Artisanal Spirits Company (ASC), single-cask and limited-edition whiskey specialist, has reported another uptick in profits as it reaches an “inflection point” in its cash profile despite a slowdown in China.
The Edinburgh-based brand reported that earnings before interest, tax, amortization and depreciation (EBITDA) increased by £1m year on year.
Revenue was “broadly flat” in the first half of the year, the company said.
ASC has struggled to sell in China and has diversified into new markets to reduce exposure to the country, the company said.
“Trading continues to be challenging”, it said, and added that it aims to make China “increasingly proportionally smaller” for the group.
Slow growth in China has reduced spending across the board, but particularly in luxury items such as whiskey and clothing.
“While trading conditions remain challenging in a few markets… [we] remain focussed on delivering the full year consensus EBITDA expectations of £1m and ensuring sustainable profitability over time,” Andrew Dane, CEO of ASC, said.
In the first half of the year, the company launched in Taiwan, and acquired independent bottler Single Cask Nation.
ASC, which operates an e-commerce-based direct-to-consumer model, reported revenue of £23.5m last year.
It is a relatively young company: its IPO was only completed in 2021.
“With our cask levels now reaching an optimal level, we have reached a turning point in the cash investment requirement in the business.
Historic levels of investment in whisky stocks are “no longer required” as we “transition to purchasing on a replacement basis to satisfy future growth demands” Dane said.
Independent valuation estimated ASC’s inventory at £98.4m, the company said, “representing around £76m uplift to the current carrying value”, it added.
ASC’s share price rose by 1.33 per cent in early trades.