The Artisanal Spirits Company plc (ART.L) Earnings Call Transcript & Summary

Good afternoon, and welcome to The Artisanal Spirits Company Investor Presentation. [Operator Instructions] Before we begin, I'd like to submit the following poll. And I'd now like to hand you over to Andrew Dane, CEO. Good afternoon, sir.

Good afternoon. Thank you very much all for joining. I'm Andrew Dane, I'm the Chief Executive, I'm joined today by Billy McCarter, CFO. Good afternoon. And it's a chance for us to talk about our interim results for the half year ended 30th of June 2025. Before we get into the detailed report, what we'll do is we'll set the plan for today. We'll start with an introduction and overview of the business and an executive summary of the results. I'll then hand over to Billy, who will take you through some of the trading update. I'll put some strategic context for that update, and then we'll finish with a bit of a current trading update and outlook for the balance of the year. First of all, as a reminder, The Artisanal Spirits Company create themselves, with limited edition, outstanding whiskeys and experiences around the world. We primarily do that through Scotch Malt Whisky Society. Over 40 years old with sort of 40,000 members around the world, the heart and soul of the business. But we've been expanding the group with the acquisition of Single Cask Nation, a U.S.-based independent bottler in January last year, the launch of the Artisan Casks, a high-end private cask experience offering, which launched in July this year. We'll talk about it a bit more in his presentation. J.G. Thomson, small batch blended malts, and a range of other services like trade cask sales and third-party bottling services under the broader The Artisanal Spirits Company banner, all in whiskey, all in creating and selling those outstanding limited-edition whiskeys and experiences around the world. And in terms of the headwind for the period, overall, this focuses on resilient performance. Headline revenue was down 4%, primarily driven by a delay to U.S. shipments as we implemented a new route to market to mitigate the impact of tariffs. Billy will talk about that. Despite that, headline profitability was flat year-on-year. As a business, we continue to have a substantial asset backing, over 18,000 cask with a market value of over GBP 100 million. But we're realizing more value out of those continued trade cask sales and launch of our new private cask program. The core of the business is about selling bottles. We have a globally engaged SMWS membership base with high retention levels and increasing engaged levels in core markets like the U.K. where we've seen the underlying improvement in average bottles per member, the metrics of engagement, increasing pretty steadily over the last 15 months. We've also seen growth in recruitment, particularly in the U.K., which is up almost 40% year-to-date, supported by partnerships, and particularly in the U.K. [indiscernible] with Amex which will run for a few months into -- in Q3, and we're -- during that period we will also closing new members with Amex. On top of that, continued international expansion, and that's supporting SMWS with the launch of the new Vietnam franchise back in June as well as signing the new franchise within India for shipment in the coming months and the launch after as well as advances for Single Cask Nation exporting into Brazil for the first time. So a number of strategic progress across the group. So I'll hand over to Billy to give a little bit more detail on some of the financials.

Thank you, Andrew. So yes, Andrew has given a headline there, and I'll take the opportunity to just point out a little bit more detail into life. As we mentioned, overall, the reported revenue was down marginally 4%. But we're keen to call out the situation in America in the first half. So excluding that, our revenue excluding that Americas number was up 6% year-on-year, which, again, Andrew described well as a resilient performance. Trading conditions are challenging, but we are doing everything we can to manage that. So firstly, on that Americas piece, as Andrew said, we basically shifted over half the amount we did versus prior year, which is about GBP 1 million impact in the first half. If I focus on some of the other regions now, you'll see we break it down to Europe, Asia and then what we call other, which is the same as the Australia and a couple of our franchises in New Zealand and South Africa. So building in Europe, you can see that there was a 20% growth, still a 20% growth. Now, a lot of that driven by our cask sales, which remains a strategic priority for the business. That essentially doubled its volume of sales compared to the previous year and will continue to be a key factor in our delivery of the balance of the year. And predominantly, it represents trade cask sales, but we will go on to talk about some more of our private cask sales shortly also. And from a venues and events perspective, we're really pleased that, that delivered 6% growth year-on-year. Talk about challenging conditions that [indiscernible] continues to be able to achieve growth year-on-year. So we're pleased about that and 6% is a good return. And then finishing in the Europe region, what's left is basically our U.K. online and our Europe online e-commerce. So it was down 8%. From a U.K. perspective, that was roughly flat. We had a very strong Q1, but had a bit of a tougher Q2 to end the half flat. In Europe, the conditions have been a bit more challenging. But we've seen a better start to Q3. So -- of which we'll mention a bit more as we go through this presentation. In Asia, it does show a 30% decline, and these are definitely a challenging market and has been for 2 years. However, that impact is a [indiscernible] within that is shipping timing within China. Some of the releases we have planned to do in the first half, shipping delays into the second half means that more of the delivery will be in the second half, and we don't expect it to be a 30% decline in the balance year for Asia. And again, we'll come on to talk about each region individually shortly. Overall, resilient performance, [indiscernible] come in the second half that we'll talk about. Now whilst trading conditions are challenging as a business, we want to deliver EBITDA. Last year, we delivered our first full positive EBITDA of GBP 1 million this year and the expectation of GBP 1.5 million to allow us to deliver that return to trading conditions [indiscernible], it's important we manage our cost base and drive efficiencies where we can. And the purpose of this slide, you can see on the screen in a minute. This is how we've done just that. We recognized 4 key areas of spend in our cost base, so commission, marketing, payroll and overhead. And across all of them, we've achieved a 10% reduction year-on-year. And across all of them, we have achieved efficiencies. And if I was to go into each one individually briefly, commissions as a result of taking greater control of the U.S. and the U.S. market, and taking on our U.S. team as opposed to being a partner commission, so the savings there. In marketing, we continue to try and drive increased return on investment, making sure the focus is on the short term to recruitment and retention that's really driving bottle sales and making sure we can deliver in the short term. And then on overhead, it's about managing things appropriately. So reduce in spend, professional fees, reducing spend on recruitment fees as our employee value proposition has really increased the last couple of years. Our spend with agencies has significantly dropped, which we're pleased about. And from a [indiscernible] perspective, you can see in the screen a bit later, there is a net increase. But what I would call it that is a significant impact of a [indiscernible] increase, which for this business is about [ GBP 100,000 ] over a year. And also, I mentioned 2 minutes ago, the fact that we took on the U.S. team, which in the first half was a cost of GBP 0.5 million. So you can see we've actually driven efficiencies of around GBP 300,000 to reduce our net impact of those increases to simply GBP 300 of additional spend. And finally for me, for [indiscernible], cash, cash and net debt. First thing I would say is the net debt of this business is -- does go in a bit of a peak fashion. At half year, due to the half 2 weighted nature of product delivery in this business, it does slightly increase. By the half year, that will reduce, as you would expect. If it was to call it key parameters of that increase in half 1, as I've talked about, certainly, the EBITDA loss year-on-year flat from an adjusted perspective. That obviously utilizes cash. We've also made, and I reference 2 minutes ago, we had significant investment in the U.S. which is GBP 0.5 million in SMWS America and a couple of hundred key to close out the -- and acquisition of Single Cask Nation from [indiscernible] perspective. Other than that, there's a little bit of credit or timing. But ultimately, that's a driver to the half years. We deliver profitability in the second half, that net debt will come down at least a couple of million pounds and in line with analyst forecasts. Thank you.

Thanks, Billy. So if I now start to move on to talk a little bit about the kind of strategic context. When you think about strategy through 2 lenses. First of all, a regional approach, ultimate key regions, Europe, Americas, Asia and the rest of the world, and then through global set pillars at [indiscernible]. So first, we'll pick into the strategic perspective of the regions and with our largest region being Europe. Headline looks positive, Europe up by over 20%, that's actually driven by the strong cask sales. In addition to that, we're pleased to see the growth in the core venues and events offering. And as Billy said, while there was a slight decline in e-commerce, actually, the underlying momentum has improved. So U.K. is our largest market. And what we're seeing in the U.K. is venues and events growing high single digits, U.K. online has been growing well into the second half. So we're seeing double-digit growth in H2 to date. We've seen almost 40% growth in new membership recruitment in the U.K. So the business fundamentals remain strong there. Growth, we see good retention across markets and opportunities for partnerships, et cetera, to expand in our key market. The [indiscernible] core business is performing well. The opportunities in Mainland Europe is expanding. Next up in America. Here, what is important to note is we are making strategic progress but we are experiencing very challenging economic headwinds, particularly by the end of Q4 last year due to kind of presidential elections came to life early into this year and the tariff impacts. So what we've seen from a strategic perspective is the change in our setup, as Billy alluded to, bringing in-house, the marketing and operations team. From a cost saving perspective, good payback. From a culture perspective, really good integration of the team. From an execution perspective, the team are delivering well, responding well to our direct control to shareholder -- to member expectations. So addressing key concerns, and members have had like flattish shipping costs and specific bottle prices, those have really helped. And those have actually helped to drive average bottles per order up -- average selling prices therefore average order value up all year-on-year and ahead of budget. Where the challenges come is twofold. First is that recruitment has been more challenging in the current conditions, and we're having to flex and adapt. There, we're having some success in the initiatives that we're launching into H2. So August was a record ever month for -- that's August for recruitment in the U.S. We're targeting whiskey clubs, whiskey influencers. And in September, we're launching a loyalty program in the U.S. So those are having some positive impact. But also, what we're seeing as a challenge is essentially, there's 2 impacts from the tariff. The first is the direct costs of the import tariffs, which the team has done a great job of mitigating. So this year, the cost will be a couple of hundred thousand pounds, a little bit less that like next year, which is painful for a business of our size but not catastrophic. The bigger challenge has actually been the indirect impact of the uncertainty in the market and what impact that had on consumer confidence, particularly with discretionary spend. So we've seen a pause with members in terms of spending. That has started to ease into H2, but it's still a challenge in the market. But what's important is all that creates short-term performance challenges, which Billy and I are managing our own way. It doesn't create any challenge, I think, to the long-term or medium-term strategic view that the U.S. is still the world's biggest premium whiskey market, and our specific opportunity in that market over the next couple of years is substantial, and we have the right team, really good brand quality, brand reputation and execution in the market to grow significantly in that market over the coming years. From an Asia perspective as well, as Billy started to allude to, it has been a challenging market, particularly in China over the last couple of years. Our business is now slightly less than half of the size it was a couple of years ago. But my view is we are seeing that now bottom. So H1 was down in part due to release timings. But actually, as you look into H2, we've had double-digit growth in August, I'm expecting pretty substantial growth in September. So that should feed through into relatively flat performance in H2. So bottoming of that curve in China. And I still think that while we're not assuming that market conditions improve, we are now hopeful that the risk is to the upside in that market. We are remembering if we were only able to get back to where we were a couple of years ago, that's another couple of million pounds of profit in the business. So we're not assuming that, that comes through, but that's an opportunity that we can get and that growth nurturing again. So then alongside the kind of key regions, we then have our strategic pillars that is set globally. Whiskey, membership, experiences, new brands and audiences and our people. And I'll touch on kind of a couple of key initiatives across each of these. First of all, what I'm really excited about. We mentioned it very briefly so far, and that's the launch of our Artisan Cask private cask offering. So you're going to get a chance now with [indiscernible] towards a short video that introduces this. So [indiscernible] [Presentation]

So hope you enjoyed that introduction close into the private cask offering. And just as a reminder, all of the private cask sales that we're talking about are all about an individual, group of individuals buying a whole cask worth of bottles. So that's not a cast investment scheme. They don't get the rights to the cask the company is selling. It's about buying a whole cask worth of bottles. But particularly for this initiative actually, what we found is in addition to a truly impeccable rarity, exclusive product with outstanding quality, actually, where we as a business can bring extra value is in the experience that goes with that, a true luxury experience offered to the cask owners and that has been a real uptick and that's really resonated with the market. And that's being led by James Mackay, who you saw on the screen there, who joined us in January, having spent the last decade or so leading Diageo, leading an exceptional whiskey and -- as their Global Private Client Director. So he's been a good addition to team in launching this. We obviously spend the money and done the work in H1 in terms of brand development and launch, which I think is fantastic. But that launch event really started in July in Monaco, followed by Singapore and New York and in the next couple of weeks in Dubai. That program is starting to work for a few hundreds thousand worth of sales [indiscernible] start to come through, but a lot still to go to hit kind of GBP 1 million mark by the end of the year. So that's the first part from a whiskey perspective. The second is from a bottle sales perspective of members. I thought it's worth just touching on Creators Collection. So this is one of the parts of the range review outcomes which has been successful so far. Creators Collections, we launched our first one at the tail end of last year. Those have gone from strength to strength. And the most recent release called the Worm Tub Trilogy, celebrating whiskeys from distilleries that use worm tub condensers, giving robust flavor and really resonates well. So in the U.K., selling out in a month. In the EU, in a week. And in the U.S., it's sold out in an hour. And in China, in just over a minute. So even in markets like the U.S. and China, which are having kind of broader struggles, where we have great quality products, great quality storytelling and execution at good value price point, that isn't a low price point, but good value price point. Those are still cutting through, and that's what we're pushing more and more to drive growth. So that's the first pillar on whiskey. Second is on membership and how do we grow and deliver a step change in membership. Part of that was 1 of our 3 key focuses for this year. So think about America, launch of that private cask program. The third was running that step change in membership. And as part of that program, one of the pieces is to look at partnerships. And actually here at Mount Bailey, an Australian [indiscernible] who came across the Europe from [indiscernible] last year also helped to bring across the partnership that had been successful in Australia, now work in the U.K. with Amex. And in the short -- over the space for a couple of months, we [indiscernible] 1,000 members into the U.K. with a fully loaded cost base, essentially net neutral cost of acquisition actually made a slight profit on the program. So a good recruitment to generating value. Alongside that, as we look ahead, what we've been working on is, how do we bring people into the society, making sure that whiskey-led messaging about VIP access to outstanding whiskeys really resonates. And from a product perspective, that means that every new member should get whiskey in and liquid to lips as soon as possible. So we have an outstanding membership and bottle product, which we've been selling on our own site. But actually, for the first time, we're going to take that product, a recruitment product and sell it on Amazon in the coming weeks. And what that will do is use it as a recruitment channel. It's still GBP 100, same price points that would be on the U.K. side. But as a way of attracting -- attacking a new audience, particularly the gifting audience to that key [indiscernible]. So hopefully, that should help to drive engagement and bring people into the world. It's important to note, as I say, it's not a sales channel. It's a recruitment channel to bring people into the SMWS story that otherwise would not have encountered it. Third pillar is around experiences and how we bring those experiences really across the world. We just talked about Australia, where the Australian champs, whiskey tasting [indiscernible], which is all run by SMWS, they're one of the biggest events in the whiskey calendar there, hundreds of people from across the industry, all under the SMWS banner, about the flavors and tastes of whiskey sold. That's a great event. The other 2 photos besides that kind of bottom left and top middle are from an event out in Guangzhou, where we had almost 350 people at that event. The bottom, you've got Single Cask Nation guy, [indiscernible] in Washington, [indiscernible]. And then [indiscernible] on the right-hand side, who is our new group Head Chef. We've been changing the food experience offering in venues, really elevating the quality of the food, but also importantly, the alignment of the food with the whiskey offering because what we want is the food to enhance and elevate the whiskey offering event. And as you can see from the results, that seems to be working. From the fourth pillar, so our new brands and audiences. And here, you can see how a few of these recent developments over recent years, we launched in Taiwan, third on that list, launched in South Korea, fourth on that list. And this year, added Vietnam. Seventh on the list is a new franchise. Signed a new agreement with India, which is [indiscernible] growing fast, but also started our first exports into Brazil. It's important to note that while I don't expect any of these markets to move the needle in the short term, we're talking tens of thousands of pounds in the short term. They all represent opportunities to seize markets as those markets expand. India is a good example where the current discussions in the agreement would be for tariffs to come down from 150% to 75%, but it's still a very high level overall compared to other markets. So a chance to get used to importation, working with a great partner, testing out provinces, whether Haryana versus Gurgaon or whatever works best for us, what the best hotel chain, the best way to bring the society to life in the market and testing and learning and developing those as we look for longer-term growth in those markets. The fifth part is about our people. We've really touched on the employee value proposition, how we strengthened. Importantly, we do an annual staff survey. We've got the best results for a long time there with an employee engagement score of 80%. Now our survey platform says anything over 70% is a good result, 5 percentage points year-on-year, as we really focus on an outstanding culture for the business. And as I said earlier, we've also strengthened the executive team with James Mackay joining, previously Global Private Client Director and Head of Rare and Exceptional Spirits for Diageo. And Emily having joined us as a new Marketing Director last week, formerly a Director of [indiscernible] Agency. And another brilliant addition to the team as she really hit the ground running over the last couple of weeks. Billy, maybe I'll turn it over to you to talk a little bit about capital structure and how you look at the use of cash.

Yes. Thanks, Andrew. So as we continue to grow and grow our profit and therefore, grow our cash generation, I want to bring to life a little about how we consider where we allocate that capital. So we break into 2 parts: operational use and strategic use. Ultimately, the investment in operational use is to drive growth or profit and cash in the business. So from a marketing perspective, ensuring we're investing enough in marketing to make sure that we're increasing recruitment and retention, but also reaching out, building the brand and meeting it to key new potential numbers. From a cask spirit perspective, we don't want to -- or sorry, we don't want a distillery. We buy our whiskey from every other facility in Scotland and from others around the world. So we need to continually be looking to invest in the right areas to make sure we have the right portfolio going forward to meet demand, but also where some prospective opportunities exist regarding returns on that cash, too, and I'm going to talk about that in a second on the next slide. And thirdly, from an operational perspective CapEx. And that has been like in recent years, where the challenging trading conditions exist, and we haven't [ invested ] much into that as perhaps we have in prior years, but that's always an opportunity. I really -- a really good example potentially where we are [ developing ] venue. That's where [indiscernible] CapEx. And on the right-hand side, the strategic use, we're very clear that we are not uncomfortable with our net debt position, and I'll explain that a little bit more on the next slide. But we are comfortable in marginally reducing that over the next few years as we do generate more profit and generate more cash. So that's one area we're definitely looking at in the short to medium term. And then probably perhaps in the longer term at the minute, the shareholder return to M&A, where cash, as I mentioned, is tighter and [indiscernible] condition. Those are much more of a longer-term objective after we achieved the profit and cash growth that we're going for. So if I go on to talk a bit more about that cask spirit side of things. As a business, as I mentioned, we don't want to start any [indiscernible] or whiskey. Currently, they're just under 19,000 cask we currently hold on our books. They were bought for a total of around GBP 28 million, and that's what sits in our balance sheet. Our strong balance sheet. Our balance sheet with GBP 28 million of assets on it is fantastic. However, it's important to note that we -- when we buy whiskey, we do tend to mature that. So whether we buy it and we expand, let it mature for a number of years, whether we buy the older, it still matures longer, that asset appreciates. And if you took those 19,000 cask and did a true market valuation on it, you get the bottom bar chart there. So last year, we did an independent valuation, sort of appointed somebody to do an independent valuation for us, which valued this 19,000 cask at GBP 100 million. That's really helpful to show the underlying strength of this business from an asset perspective. It's also helpful when we measure that against some key comparators. So for example, our market cap is currently just over GBP 30 million and enterprise values just over GBP 60 million. That asset valuation does seem [indiscernible] and were key to highlight the underlying value of this business to try and show that there is opportunity for greater valuation in this business from a share price perspective. And the last I'll finish on what's also helped as a comparator. If we were to look to sell these cask under a quicker approach, for example, with the bank, we have our financing facility. They always do our valuation each year through an independent company that says, if we decide to sell cask quickly in an orderly liquidating value, how much would we get for them. At GBP 50 million, that's half the market valuation, but still nearly double the net book value. So it's also a helpful comparatives to show the asset value. And on this page again, it's important to note that our strategy is to generate value in 2 stages, the first of which is that capturing the appreciation and inflation of the asset, and that part has start being very successful. We've spent GBP 28 million on an asset, which is now worth GBP 100 million. But ultimately, it's only worth that we can sell it and realize that value. And primarily, we want to do that by actually taking GBP 100 million worth of cask. And that in bottle value is about GBP 500 million worth of retail values of bottles that we own today. So the objective is to put those casks into bottles and sell them as fast as we can. Now in reality, in the short term, we're making some balances. We're realizing some more value for those cask and slowly but trying to still capture much of that GBP 100 million by doing it in a managed way over time. So if I wrap up with kind of current trading outlook, and then we can move on and take a look at some of the questions. So first thing to note is that trading in H2 to date has been in line with expectations. So head start in line. That Artisan Cask, which launched in July, started to get some momentum, a lot still to deliver in H2, but some good early signs of success. Preparation is underway from a product development and innovation perspective for the next phase of our range review in the coming week as well as new signature range. And we're also going to have additional Creators Collection releases and Heresy releases. Then what we're going to have is to deliver our full year guidance, which maintains the EBITDA focus of GBP 1.5 million. These 3 things, we're focused on delivering to secure that. The first is single-digit growth in SMWS bottle sales over the balance of the year. We've got a reasonable degree of confidence in that. As I say, trend's up double digits in August, U.K. is up double digit. EU was actually up double digits in August as well. So good confidence in the core bottle sales part business delivering. Then you've got the delivery of the greater year-on-year U.S. shipments. Now that our new route market is in place, those shipments are starting to go from a commercial perspective is good. From an operational perspective, we're producing that stock now. So there will be slight stock build in the U.S. in the second half of the year that, that stock will primarily be bottled now in [indiscernible] shipped into market in Q4. And then finally, the lumpier part of delivery, which is around that significant margin return from cask sales, both in the private cask sales, which I think has just started and it's gathering momentum, but also from trade cask sales, where we've already delivered GBP 2.5 million or so today. We've got another 1 month and a bit to go, but those are a lumpier part, and they need deliberate to take the numbers for this year as well. So overall, the market conditions are really tough. We are managing through them. We're still delivering profitable increase in profit, managing our cost base in the short term, making sure we're taking advantage of the opportunities in front of us while having a cost base that suits the short-term growth expectations, but still with a business with substantial opportunity for both over the medium to long term.

Okay. Thanks a lot. And I'm happy to move over and take your questions.

[Operator Instructions] I'd like to remind you that a recording of this presentation along with a copy of the slides and the published Q&A can be accessed by your investor dashboard. As you can see, we received a number of questions throughout today's presentation. [indiscernible] read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end.

No problem at all. So first of all, I'll start with the question, which says, please can you explain the share price performance over the last 3 years? So obviously, it's important to note, we don't control the share price. What we control is the company performance and our investor comes and hope we get that. What you've seen since our IPO is the AIM All-Share Index down 40% and spirits -- and large spirits companies, the average has come down around roughly 40%. Our share price is down a bit 60%. So part of that is a reflection of the market indications across it. Part of it is our own performance where we haven't delivered the full growth that we said we would set at the time of the IPO. Now while we were on track to 2021 and 2022, as conditions start to become more challenging in '23, we've got to adapt in place. And while we have still delivered a profitable improvement, they haven't been at the scale that we set out at the time of the [indiscernible]. So we are working hard to still make sure we are delivering profitable growth, though the timing and magnitude of that is slightly slower than it was that we hope to achieve at the time of the IPO. So that's the best I can even say it. But as Billy says, 2 things speaks -- my own perspective on this. First is, there is a significant gap between the current kind of quoted share price, which is a [indiscernible] pretty liquid on the kind of current share price, and the Board and management team's expectations are the real value of the business over time. So it's our job to try and close that gap. First of all, by improving company performance. Second of all, by engaging with investors to help close that gap. So that's the key insight probably on the share price. Second question says, there aren't many businesses where the stock gets more valuable over time. The external valuation is a helpful marker, but I largely ignore the in-house retail valuation. There's no data is provided on the age mix of cask. More info about stock value would be helpful. So here, we do try to share some information and I'd say that's one of the reasons that we've got external valuation of the stock to come up with that GBP 102 million number last year. From a retail perspective, that's a very good working. We literally say the 19,000 cask represents 5 million bottles worth of liquid. Our average sales price of liquid is GBP 100 per bottle ex VAT. So GBP 100 per bottle times 5 million bottles worth liquid, it's GBP 500 million. You're correct. It doesn't reflect the actual mix of ages and cask and distillery. It's a very crude working. But as an order of magnitude, it helps get some going. On a little bit more insights into the cask. We own casks from over 100 different distilleries from over 200 different mix of [indiscernible] being different mix, a huge range of vintages from new mix made in 2025, way back into the '70s and '80s. We also have now over half of the stock that we own now was bought when it was either new mix spirits, 3 years older still, or young spirits less than 3 years old. So most of the spirit that we now own has been bought when it was at that age of the spectrum. So hopefully, that helps provide a bit more insight into the stockholding. So the next question status, I understand that the Amazon tie-up is about driving new members. But for a premium product, is there not a danger of diminishing this by associating with Amazon? I mean, it's worth noting that Amazon do -- while their spread of demographics is different to ours. They do cater quite a lot to the premium space. So that's about our execution. How do we bring that to life and our quality of delivery. And I think for a business of our size, I think it's right that we test new ideas. We've been working on this for months, but the quality and execution, we've been consulting with members and people trust the business to make sure we deliver it in the right way. But I think that, that's on us to make sure it's a premium offering delivered in a premium way, we're creating a GBP 100 bottle of membership to clearly pitch at a different place to an entry-level gift, but we do think that there's a real opportunity there and well worth trying in the balance of the year. Okay. Next question, flip back up to the top. The company has a strong focus on adjusted EBITDA as a measure of profitability. But when can shareholders expect business to generate an actual profit? So you're absolutely right. And this has been a trajectory over time. When we first IPO-ed, the measure of success was revenue. Top line was growing at 20%. As we transition that through, the metric of focus at the moment is can we get to EBITDA as a proxy for operating profitability of the business profitable. And that's the trajectory we're on just now. Over the next couple of years, that focus will absolutely shift to real profit -- bottom profit after tax over the next couple of years. It's worth noting, though, that unlike many businesses, we have quite significant noncash cost of sale. And that is as we bottle and sell the liquid, we recognize the whole value, that net value goes through as a cost of sale, but it's not in cash. So actually, we are focused both on profit after tax. But actually, I think we will get to operating cash and actually probably net cash positive before we get to profit after tax. So we are focused on, first of all, driving EBITDA as a measure of operating profit. Second of all, gain positive cash, bottom line net movement in net debt within a year or so, and then on to both profit after tax. It's worth noting that some of those -- the bits below EBITDA, depreciation, et cetera, [indiscernible] will be fully depreciated relatively soon. We have quite substantial unrecognized deferred tax asset. So that path through to proper bottling profit will be faster than [indiscernible] was returning. Next question is for you, Billy.

Yes. We thought so, the question, please, can I see or provide an update on how the refinancing extension of the company's borrowing is progressing. Is a margin on the RCF from RBS and the inventory financing comparing -- expected to remain at 2.25%? So at this moment in time, I can't share too much information, but I can say that we are in the process of refinancing. So as a reminder, the current RCF agreement with RBS finishes in June of next year. We will be closing a new refinancing long before that. And the expectation over the next month or 2, we'll be able to confirm what that is. In terms of our interest rate level of 2.25%. It's not a balance interest rate level. I would like to reduce it a little bit. I wouldn't expect significant movement, but I think there's opportunity to do that. What we'd like to achieve is instead of 2 facilities is one fully combined facility at competitive way. And that's one we are making progress on and hope to update you on over the next few weeks or a couple of months.

Next question is, is there a date for when the next independent valuation of the inventory will take place? At the moment, I've got no plans to do that. Essentially, the exercise was more about putting a marker in the sand about this absolute magnitude, and whether it's GBP 102 million or GBP 92 million or GBP 120 million, the point is it's a substantial difference the net book value. And actually paying money to an independent valuer, it's important to keep that updated. I don't think it has value. So from a cost perspective, I think having done it once, we've got the message. Over time, we'll stop using that. We think it's too updated. But at the moment, there's no plans to do that. The next question, have we solved part cask sales? We see some distilleries sell 3 bottles from a cask. So what we have decided is that, obviously, you could buy 3 bottles from a cask because as part of our normal business model because everything we do is single cask, what we thought about whether we should offer from a cask sales, particularly the 58 cask bottle of where you and your friends can go together and buy a whole cask worth of bottles -- whole cask for the bottle, which will be bottled in 2033 as part of our 50th anniversary. You get to be part of the journey maturation. You basically get to buy in new make prices. So that's GBP 4,000, GBP 5,000, GBP 6,000 per cask. We thought about offering that and if we control the syndicate of buyers, but actually, we decided that it was easier to just to push the syndication on to the members. And that's what we find people have done. These mixes can group together with friends, one friend, 10 friends, 100 friends, however they want to split up and then own their cask together. So I think that's an easier way from an operational excellence way of delivering that. The next question, what are the Board and the company's brokers doing to attract new shareholders to drive demand for the shares that have increased the share price? So there's quite a few parts to the strategy. So first of all, overall, the long-term value of the business grows best in delivering improved company results. So that's our #1 focus. Let's get the business making more profit, more cash and on a growth trajectory. That's what drives the most value. In the short term, we are doing all in all things, we're doing investor road shows, we're engaging both with our existing institutional investors as well as targeting new businesses. We're in the middle of the interim road show. We met a few holders, a few nonholders. So more to come. But also one of the areas of strategic focus for this year was the retail base. As you may be aware, the liquidity in our shares is pretty low. So actually bringing in a new big institutional investor is quite challenging even if they're likely economics. So what we've been doing is trying to drive volume and liquidity through the retail base. And there's a few strands to how we've delivered that. First is more invested engagement. So that means we've been -- we relaunched our company website to make it easier for people to understand and engage with the company from a POC perspective. We've done more events like Investor Meet Company -- monthly, more outreach like that. The third is a flow of news, so RNS reach notifications about company awards, launch of Artisan Cask, entry into new markets. Keeping the RNS is the kind of core messaging, focused on the big ticket results, but a steady flow of RNS reach to people understand what's going on in the business. That has been reasonably successful. If you look at our share price year-to-date, we're outperforming pretty much any of the benchmarks, but we need to continue to keep the foot down on those. So those are the real areas that we're focused on. Next question, are our non-whiskey offerings working in bringing a different demographic of members and significant numbers? And the short answer to that is no. There are a piece of intrigue, single cask spirits, armagnacs, cognacs, gins, rhums. We know that people who drink whiskey don't just drink whiskey, they drink the spirits. I think there's a simpler way to bring gins and rhums to life for the society members rather than Scotch Malt Whisky Society, Single Cask Spirit Rhum, it's a slightly confusing proposition. So I think we can simplify the offering, but the core of the business remains about whiskey. So a little mix of the of the edges on others, but the focus is really -- continues to be whiskey. The next question, have you considered releasing a small part of the cask to prove the independent valuation of the store with the natural [indiscernible] can pay down a bit debt? We don't just consider it, we're actually doing it. So if you look over the last few years, cask sales, trade cask sales where we're taking those cask, selling them to trusted industry partners who are going to bottle it themselves. We've been doing that. It's gone from a few hundred thousand pounds a few years ago to a couple of million pounds in 2023, GBP 3 million last year, will be more than GBP 4 million this year. So by the end of this year, we'll have sold the thick part of GBP 10 million worth of casks, and those have been sold materially in line with the independent valuation, some ups and down, but materially, they've been in line with that independent valuation. And that's being used not just to manage cash, but to invest in the other areas of the business that we think will deliver long-term growth. And this was Billy's point about operational and strategic uses, where we've had a little bit of cash. Actually, we've said GBP 0.5 million investment in the U.S. next -- at the start of this year, it was well worth than -- 18 months payback on that investment. There are other areas where we thought that's a really good place to invest. So we've been doing that. We will continue to do that to deliver volume. Next question is, whiskey [indiscernible] the right competitor? And there are lots of whiskey businesses out there, which compete with elements of our model. There are whiskey clubs, but they tend not to own their own stock. There are independent bottlers, but they don't have the membership model or the breadth of our inventory. They are proprietary brands. So there are people who compete with elements for what we're doing. But no, I don't see them as a competitor to our whole global business model with the diversified brands and SMWS as a membership model underplay underpinning global -- bottle sales. So within the competitive -- broader competitive set, they're in whiskey, but I don't see them as a kind of direct competitor. Okay. I think that's all the Q&A -- complete, unless there's anything launched from anyone else?

Andrew, Billy, thank you for answering all those questions you can from investors. And of course, the company can review all questions submitted today, and we'll publish those responses on the Investor Meet Company platform. Just before redirecting investors to provide you with their feedback, which I know is particularly important to the company, Andrew, could I please just ask you for a few closing comments?

Yes, absolutely. So first of all, thank you to you all for joining. I see the business with -- in good health from a people perspective, from a brand perspective, encountering some short-term industry challenges but navigating through those, still delivering profitable growth, with an outlook where we're going to deliver single-digit bottom sales growth, delivering those U.S. shipments. And if we could deliver the trade cask from private cask sales in the balance of the year, we can build a full year profit, which represent almost a 50% increase full year profitability, and then building into long-term substantial opportunities for the business longer term. So really, thank you for your support, and please do answer the poll because your feedback really does matter to us. Thank you very much.

Andrew, Billy, thank you for updating investors today. Can I please ask investors not to close the session as you'll now be automatically redirected to provide your feedback in order that the management team could better understand your views and expectations. This will only take a few moments to complete, and I'm sure it'll be greatly valued by the company. On behalf of the management team of The Artisanal Spirits Company plc, we'd like to thank you for attending today's presentation, and good afternoon to you all.