SMWS owner posts 18% FY sales rise

The owner of the Scotch Malt Whisky Society (SMWS) saw revenue increase by 18% last year, driven by double-digit membership growth.

UK-based Artisanal Spirits Company (ASC), owner of membership organisation SMWS, recorded revenue of £21.8 million (US$26.8m) in 2022, up from £18.2m (US$22.4m) in the previous year.

The company had estimated a 20% sales increase for 2022 in an unaudited trading update released in January.

Gross profit increased by 23% to £13.8m (US$17m) last year, up from £11.2m (US$13.8m) in 2021. The firm also cited double-digit growth in whisky stock and value appreciation.

Andrew Dane, who became CEO of ASC in January 2023, said: “Our ambition is to create a global, premium business which is highly profitable and cash generative by delivering the world’s best whisky experiences.

“We have a pioneering model, a long-term global growth opportunity on which we are primed to deliver. We are making significant strategic progress with strong membership growth and delivery of another strong year of profitable growth supported by improvement across all financial and operational KPIs [key performance indicators].”

ASC said the full-year results slightly exceeded expectations, led by ‘significant’ revenue increases in China and UK venues, and ‘strong’ membership growth in Europe, Australia, the US and Japan.

Membership numbers rose by 16% in the US, by 29% in Europe (excluding Denmark and Switzerland), by 24% in Australia, by 21% in Japan, and by 3% in the rest-of-the-world region.

The SMWS’s global membership increased by 12% to more than 37,400 last year (up from 28,700 in 2021).

ASC said membership retention was at an ‘all-time-high’ of 77%.

The SMWS experienced a ‘strong performance’ in UK venues, where membership was up by 10% to 18,029. Member venues experienced a record month in December 2022, followed by new records for the first two months of 2023.

Membership in China fell by 4% due to the pandemic in the early part of the year, but there are now signs of recovery, ASC said.

Investments for the future

The company has invested £5.5m (US$6.7m) in cask spirit and wood, taking its total cask inventory to 16,500.

ASC said its current whisky stocks were sufficient to fulfil demand through to 2028 and beyond.

The company also consolidated its production with the opening of a £2.5m multi-purpose supply chain facility at Masterton Bond.

ASC said it was well-funded to continue to invest in growth for the medium and long term with an increased loan facility to £21.5m (US$26.5m), agreed with banking firm RBS in the second half of 2022.

Dane added: “Over the last year we have continued to make investment for the future in further spirit and wood, as well as our own supply chain facility, and while the rate of cash spend on this has peaked, we will continue to invest, with a focus for FY23 on IT and technology to deliver and accelerate our growth even further.

“Our markets benefit from underlying structural dynamics, which have increased our addressable market. We are seeking to exploit this opportunity by growing our international footprint, including in South Korea and Malaysia.”

Dane said the company was “on track” to meet its 2024 revenue target of £30m (US$37m).