SMWS owner posts ‘strong’ FY 2022 results

The Artisanal Spirits Company (ASC), owner of the Scotch Malt Whisky Society (SMWS), has seen a projected 20% sales growth for the financial year ending 31 December 2022.

In its unaudited trading update released today (24 January), the company says it has seen a strong year-on-year performance that is shown to be ‘slightly ahead’ of the revenue forecast of £21.6 million.

The company had reported a revenue increase of 25% to £9.9m (US$11.4m) for the first six months of 2022.

Furthermore, the SMWS saw its global membership grow by approximately 12% with approximately 37,000 members at the year-end, up from 33,000 at the end of 2021.

Retention remained broadly consistent with the prior year level of 77%, which the company said demonstrates the loyal nature of its membership base.

Mark Hunter, chairman, commented: “2022 was another strong year of considerable strategic progress together with further consistent delivery of both financial and operational goals. We continue to leverage and evolve our pioneering business model to maximise our long-term global growth opportunity.

“Sales have increased by circa 20% once again and membership by circa 12%, and we remain on track to meet our target of doubling revenue to £30m between 2020 and 2024, whilst continuing to improve our operating margins.”

Masterton Bond, the Group’s multi-purpose supply chain facility, became operational on time and to budget in the fourth quarter (Q4) of 2022.

The facility had an ‘encouraging’ start and has commenced bottling operations with approximately 20,000 bottles produced, hundreds of casks delivered and first pallets dispatched from site prior to the year end.

It is anticipated that, once fully operational, this facility will improve operating margins by 2%, with the initial benefits now starting to be realised and the full effect expected early in the current financial year.

“We have invested simultaneously in additional whisky stocks which continue to appreciate, and in advancing our infrastructure and global reach through the development of our Masterton Bond multi-purpose supply chain facility and, most recently, new distribution capability in South Korea and Malaysia,” Hunter continued.

“Looking forward, the investments we have made in 2022 will enhance the business this year and beyond. With whisky stocks to satisfy demand into the next decade already acquired and investment-driven cash burn having already peaked as we pivot towards sustained profitability, we are well positioned to continue expanding our business, benefit from the growing appreciation globally of small batch whisky and the key underlying trends of convenience, premiumisation and digitalisation which are set to continue to drive consumer behaviour.”

An update on the American Whiskey Society proposition will be given with the SMWS owner’s full year results in March 2023.

Change of leadership

In addition, the SMWS owner has announced a change of leadership, with David Ridley stepping down as managing director and Andrew Dane appointed as CEO following the year of strong growth.

Ridley commented: “I have thoroughly enjoyed my time with ASC and am proud of the Group’s success to date. There is demonstrable momentum in the business and following another year of strong growth, I feel the time is now right for me to seek a fresh challenge and hand over the reins for the next phase of ASC’s development. I wish Andrew and the wider team every success for the future.”

“I would like to take this opportunity on behalf of the Board to thank David for his leadership and significant contribution at the helm of ASC over the last six years,” said Hunter.

“He has presided over impressive levels of consistent growth during his tenure and he leaves ASC in excellent shape.  David leaves with our very best wishes and we wish him well for the future.”

Hunter added: “ASC is fortunate to have a strong and able successor in Andrew Dane and the Board has confidence in his readiness and capability as CEO.

“Since joining in 2020, Andrew has demonstrated strong operational and commercial credentials in addition to his proven financial skillset.  He knows the business and ASC’s wider market structure well and has been instrumental in developing and implementing the Group’s growth strategy in conjunction with the wider executive team.

“These qualities equip him well to provide continued leadership as ASC progresses its stated strategy to unlock its significant future growth opportunity.”

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Author: Georgie Collins