By Scott Wright

THE boss of The Artisanal Spirits Company, owner of The Scotch Malt Whisky Society, has declared yesterday’s move to float on the stock market had come at a natural “inflection point” in the bid to expand the prestigious club’s global footprint.

Edinburgh-based ASC floated on the junior AIM (Alternative Investment Market) listing with a market capitalisation of nearly £78 million, based on an over-subscribed offer of £1.12 per ordinary share. The float raised a total of £26m from retail and institutional investors.

Further investment in stock and cask wood is now planned after gross proceeds of £15m were raised for the company from the float, which generated £11m for certain shareholders who have sold down part of their holdings.

Investment in and to expand the Society’s network of venues is also on the agenda, as is promoting membership around the world. The Society currently has around 28,000 members in 30 international markets, who are given access to a range of single malt Scotch whiskies and other spirits from more than 20 countries.

Managing director David Ridley told The Herald the decision to take the company public had been made “because we have had quite robust trading throughout a difficult period for most concerned.”

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He said the business was now “naturally at an inflection point” six years further to its acquisition from Glenmorangie owner LVMH.

Mr Ridley said: “We have been building and preparing for this inflection point by building up our stocks, [and] growing our international footprint.

“We really think we can now start to build out our international membership, invest behind that, and continue to invest in our stocks for the longer term future as well.”

ASC, which trades as The Scotch Malt Whisky Society, had more than 14,000 casks, equal to around 4.3 million standard 70cl bottles, in its reserves on December 31, 2020.

The flotation gives it the firepower to invest in further stock, both in whisky and in other premium spirits from around the world.

When asked if the company will target any specific types of spirit, Mr Ridley said the Society was “all about the variety”. He emphasised the importance of cask wood acquisition to its strategy, noting that “60% of the flavour of whisky comes from the cask”.

The company noted that it “engages in both spirit and cask selection and in active management of the maturation process”, which makes it more like a distillery than a conventional retailer or reseller.

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Mr Ridley said: “Scotland is in an exciting period (regarding single malt) with the new distilleries that are coming online. We are working across the whole range of distilleries to acquire spirit and, importantly, put it into very good wood that will be part of the storytelling of what the final whisky tastes like.”

The share offer was backed by the Society’s members, who invested £2.64m, and new chairman Mark Hunter, who made a personal investment of £1m.

The float has involved a “sell down” of stakes held by investors who had supported the acquisition from LVMH in 2015. These include Ben Thomson and Paul Skipworth of Edinburgh-based Inverleith, its biggest individual shareholder, and an investment syndicate which had owned 50% of the company. The syndicate was formed by Mr Thomson and John Dunsmore, a former chief executive of brewing giant Scottish & Newcastle.

Mr Ridley said: “There is no investor leaving the shareholder base, it is just simply a sell down of their position.”

ASC recently reported a 3% rise in sales to £15m for 2020, despite its venues being closed for most of the year. The company’s e-commerce sales climbed by 30%, while membership numbers rose 4%.

Shares closed at £1.175p.

Mr Ridley said yesterday that the market ASC operates within, premium spirits which generally retail for £35 and above for a bottle, had shown growth of 200% in the last decade, according to one industry estimate. He said the company was benefitting from a “consumer-driven” trend towards trading up to higher-quality spirits, and away from mainstream brands.

“We are sitting in the sweet spot of that consumer trend,” Mr Ridley said.

The Society’s venues in Edinburgh and London have fully reopened; its venue on Glasgow’s Bath Street was due to reopen today.