THE Artisanal Spirits Company saw its share price leap yesterday after reporting financial results that exceeded market expectations.

The company, which owns The Scotch Malt Whisky Society, told the City that revenue had increased by 19 per cent to £21.8 million in the year to December 31, helped by global membership of the society increasing by 12% to 37,416. Losses narrowed to £2.1m from £2.7m in 2021.

Artisanal, which last week officially opened its new £2.5m bottling, distribution, and warehouse facility in Uddingston, said its performance in 2022 had been driven by significant revenue growth in China and UK venues, as well as strong membership growth in Europe, Australia, the US, and Japan.

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It invested around £5.5m to increase both cask spirit and wood, taking its total number of casks to 16,500 from 15,300 last year, and stated it now has enough whisky stock to satisfy demand through to 2028 and beyond.

And the board declared its confidence in the company, which floated in 2021, meeting its target of doubling revenue to £30m between 2020 and 2024.

Chief executive Andrew Dane, who succeeded David Ridley in the top job in January, 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).

“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.

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“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. The new financial year has begun well. We remain on track to meet our 2024 revenue target of £30m and deliver significant progress on our path to sustained profitability.”

The Scotch Malt Whisky Society was established in 1983 and provides its members with access to a broad range of rare single cask Scotch malt whiskies and other craft spirits from more than 100 distilleries in 20 countries. 

The UK accounts for the majority of its membership, and saw numbers rise by 10% to 18,029 by December 31. US membership increased by 16% to 6,058, and there were leaps of 29% in Europe to 4,327 and 24% in Australia to 1,659. European membership was boosted by the establishment of a distribution hub on the continent, which has eased deliveries to members around Europe to mitigate logistical challenges arising from Brexit.

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However, membership fell by 4% in China to 1,659.

Artisanal noted that revenue in the first quarter of 2023 was “broadly flat” compared with the same period last year, when growth was “exceptional”. Growth in the UK and European Union in the year to date was been offset by the impact of Covid in China in the early part of the year, though Artisanal said “signs of recovery in China are now emerging”.

Membership growth is being maintained at a rate of 10% year-on-year, the company said.

“We see positive profit and cashflow inflection points on the horizon which should drive the valuation significantly higher,” said analyst Wayne Brown at broker Liberum of Artisanal.

The results were published after Mr Dane declared last week that the company’s £2.5m Masterton Bond in Uddingston would bring about a “real step change” at Artisanal.

Developed with funds raised from Artisanal’s stock market flotation in 2021, it enables the company to handle all bottling requirements in-house. The site will also be used for cask storage, fulfilment and distribution, and has produced more than 70,000 bottles since becoming fully operational in November.

Shares in Artisanal, which surged more than 10% in early trading, closed the day up...