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

Great. Well, good morning to you all. Thank you for coming along today to hear from The Artisanal Spirits Company, who announced their full year results yesterday. We published a note covering those results, which you can find on our website, but we are here today to hear from the management team themselves who are going to take us through the presentation. That should take about half an hour or so. And then afterwards, there will be an opportunity for Q&A. [Operator Instructions] But without further ado, I will hand you over to David.

Thanks, Hannah. I'm David Ridley, the Managing Director.

I'm Andrew Dane. I'm the Finance Director here at Artisanal Spirits.

We're absolutely delighted to have you all join us so that we can take you through our strong set of 2021 results. Firstly, I'd like to start with who we are and what we do, and the Artisanal Spirits company is building a premium direct-to-consumer, high-growth, high-margin global spirits group. And in particular, our main focus at the core of the business is that we are the owner of the Scotch Malt Whisky Society, and they are a leading curator and provider of premium single-cask scotch malt whiskey primarily to sale online to a discerning global membership, and that is the core proposition today, and I'll take you on to some new brand opportunities that we have. But really, we operate in this significant addressable market that you can see there on the right-hand side, USD 4.3 billion, fast growth, over 200% growth since 2010. That gives us a large audience in which to grow our membership. And you can see there at the center of the page, we now have 33,300 members globally. And because we have a global membership that's really interested in that variety of these single-cask offerings that we have, we also offer them a vast range of spirits sourced from other countries, over 20 different countries that we've sourced. But the primary proposition is still the variety that we have within scotch whiskey. So I mentioned at the core of the Artisanal Spirits Company is the Scotch Malt Whisky Society. We've looked beyond that to other opportunities. We've launched a blended small batch brand called J.G. Thomson that I'll touch on in a moment. But also, there is an attractive USD 1.4 billion opportunity in the U.S. around American whiskey in a fast-growing market. Hannah, can we move on, please? On the next slide, here, you've got Anthony from our Glasgow venue. Very happy to welcome you back now that venues have been able to reopen post pandemic. And behind Anthony are some of the 900 whiskeys that you can try when you're at the Glasgow venue. I'm really pleased to say that over the last 3 years, we've received more than 200 awards across 7 very competitive spirits competitions as well. So many of those whiskeys that you get to try will be award winners. It's been a good start to life as a listed business for us, with results comfortably ahead of expectations and delivered against decisive moves into our strategic objectives. So a couple of highlights there on the page, 21% growth on last year to over [ GBP 18 million ]. Importantly, as we build our cask stock that converts into a retail value now of over GBP 430 million, an increase of 26%. And Andrew will touch on high lifetime values and the metrics that go behind that. But in particular, across the strong results, we've got high growth in key markets. I think that's really central for us is that we're concentrating on the big markets of China, the U.K., U.S. and a number of others, and we had a very strong rebound in terms of the U.K. venues in the second half of last year. And we've made those decisive initiatives against our strategic objective such as the supply chain facility. And again, Andrew will touch on that. But also not announced at the time of the IPO, we've also increased our interest in the Asian joint ventures as well, increasing our share by 10%. Hannah? Andrew?

Thanks, David. And overall, it's been our best ever year, so there's quite a lot of highlights to draw your attention to here as we move across the page. Firstly, that growth substantially -- a substantial growth comfortably ahead of market expectations, and that's both revenue and membership. Importantly, not just top line revenue growth but expansion in gross margin and as a result of the long-term suspension of U.S. tariffs, meaning that 21% revenue built 27% growth in gross profit. On membership, again, as well as that top line growth of 18%, really pleasingly has been the improvements in retention now up to a global average of 77%. And lifetime value is the outcome of that multiplier effect that we see in the business of having a growing membership, sticky members, high spending, combining with our high-margin model to deliver substantial expected member lifetime value. On the right-hand side, on stock, you see something similar from that multiplier where we're seeing a combination of volume growth from our investment in cask, particularly younger and new make that we'll talk a bit later, combining with growing average selling prices delivering that substantial increase in retail value, up GBP 90 million or GBP 430 million. Thanks. Back to you, Hannah.

So you'll have seen some of this before, but we've now put together our strategic framework on a page, and that is about doubling sales by 2024. We've got a very clear purpose here: captivate a global community of whiskey adventures, that audience that I was talking about, that audience that ultimately underpins that USD 4.3 billion market opportunity. I've explained the proposition before, and this strategic framework connects purpose to proposition to ultimately that ambition of doubling sales. And there are clearly drivers within that ambition. And most importantly, we have the strategic growth pillars, and I'll cover off those in a little bit more detail on the next slide. Thanks, Hannah. So here, we have the 5 strategic growth pillars. And across the page is what we said at the time of IPO that we would do and what we've done. And importantly, within the growing membership experience proposition, there's a number of facets in terms of growing in those key markets. You saw earlier, 57% membership growth in China, 18% in the U.S. and 20% in the U.K. Enhancing our digital experiences. We've been rolling out the big commerce platform, and it's about providing the best digital experience and ever-expanding digital experience for our members, but also about providing platforms for the various brand and market opportunities. So last year, delivering a [ dot EU ] site post Brexit and for the J.G. Thomson opportunity, a dot-com site as well. And we've made strong progress against the value creation side as well. And we'll cover off that in a bit more detail as well as with the complementary brands. Importantly, we need to have a talented organization behind this to really drive forward our strategic initiatives and make sure that we've got an engaged team that are engaging our members and making this whole proposition a really exciting one. Hannah? So moving into membership experience proposition. There's a number of points to highlight on the next slide. So coming up on the next slide, Hannah. You can see on the right-hand side that 33,300 members that I mentioned earlier. But importantly, that point that Andrew made about the growing retention rates, up 7 percentage points. And that's really down to the work that we're doing around the membership proposition, the content delivery that we're doing, improved web experiences, all of the elements there, the return to venues as well. But we've had that strong membership growth across the key markets. Importantly, a very strong tenure within the U.K. EU markets of 9 years. And we've overcome the difficulties of Brexit, and we've now got a route to market that is really being enjoyed by European members, whereby they're getting bottles within days of their order. And that really all culminated at the end of last year, where you can see a bit of a hockey stick in terms of global membership. And I believe that, that really sets us up very strongly for 2022 in terms of a tailwind as we move into this year. Hannah? Andrew?

Thanks. And [indiscernible] setting here around membership growth and here bring to life that membership value. Overall, we generated almost GBP 10 million worth of contribution last year. Pleasingly, we've seen an improvement in retention and reduction in churn at the members leaving the society. And overall, that gives us an expected lifetime for new members of over 4 years and improving. The math across the bottom so you can see how that contribution was across our average membership. So average membership during the year of just over 29,000 giving an average contribution per member over GBP 330, and that's up 20% year-on-year. Importantly, lifetime value is the outcome of our investment in membership growth, membership loyalty and membership engagement, which are the factors that we want to brag. We want a happy, engaged membership, which drives the spend and retention. And actually, you can almost look at that back to front and say the lifetime value, what we're really trying to drive is increasing retention, building the number of expected years, increase spend, improving margins, driving up that contribution per member, delivering increased profits in the long-term and return to positive EBITDA in the short-term. Thanks. Hannah, if you want to put on next please.

So across here, you've got the sort of journey that we have had in terms of e-commerce and digital content. I won't harp on the past, but certainly, we made strong delivery against our objectives in 2021, those that I've noticed in terms of the new websites on the Big Commerce platform. But within digital content, we've now got unfiltered our membership magazine, now fully digital and moving from a quarterly addition to monthly new content being delivered and opening up other channels such as YouTube with virtual tastings. Moving ahead, there will be more instances of the big commerce sites supporting Japan, Australia and so on, but also making sure that the experience within venues is also digitized more and more engaging for members as well. And on the content side, really pushing ahead towards having a global community of member mobile content, a sort of content hub and more CRM content delivery. So a lot more to come in that particular area. Hannah, if you can move on to the value creation slides for Andrew, please?

Thanks, David. And the third pillar is around value creation and improving margins. And there's 3 strands to this that we talk to. The first is around growing our spirit stock and value, and that's expanding that fantastic, unique and vast range of outstanding spirits that we hold. And you can see that increased retail value to over GBP 430 million. There also, it's the right mix of the right products. So it's the right bottles, the right [indiscernible] to cover everything that we plan to sell all the way through 2026 and most of the way through to 2028. But importantly, from a margin perspective, it's about buying more young and new mix spirit, the same fantastic quality spirit for the same distiller but buying it earlier and capturing more of its value. And we've done that through both ad hoc purchases, adding an extra 1,000 casks of new mix spirit this year. as well as an increased number of rolling new make contracts, now covering 275,000 bottles per annum across a wide range over 15 distillery makes that are covered on those rolling agreements. In the bottom left-hand side, you can see the value impact of that, moving from the cost of over GBP 6 per bottle for the stock that was being used last year, which was bought when it was ready, largely matured through to less than GBP 2 per bottle for the new make. And over time, the difference between that GBP 6 and the GBP 2 is an extra 5 percentage points on the margin over time. On the next slide, we'll then talk a little bit about the ex-sherry cask program. And to be clear, this is about buying more ex-sherry cask and allowing our expansion of our ex-sherry mature whiskey. And the reason that members love ex-sherry -- whiskey that's had a sherry influence on it and are willing to pay a further premium price for. On the left-hand side, you can see an ex-sherry cask typically cost around about GBP 500 extra, based on 250 bottles per cask. That's an extra GBP 2 per bottle, but the extra price impact is around about [ GBP 5 ] generating a substantial payback, and then over the life of the cask, we can bring that sherry over a period of up to 20 years from that accretive wood. On the next page, you'll see the final of the 3 strands, and that's around the supply chain facility, known internally as Masterton Bond. And as a reminder, there's 2 key parts to this. There is the financial benefit, margin upside of around 2 percentage points, which we should get next year once the facility is fully operational, but also the operational benefits of bringing in-house some of those services, which are currently outsourced. So cask storage, around about 20% of our cask could be stored per cask -- can be stored in this facility, bottling production, finished food storage and pick pack and match order fulfillment, all able to come in. On the next page, you'll see a picture of the big empty warehouse but pleased to say it's no longer empty. So our site manager [ Daryl ], an excellent addition to the team joined at the end of February. We've had the steel arrive for the cask racking. That's now in sight. The initial pieces of bottling production equipment also arrived in March, so initial work is now well underway and on track to be operational in the second half of this year. Great to see and great efficiency for the business.

Fantastic. Thanks, Andrew. Hannah, on to complementary brands. The first thing, J.G. Thomson. Now for some of you who are familiar with Scotch Malt Whisky Society will be familiar with the Vaults, and J.G. Thomson was the previous owner of the Vaults before the Scotch Malt Whisky Society purchased it. J.G. Thomson was a renowned wine and spirits merchant amongst Edinburgh. And importantly, one of the business partners of the business was the [indiscernible] family who were quite famous in the blend whiskey market at the time. We've seen a trend in the market of consumers moving away from mainstream brands and wanting small batch experiences, and this brand will focus on small batch blended malt whiskey. You see on the right-hand side the 3 core expressions, sweet, rich and smoky. They have a price point of GBP 43. We have some limited edition products that range up to GBP 200. And on the left-hand side there, a rum and a gin to add to the repertoire of the brand offer. The brand open to everybody. We have a direct-to-consumer e-commerce channel in the form of jgthompson.com. But also, we have got traditional distribution channels amongst whiskey bars and retailers as well. The brand was launched in November of last year, so early days in terms of sales results and distribution gains, tens of thousands of pounds of sales in the latter part of last year. But the main focus of this year is expanding that U.K. distribution and discussions are well underway for Europe and the U.S. as well. And what a great start to a new brand. Up there on the top right-hand side there, you'll see that we have already won multiple prizes amongst some of the toughest competitions. More recently, the IWSC with one of the J.G. Thomson products scoring 99 points, 1 of only 2 products to have received 99 points. And late last year, in the spirits business, luxury masters, also top trophy prizes and a number of gold across the range. So absolute recognition of quality in the bottle and a great start to a resurrection of J.G. Thomson. Hannah? And we see an exciting opportunity within the American whiskey market. It's a significantly growing market, $1.4 billion in the domestic market and importantly, at the price points that are relevant to us. And that premiumization trend is really being driven around the great number of distilleries that are emerging within the U.S., now 2,000. In particular, 200 of those are registered with the American Single Malt Whiskey Commission, about consumer trends similar to the J.G. Thomson trend of people wanting small batch single barrel offerings has really fueled that market. We believe that's perfect timing for a proposition that will concentrate on American single malt whiskey because also there will be U.S. legislation soon to define it as a category. And we believe taking our skill sets of understanding of a membership model, our understanding around single cask or in American sense, a single barrel, to the market. But we'll do that with partners that have got a huge amount of experience in the U.S. market. And the combination of the team work that, that will deliver, we really are very excited about the American whiskey opportunity. More on that in the coming months, and it's an opportunity for us in the second half of this year. Hannah? And all of this needs to be delivered by the right team. So we're building that team in order to deliver the growth ambition. So really across our culture, our team and organizational development. On culture, we've engaged the team around what our values should be, and we've really come up with a strong set of values that you can see down on the bottom left-hand corner. We all share these values. We work towards being outstanding on these values. So therefore, we have a common goal, and we all work together. And as far as team is concerned, we've been strengthening across the Board. We've had Mark Hunter join as our Chairman, ex CEO of Molson Coors. We've had Lesley Jackson joined, ex-CFO with William Grants. And we've had Helen Page from Virgin Money, which is a digital bank. We have recruited across the executive team. We now have Rebecca Hamilton, who is ex Jockey Club, so has quite a degree of experience around membership propositions, hospitality, et cetera, and she joins us as our marketing and e-commerce director. And that's allowed us to split the role that Kai Ivalo had as the Marketing and Spirits Director, so he can now 100% focus on our whiskey creation and our whiskey development. And we've got new positions and new team members joining as we expand the team. And in terms of organizational development, we've launched a leadership development program and a range of training to the team to make sure they grow with us as well. Hannah? Andrew?

Thanks. So I'll now take you through some of the financials, and I'll start with revenue, giving a little bit of insight into the figures behind those messages that we landed earlier and that clear growth in the U.S., strong growth in China with revenue growth, but even faster growth in membership setting us up for full growth to come in 2022, that strong rebound in U.K. venues, second half of 2021. Sales were higher than all of 2020. And importantly, for December 2021, despite the impact of Omicron going on, sales were almost back to the pre-pandemic level. So that's really good and gives us a great basis in 2022. Obviously, the one that stands out there is Europe, which is we're going backwards last year. All of that decline happened in the first half of the year immediately post Brexit, when delivery times were 2 to 3 months. By the second half of the year, it was 2 to 3 weeks. And importantly, at the start of December, we implemented a new route to market, product in market in advance of going on sale in a German warehouse and we're now back to 2 to 3 days, and we've seen a real uplift in European member numbers since that was implemented at the tail end of last year. So overall, really good results for the year, but also a really good basis for delivering more growth in 2022. On the next page, we'll go through a little bit more across the wider P&L. And really important to note here is as we set out clearly at the time of the IPO, we remain very much in a growth from reinvestment phase, building profitable revenue growth, gross margin improvement but reinvesting that into the cost base. So we have a very clear goal of returning to positive EBITDA in the very near-term and delivering bottom line profitability in the medium-term. In the meantime, building that platform of people and systems to deliver the growth that we want to achieve that ambition of doubling sales by 2024. So all on track for that. Then the final page around financials, we'll see that a bit of a wall of numbers around balance sheet and cash flow. The key message to draw here is a strong and well-capitalized balance sheet with almost GBP 25 million worth of net assets. And importantly, that's carrying that spirit at cost, but we know from the reinstatement valuations, there's almost GBP 10 million worth of upside available on that cask. That's not included in [indiscernible], so a well-capitalized asset-backed balance sheet. And as I said, we now own pretty much all the stock we're going to sell for the next 8 years, which also gives us significant protection against inflationary pressures as well as all the other advantages that it brings. So it's a really, really strong position to be in as we look forward. And I'll pass back to David to take that one and talk about what's coming next.

Great. Thanks, Andrew. So I'll look at the current trading in 2022 and the outlook moving forward. So in summary, really good progress with lots of potential. You can see there on the right-hand side, the trajectory towards that doubling of sales by 2024. And importantly, 2021 has delivered a very strong step towards that. And we've made a strong start to the financial year. To the end of March, our revenues are ahead over 30% year-on-year, and that certainly benefited from cycling over the U.K. venues in Europe, but it's certainly in line with our expectations, and there is strong underlying growth elsewhere in the business. And you'll see that global membership has further improved in only the first 2 months of this year, now over 34,000 members, an increase of 900 members in just 2 months. So what do we expect for the remainder of 2022 and beyond? Well, from a sales point of view, we've got strong metrics that are driving the sales. And it's not just in 1 market, it's across the diversity of our key markets. And remembering that each of those metrics multiply together to support that sales growth. And importantly, we've made decisive steps towards our strategic pillars. That of the supply chain facility that Andrew just went through, the improvement that, that gives us, the steps that we're taking towards the new and complementary brand opportunities such as the American whiskey opportunity. And importantly, from the digital experience point of view, rolling out better and more engaging content on our digital platforms and ultimately, a better user experience for all of the members to have there. So really, it's a combined effort across key markets and a really strong market opportunity ahead for us. So I thank you for your attention on the presentation. Hannah, I'll hand back to you in terms of questions.

Gentlemen, thank you very much for that helpful canter through. So let's begin. The tasting events are -- let me just skip on here. How did the partner bars work?

Okay. So the partner bars, we sell a range of products to them basically at member prices. They are free to sell that to the public as grams. And we ask them to give incentives to members in the form of maybe a free plate of peanuts or a discount on the brand. But we work with them in order to hold tasting events in their venues to attract people there, a recruitment tool for us in terms of a member type level of activity. They represent, depending on the market, 2%, 3% of sales in Japan, where there's a really well-developed partner bar program, something more in the sort of early double-digit in terms of total sales, which has ultimately affected Japan in the 2021 sales because of the pandemic and having a bigger portion of the partner bars. But it makes us ultimately more accessible to members and the public, and it's a sort of low-cost, 0 capital platform for us to make sure that we've got engagement points beyond just simply e-commerce and buying bottles, and that first taste experience of Scotch Malt Whisky Society whiskeys are really epiphanies for a lot of people to become members.

Helpful. Could you talk about competitors, particularly in the U.S., China and Japan?

Okay. Well, first and foremost, I think our business model overall makes us quite unique and very, very special. We have vertical integration in terms of the production process in terms of -- we're taking often now new make spirit straight off the [indiscernible], putting into the cask of our choosing, maturing it through, putting it through our expert tasting panel, bottling it with character and a story around it. And then we're making it available through our exclusive online, offline omnichannel offering, e-commerce venues, partner bars events, and then we've got our content delivery. And we really see nobody certainly of any sort of sale doing all of those elements. So from a competitor point of view, we have obviously competitors that are doing small parts of this. So we obviously have, within the vertical integration, the likes of Gordon MacPhail but then they're selling into a wholesale network and losing visibility of who their consumer is. You could then say Master of Malt, who are obviously an online retailer, have a little bit of the vertical integration with the boutique company. But generally, they are an e-commerce retailer. So there are competitors out there, but nobody that gives that sort of full service vertical and horizontal integration.

Thank you. Right. We've got a couple of questions here on sort of geographical reach and ambitions across these different regions. So first one here, does the marketing strategy differ much in Asian countries compared to the West? And how do you acquire customers in these markets?

Yes. I think the core brand proposition is quite consistent amongst the global offer. And that's really important for us. But clearly, there are local differentiation that we need to apply notwithstanding, obviously, the conversion into local language with regards to our content. And the audience are intrigued by different things. In China, for instance, they want to understand more about whiskey making and what goes behind it, where in the U.K., there is a much stronger understanding of that. So content will differ with regards to that. The channels that we operate in are slightly different where, for instance, in Europe, as I mentioned earlier, that physical channel is really important. So being able to physically attend events. Whiskey festivals are really important for recruitment for us, which was a hindrance over the pandemic there. But in the U.S., digital marketing channels such as influencers, whiskey bloggers and getting them to talk about us is really important. And in China, being available on platforms like Tmall and JD.com increases our reach and awareness. So we do have a market-by-market approach based on the way we need to interact with potential members and members in order to make sure that we're getting them the most engaging experience possible.

Okay. And then looking towards Africa, are there any plans to tackle these countries to target them? Premium whiskey is quite popular in some of these, and they might be smaller, but is there an opportunity with lower competition?

Yes. Well, I mean, we're certainly in South Africa at the moment, which is probably the most premium and largest of the markets. And we continually evaluate and explore opportunities. Regulation is something that we do need to consider in terms of things like product registration for a single-cask whiskey product is not necessarily in all markets the easiest thing to do. And it's also finding the right partners within those markets. But we are always exploring additional geographies.

I think an example there in South Africa is really relatively recently been added as a franchise. And the franchise model is a really good way to see new market opportunities to see whether that capacity was relatively low risk or management time or focus needed to kind of get some in operation.

Okay. Thank you. Now what about your route into the U.S.? We've talked about marketing. But in terms of selling, would it be a JV or a franchise model as you've done in the past or something else?

This is related to the American whiskey.

Just written, what's your route to the U.S. market. Expand on that.

Perhaps to be able to answer both instances, I mean, it will be the same as what we're already using as the SMWS. It won't be through exactly the same channels, but the actual route will be an absolute mirror of that, but there will be a separate structure operating that route. It's slightly different at the Tier 1 level, where we're using a domestic product rather than an imported product. But apart from the nuances there, the distributor and retailer channels will be the same.

Okay. Which market do you think will be bigger in 5 years' time, the U.S. or China?

Well that is a competition I have with both leaders of those markets, buying for that. I mean you look at the numbers, you would say that the U.S. should be the bigger of the market. It's got a head start in terms of the development of scotch. It is widely more wealthy in terms of the middle class and upper class in terms of the number of people. And it's a big population of people to be going after. But by the same token, China is a really exciting market. You've got an emerging middle class, real acceleration across there. And they're really into international products being seen to be understanding discerning products. So they are 2 fundamentally different dynamics and both are really exciting for us.

You've spoken there then about exciting growth opportunities. We've got a lot of callers on today who are our shareholders and have been for some time. How are you going to manage the opportunity for growth around quality of whiskey? As you obviously bottle the stuff younger and faster to meet demand, do you manage to maintain quality on that journey? Or is it a catch-22?

Okay. First and foremost, we will never compromise on quality. We have the tasting panel that gives the integrity to that process. Now as a product portfolio, we are not bound by the sort of constraints of a traditional whiskey company who might have a 10-year-old, a 12-year-old, a 15-year-old, and they need to bottle a certain volume at that age range. And ultimately, if we have something that doesn't pass the first time in the tasting panel, which is quite rare because we're very good at maturation and understanding when something would be ready even without having a first taste of it, is that we can put in another 12-year-old or a 10-year-old to replace that product so we can constantly evolve and be nimble and agile in regards to that. And if we have to, we could potentially extra mature that 11-year-old product and until it gets to that point of the right quality. We've laid down a huge amount of stock in anticipation of that future growth. So we can ebb and flow, and we don't have that same constraint as a traditional whiskey company.

Can I just also make a point of clarification because maybe wasn't there. We are buying spirit younger but it is the same quality of spirit from the same distillers and we are maturing it for longer ourselves. On average, we are selling a product when it's 12 years old, obviously, some is slightly older, some is slightly younger. We are not changing that. We are saying that we are buying the spirit earlier in its life. And we are doing more of its maturation, which I would argue gives it better quality, but I think that's maybe a slightly unclear and was part of the reason for the question. This is not about selling younger whiskeys. It's about buying younger whiskeys and selling the same fantastic quality.

And improving your gross margin?

Exactly.

Excellent. You've answered my next question. Thank you, Andrew. It wouldn't be an understatement, so probably go about 10 questions with people who are obviously disappointed with the and share price performance over the last - since IPO. So I know you guys are not in charge of macro global events. But is there anything that you would like to say to the shareholders who are concerned?

I mean it's not management's position to comment on the actual share price itself. But I can tell you what we are doing earnestly is making sure that we deliver on what we have said that we would promise to the market and meet and beat those promises. And we are doing that, and we've got a huge amount of confidence in and around that. And coming to investors and representing those results, answering their points of clarification so that they understand what the proposition is. And fundamentally, we are a distillery like proposition here in the way we're buying stock, laying down stock, so we believe that we inherently have a high valuation with a product that has high value, high margin in high-growth markets.

Okay. Thank you. Next up is the 8 year of stock of whiskey based on current sales or forecast sales?

It's based on forecast sales. So we basically have all of that in hand. It's inflation-proofed because we've already bought it at those prices.

Thank you. Gentleman here who's obviously attended some of the tasting events. Is there an opportunity to do a better education program focusing on key elements of appreciation, nosing, flavor development, et cetera?

Yes. More on that to come.

Excellent. Excellent, venues around the U.K. TBD. Great. Okay. And another one, are there any plans to open more SMWS venues in the U.K. following the success of the Glasgow venue?

Answer is again, yes. I mean part of the IPO proceeds were earmarked for exactly that. Some of it was earmarked for the refurbishment of the vaults. But certainly, we're exploring opportunities within the context of likelihood. Manchester looks like an attractive city, no venue there currently. Strong whiskey consumption there, so that fits a good profile of an opportunity for us. But we also like to look at taking the venue proposition internationally. And Germany would look an attractive opportunity, a good-sized membership base at the moment, strong economy, from a regulatory point of view, a relatively stable environment for us to be in. We are looking at other opportunities, but certainly stability and regulation are things that we need to be just mindful of.

So apart from access to some delicious whiskey, what other investor benefits can people expect this year?

Well, we'll have the opportunities to have an investor exclusive bottling later this year. So that's 1 opportunity. There will be shareholder events being offered, one in the latter part of May, early June coming up. So there will be various events, a product, and obviously, there are the various inherent benefits around the discounted membership, the vouchers and so on.

Okay. A question here asking me if the presentation is on the site. I noted a recording of this presentation will be on our site shortly, but I'm assuming the presentation is also.

If it isn't already up, it will be up imminently. It was being added. So yes, it will be available for. And that's on the artisanal-spirits.com under the section around investor information. All previous presentations and reports are there, so you can always have access. There's also a short video around about 5 minutes and 5-minute pitch TV giving a summary [indiscernible].

Wonderful. Final question on characters whiskey, and clearly not connoisseur enough. But Andrew, there is a view that some of the characters of whiskey comes from maturation of the distillery where it is made, for example, the Islay malt. And obviously, by you taking them away from that earlier, is there a risk to quality?

No, absolutely not. It's not to say that we're not in the case of Islay that we're not actually maturing it on Islay itself. That's to say also, many of the Islay distilleries take the spirit offing bulk tanker and fill it into cask on the mainland as well. But the sort of inherent balance of flavor and character is that around about 60% of the flavor of whiskey comes from the cask itself, 40% from the spirit itself. Obviously, in the case of a piece of whiskey, that is more pronounced, more sort of dominant with regards to that, but we will make sure that the maturation is well understood in terms of that.

Yes. And as David pointed out, when we acquire a cask, often, it doesn't move. It still sits at the distillery. It's just we now own it. So the timing of that acquisition isn't the same as moving it.

Helpful. Thank you. The J.G. Thomson brand, does it have separate management? Obviously, it's sort of a different approach. So is it a distraction? Or how does that fit within the business structure.

I mean there is a dedicated team as far as the sales and the marketing are concerned with regard -- with regards to that, and we're developing further support in and around that. But it is a different proposition in terms of the way we acquire the spirit et cetera. So it is not a drag on management's time with regards to that. That's why it's a complementary brand for exactly that purpose.

Well, that's it for questions today. So gentlemen, thank you very much. We look forward to hearing from you again in 6 months' time. And any final words, David?

Well, as I said earlier, a really strong confidence around our delivery on the doubling of sales to 2024, very much underpinned by our decisive steps forward in terms of our 5 strategic pillars and the delivery on those and then ultimately driving those key metrics that Andrew and I have covered off and that multiplier effect of an improvement in all of those build a bigger outcome at the end of each of the years. So confidence looking forward, high-value, high-growth business. And ultimately, one that should be recognized in the market for exactly what it is.

Many thanks to you both.

Thank you very much.

Okay. Thank you, everyone. Thanks, Hannah.