By Scott Wright

THE owner of The Scotch Malt Whisky Society has revealed plans to ramp up investment in new stock after raising nearly £20 million of finance.

The Artisanal Spirits Company has vowed to provide the Leith-based society’s thousands of members around the world with access to a wider range of spirits on the back of the funding boost. Artisanal, which acquired the society from the owner of The Glenmorganie Company, luxury goods business LVMH, in 2015, said it also plans to invest in new cask wood.

The investment plans come shortly after Artisanal revealed in April that it was exploring a stock market flotation on the junior AIM listing. It said a float could raise its public profile and give it access to a wider pool of capital.

Artisanal flagged the listing move as it drafted in Scottish drinks industry veteran Mark Hunter, the former chief executive of brewing giant Molson Coors, as its new chairman.

That came as the company reported a three per cent rise in sales to £15m in 2020 – despite its venues being closed for most of the year because of the pandemic. E-commerce sales rose 30 per cent, with memberships growing by 4%, it noted.

Yesterday, the company announced that it had secured £19.5m from Royal Bank of Scotland and Lombard, the bank’s asset finance division, to expand the Society’s stock holding.

The funding is based on an inventory-secured revolving credit facility, secured mainly against cask stock.

David Ridley, managing director of The Artisanal Spirits Company, said: “While we had a number of challenges throughout the past 12 months, The Scotch Malt Whisky Society has continued to thrive thanks to its valued members and our enhanced online offering with virtual tastings and our Unfiltered magazine moving to a monthly online format.

“This support from Royal Bank of Scotland will help us deliver on our exciting future plans and bring an increased range of superior whisky and other spirits to our members. The team at the bank have been great, demonstrating an excellent understanding of our business needs – it was a very smooth, collaborative experience throughout.”

The society, which was established in 1983, curates and provides premium single cask Scotch malt whisky and other spirits to 28,000 members around the world. Each month, members are given exclusive access to limited-edition, single-cask bottles, as well as its four venues based across Glasgow, Edinburgh and London, and its 100-plus member bars elsewhere.

In a statement issued yesterday, it was noted that the organisation had been able to invest in long-term stock holdings and a wide variety of cask inventory, as well as create subsidiaries in China, Japan and Australia, on the back of investor support and facilities from the bank. That backing had also helped it develop sales in the US and purchase property, including flats for members’ use near The Vaults, its headquarters in Leith.

In results published last month, Artisanal said sales in China, the society’s biggest market, reached £3m in 2020. Sales to the US, its number two market, were worth £2.7m. Underlying profits edged up to £0.6m from £0.5m in site of a £0.7m hit because of the 25% tariff on imports of single malt to the US. The tariff, linked to a long-running dispute between the US and European Union over aircraft subsidies, has now been suspended.

Andy Barraclough, head of regional asset based lending at Royal Bank of Scotland, said: “The Artisanal Spirits Company boasts a quality management team, a clear strategic view, and a record-breaking trading performance during the pandemic.

“Their plans are sure to build on this great work and, by increasing their previous facility, Royal Bank of Scotland is reinforcing its commitment to one of Scotland’s oldest and most important sectors, and its promotion on the international stage.”

Mr Hunter succeeded long-running chairman Paul Skipworth, a former chief executive of Glenmorangie, as chairman.

Mr Skipworth is now the Society’s deputy chairman.