Scotch Malt Whisky Society signals profits confidence
THE owner of The Scotch Malt Whisky Society has reported revenue ahead of upgraded expectations and signalled confidence of improving profits this year, as it revealed plans to move into new headquarters in central Edinburgh.
The Artisanal Spirits Company (ASC) reported an 8% rise in sales to £23.5 million as membership of the society grew by 10% to more than 41,000 in the year ended December 31, “despite the headwinds prominent in 2023 and the macroeconomic conditions in China”.
However, the company said that pre-tax losses widened to £3.6m from £2.1m, largely because of interest cost and depreciation of its now fully operational supply chain facility in Uddingston.
ASC, which celebrated the 40th anniversary of the Scotch Malt Whisky Society last year, reported adjusted underlying earnings of £0.1m for 2023 but said its performance in challenging conditions has given its board confidence of achieving “more substantial Ebitda (earnings before interest, tax, depreciation, and amortisation) in 2024 and thereafter, in line with consensus forecasts”.
Last year saw the company build its presence in Asia with a new subsidiary for the society in Taiwan and new franchise operations in South Korea, Malaysia, and Hong Kong, which helped support growth.
Membership grew by 29% on mainland Europe and by 17% in the US, where ASC acquired Single Cask Nation, an independent bottling brand operation, to complement its existing activities across the Atlantic.
Here, the company announced plans to relocate to a new head office in central Edinburgh in the second quarter. The company said moving its headquarters from The Vaults in Leith to the new premises would “facilitate our future growth ambitions and show a commitment to our people”.
Chief executive Andrew Dane said: “Despite the globally challenging economic environment in 2023, the group emerged stronger, more resilient and increasingly well positioned for continued growth.
“I was particularly pleased to see the strong revenue and Ebitda delivery in H2/23 which provides momentum for growing profitability in 2024. This has continued with a positive start to 2024, with revenue performing in line with expectation in the first two months.
“The core of the group remains the SMWS, which celebrated its 40th anniversary in 2023, with a unique and exciting range of celebrations and product developments. In January 2024, we were also thrilled to welcome Single Cask Nation to the group, alongside SMWS and JGT [JG Thomson, spirits brand]. This acquisition is a strong strategic development and is both complementary and incremental to SMWS in the significant and growing US whisky market.
“We remain confident in this US market opportunity, with the very strong finish to 2023 for in-market depletions for SMWS, continuing with double-digit growth in early 2024. This sits alongside the range of other strategic initiatives which were delivered in 2023. These, together with the revenue growth and impressive membership expansion give us confidence to support further profitable growth.”
The company’s Masterton Bond facility, developed at a cost of £2.5m, has allowed ASC to control every stage of its supply chain process. Nearly 200,000 bottles of whisky have been produced at the site since it opened in 2022.