected strong uplift in revenue growth of 25 per cent during the second half, compared with the year before, “may not be fully met” due to a weaker performance in China. The group has also experienced a slower than anticipated rate of sales for its new anniversary member cask sales programme launched at the end of November. While generating a “positive contribution” this year, sales will not be at the anticipated level by the year end, it noted.

Edinburgh-based Artisanal Spirits Company is the owner of the Scotch Malt Whisky Society and listed on the London Stock Exchange in 2021.

The cooling sales growth means that underlying earnings for the second half are likely to be nearer to £2m and therefore the group will record a result of “around breakeven” for the full year.

Despite the sales setback, bosses pointed to the progress being made on creating new revenue streams, including a monthly subscription service. At the end of November, the Scotch Malt Whisky Society (SMWS) launched “Drop & Dram”, which allows non-members to “try before they buy”. The £45 monthly subscription comprises a curated selection of three 50ml cask strength whiskies and membership benefits including access to SMWS’s four member rooms in London, Glasgow, and Edinburgh - Queen Street and the newly refurbished Vaults venue in Leith - as well as the opportunity to buy full-size 70cl bottles.

The group also launched its “membership and a bottle” product last month to “further improve its value proposition for new members”. Designed and launched in time to capitalise on the crucial festive period, the gift pack includes a personalised message and bottle of single-cask, limited-edition whisky alongside an SMWS membership card and 12 months of membership. The society also released a specially curated 40-year-old anniversary edition.

Andrew Dane, chief executive of the Artisanal Spirits Company, said: “Our business continues to develop and grow strongly with successful strategic initiatives and membership growth driving profitable sales. Whilst it is disappointing that our fourth-quarter sales in China and the sales rate of the brand-new cask programme have not yet met anticipated levels, the remainder of the business has performed well and grown in line with expectations and we are on track to deliver substantial Ebitda [earnings before interest, taxes, depreciation and amortisation] growth in the second half.

“Our model is robust, throughout [the financial year] we have ensured that we have the right cost base for the business, we are well financed and we remain confident of future profitable growth,” he added.

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