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

[Audio Gap] earlier this week. If you haven't seen it already, we have a note which we published, it's on our website. We're going to hear from the management team this morning, who will take us through the presentation. [Operator Instructions]. So without further ado, I will hand over to Andrew Dane.

Thank you very much, Hannah, and thank you all for joining us this morning taking the time to you for us. I'm Andrew Dane, I'm the Chief Executive. I'm joined here by Bill McCarter, CFO of The Artisanal Spirits Company. And just as a quick reminder, The Artisanal Spirits Company creates and sells outstanding limited edition whiskeys and experiences around the world, and we primarily do that through the Scotch Malt Whiskey Society. And if we turn over to that page, you'll see here what is the society? What is the Scotch Malt Whiskey Society? Well, it's global. It is a direct-to-consumer premium business selling limited edition whiskeys, primarily online exclusively to that worldwide fee-paying membership. How do we do that? We're not a distillery. We procure whiskeys from wide range of distilleries. We've just bottled 157 Single Malt Whisky, which will be released in due course. We're maturing 17,000 casks, treating over 1,000 products last year, and we bottle those under our own brand. [so to] say, selling them exclusively to members. But we're about more than just a shop for great whiskey. It's also by the experiences that go with that. And I'll talk a lot about that today, including those 4 member rooms in the U.K., one here in London. 2 in Edinburgh and 1 through in Glasgow. So we turn over and talk about kind of strategic framework for the Artisanal Spirits Company. Our purpose is to captivate the global community of whiskey ventures. We're going after people who are on a flavored journey. They want to explore and try the variety of unique whiskeys, which we have. But our ambition is to create a really high quality, highly profitable and cash-generative premium spirits business. And my view is we will do that by delivering the world's best whiskey experiences. And by doing that, we remain on track to deliver our ambition of doubling sales to GBP 30 million by next year. And in the short term, that's the path we're on, including inaugural EBITDA positive this year. Now when you think about what we've been delivering this year, we're going to talk about both strategic progress as well as financial and operational progress. I'm going to talk a little bit about strategic progress first, and then I'm going to hand across to Billy to talk about financial and operational performance. So from a strategic perspective, you can see at the bottom of this framework are 5 strategic pillars across membership proposition, membership experience, our liquid reach and our people. And if we go into the next page, you can see some of the initiatives and objectives -- strategic objectives we've been working on for this year that we will talk on -- touch as we go through this presentation. So I'll bring that to life a litlle bit. When we talk about our membership proposition, an example is right here in front of me, which is our new membership and a bottle pack. That will be available on sale later this year. From an experience perspective, refurbishment of the Vault -- the vault is kind of spiritual home of the society in [indiscernible] driving value from liquid with our prestige product range as well as cash sales program, all of which I'll talk about shortly as well as Masterton bond, the supply chain, cask warehousing bottling and order fulfillment, all being in-house now as of the end of May. Market reach, both in SMWS markets like the Taiwan launch as well as looking at how we can expand into new markets like America. And then finally, our people with real strengthening of the exec team with the promotion of Billy here, promotion of Rebecca Hamilton is our marketing and experience direct to bringing physical and digital experience into one place as well as the addition of Chris Leggett to the team as Business Development Director. So we've seen really good progress across all of these objectives and will put more about them in due course. But I'll now hand over to Billy to give some of the headlines and the detail around financial and operational delivery, too.

Thank you, Andrew. We'll go the next slide. So on this slide, we can see growth on the left membership in the middle, cask spirit on the right. So firstly, good performance. We've delivered revenue growth year-on-year, just over 3% at GBP 10.2 million, delivering a strong gross profit [still low] 60%. And we'll come on to talk a little bit more about the diversification of that revenue and our belief for full year delivery. In terms of our membership, what underpins our business is our members. So we're up 9% year-on-year in our membership, this is fantastic. We've also got a very strong retention level, which the lowest marginally down before is way above pre-COVID level and sat around 60% to 70%. And our lifetime value as a direction KPIs and as a reminder is still up 35%, it's ideal. And one thing we always talk about is the strength of our balance sheet. So we're currently sitting with around GBP 24 million of cash spent up on our balance sheet. As a reminder, that's held at cost, we must hold that at constant. But certainly, in the last year, we've seen significant inflation of that value and the middle section of that slide is to highlight. So essentially an external valuation, which we do with -- in junction with the [bank] actually values up GBP 24 million of cost on the balance sheet of our cask spirit, GBP 38 million, is a significant appreciating asset. And as a reminder, bottom right, if we were to bottle every one of those casks, always better to come out of it, it'd be roughly GBP 500 million. So it's a really strong balance sheet and future opportunity to deliver essentially what our members want. So if go to the next slide. This shows, again, we're always talking about how diversified the Global revenue is. We delivered GBP 10.2 million in the first half, which is up 3%, as I mentioned. And there are some key drivers of that. So U.K. venues continues to perform well from the end of last year, it's been the strongest performance on record. We've also seen continued growth in Europe. And we would almost like that, also like to highlight is continued growth in market side Japan, where since IPO is continually growing. So that's fantastic. There's no doubt China has had a slower Q1 from a relatively flat overall group performance in Q1, we delivered plus 7% in Q2, and that was predominantly driven by China in the first half as this center came out, we called it lockdown and a lot of people contracted COVID. But what we've seen is momentum in Q2 has continued into Q3, which gives us confidence that we remain on track to deliver our full year target of around GBP 125 million revenue. As a reminder, you'll see on the slide, the TAM of total addressable market, just shows the size of the opportunity that remains for us. We're 0.3% in the markets we currently operate in of the total addressable market. So there's a huge penetration opportunity and we'll continue to. So at P&L level on the next slide, what that leaves us with is an adjusted EBITDA loss of GBP 1.8 million in the first half, that is a result of the weighting of the half 1 half 2 revenue delivery. We've always said since IPO our business strategy is to invest in our systems and our people to improve and deliver growth. That remains the same. It's simply the delivery of revenue in half 1 is to lower than total weighting half 2. It's been much more half 2 weighted. And as I've said, we are on track to deliver that half 2 weighting, and therefore, deliver the revenue and EBITDA expectation in the second half, which deliver full year expectations. If we could move to the next slide in terms of balance sheet, what that means from a cash flow perspective, In the life, we've got a balance sheet. I've already mentioned some too much that strong net asset value driven by that cask spirit holding, so GBP 24 million and a net asset position of GBP 18.7 million, which was really strong. From a cash flow perspective, it's important to recognize we remain in line with what we said we would do. So our cask investment is starting to peak. As you can see, there's a net cask spirit spend on the right there of 0.7% compared to prior years, that will be lower. And we said it would be and it will be. And some of the important bits for us is change in net working capital is flat. And ultimately, the operating cash flow, but you can see on the slide, it's the half 1, half 2 weighting. As we delivered the half 2 profit and cash. We expect that to move into the marginal positive territory. And again, we do what we said we would do and remain true to our strategy and our objectives. Thank you.

Thanks, Billy. So we then think about the kind of the rest of the projects across our kind of 3 strength areas of the business, the pioneering model. And in particular, it's about that loyal value growing global membership. And if you look to the next page, it shows that breakdown of membership, contribution and lifetime value across all the markets. As Billy said, it's not a directional metric. It's an indicative metric that shows the value of members around the world. It shows that the quality of -- quality of those members, their level of engagement as well as the high margin of the model, delivering that lifetime value. And that's true across all markets. And as Billy says, that's up 35% since IPO. Though it is down slightly on prior year due to that drop in retention, the retention is still very high at 74% around the world. So the proposition does continue to land. And as a reminder what we have to do is to drive overall contribution across the whole business. And that comes from growing membership, growing levels of engagement of those members, driving up margin and improving retention and why people want to be a member. And overall, the net effect of that comes through in that life time value. We'll go to next page. One of the things that's really worth [minding] was scotch malt whisky Society operates a truly hybrid model, both in-person and digital experiences are really important. Now how that comes to life does differ by market. And I'll touch on what that looks like across the 4 biggest spaces of the U.K., U.S., Europe and China. In the U.K., it's most obvious with the 4 member rooms. And in the top left there, you can see an artist's impression of what the vaults are going to look like post refurbishment. And that's due to be open next week after GBP 0.5 million investment in the spiritual home of the society. And we've learned the lessons from what members tell us about why they love coming to venues, being able to talk to staff, there'll be a much bigger bar area where people can come and talk to the team there as well as being able to see more of the bottles on display and just really get to enjoy that wonderful, wonderful win. But also investing in the digital space and with the launch of an app later this year. Initially, the functionality will be around shop functionality because we know that most people in the U.K. are coming to the society on their mobile phones and making that as easy as possible for them. But similarly, in the U.S. We don't have venues that -- the 3-tier rules prohibit that, but we do have as a network of brilliant partner bars, and I was at both Jack Rose in Washington and Brandy Library in New York earlier this year, seeing members enjoying the society coming to life. But again, also pushing on that digital side. So we just relaunched the U.S. website last month, making that new member new visitor journey so much easier with the pathway of are you a member or not. Yes, and you go into the shop. No, over into path of -- are you here to buy for yourself, are you here to buy a gift which bottle would you like with your membership, making that journey really easy. Again, in Europe, we see the same thing. We've seen our network of 66 partner bars across Europe, really driving events in-person activations combining with some great festivals across Europe this year, meaning that Europe is our fastest growth membership region with new membership recruitment in Europe, up by over 30% year-on-year. So that's been brilliant to see and that's coming through now with both membership and spend. And then last but not least is China, but again, although the e-commerce drives almost all of the sales. In person is still important, and August of this year was our joint highest ever member -- joint highest ever month of new member recruitment. About 3/4 of that came from the whiskey [El] festival, the biggest whiskey festival in China, about 30,000 people attended that, and a few thousand of them came to the SMWS stall and going up about 120 new members joined over 4 days at that festival. But we -- again, we supported that with a TikTok program where we created a series of short video content around knowledge and engagement. So what is scotch. How does it mean telling people and educate people about scotch whisky, but through the lens of the society and then guiding them to recruit them into the SWMS. We recruited about 20, 25 people through that campaign, which doesn't sound like a huge number, but if you remember on the previous page, average lifetime value of a member in China is GBP 3,000. So that's over GBP 60,000 of gross lifetime value from 1 campaign in 1 channel in 1 market in 1 month. So that sort of brings to life that hybrid. And if we turn over, again, another space that I just talked about being released very shortly, personalized experience for new members, helping them to navigate into the society. And importantly, making experience feel wow, a really impressive experience to join and getting liquid to lips getting a bottle in front of new members as soon as possible because we know that by revealing the magic of our unique and outstanding whisky, that's how we get people excited and engaged. So that will be on sale in the U.K. before Christmas time and then rolled out to the markets as soon as humanly possible. So if we now turn over again, you'll also see that we've taken advantage of the fact that it's the society's 40th anniversary this year born in 1983, we're going to be releasing this absolutely stunning 40-year-old whisky, which I've had the pleasure of testing, I can confirm is absolutely wonderful. So that will be released in October. U.K. price of GBP 3,000, slightly higher than the international markets, but very much looking forward to that being so in October. So that's just some of the examples of the kind of initiatives that we've been working on and paying for in H1, but where the benefits come through in the second. The next key strength of the business is around that long-term global growth opportunity. And as Billy referenced, we turn over to the next stage, it really is significant and growing addressable market, driven by premiumization. Globally, the ultra-premium -- scotch whisky market for ultra premium price points and above is over $8 billion. And importantly, over $6 billion of that is in markets that we are already present in mostly in those top markets as shown on the page. And it shows by this year's movement to Korea in April being sixth on that list and Taiwan, changing to a subsidiary and a much more direct model in Taiwan in August are so important and support our ongoing growth, and that growth being driven, as you can see in the next page, 50% growth in that addressable market being driven by the continued premiumization story. So that really is a significant growing addressable market, with premiumization trends being driven by consumers looking for authenticity and status proven into the product, all of which lends itself beautifully to what society has done so well for so long. So it's a nice for everyone to be joining us. I'll turn over again to the final pillar, our robust business. Primed to deliver, Billy referenced, high margin over 60% contribution of over 50% and really unique access to wonderful whiskeys. And I'm going to talk a little bit about that now on the next page. So if we think about our investment in casks, that was a key use of IPO proceeds so to wind the clock back a couple of years. GBP 15 million of IPO proceeds to the company, and the idea was never to pay down debt, it was always to invest in stock in assets with about 80% of the IPO proceeds being used to invest in assets, spirit, wood, Mast and bond. And we're seeing the benefits of all of those already. But I thought it'd be useful to sort of split that into 2 examples here. On the left-hand side, GBP 3 million invested into older rarer casks, the higher price point but where there's an opportunity to generate both short-term and long-term value. So some of those going into society bottles right now, being sold through normal channels, generating a great return and bringing real fairy dust bottles to members around the world. But also some of those casks can become a 40-year-old whiskeys in due course as well. So short-term and long-term value. And then on the right-hand side, long-term value generation from this strategy of investing in younger and new mix for GBP 3.5 million invested since IPO and around about 3,500 casks that we currently hold now, which are bought when they were under 3 years old. So it's a very different [prism], but that provides both long-term value by the appreciate nature of the asset as well as a significant inflation hedge, and it's both that appreciation and inflation that drives the bank valuation, which has gone up by GBP 10 million this year. So that is value which is accrued to the company this year, but isn't in any P&L or balance sheet or in any of our numbers or accounts because we have to be patient and wait for that to come through as we sell the product in due course. Now this opportunity. This represents an opportunity to us. And if you turn to the next page, we've always had an objective of looking at how we do more in the cask sales space. Now we've always done some level of cask sales to trusted industry partners, and that continues as part of the trading nature of the Scotch whisky market, working only people who we trust as we swap products and get access to rebalance our stock portfolio. But we've also always been approached by people looking to buy casks and we want to stay well clear of anything that smells of speculative investments, cask investment schemes. That's not us, that's not what we're trying to do. But what we do want is we want to allow people who really want the whisky, we want to take advantage of that wonderful liquid, look to get them the chance for something different to what they get at the moment. So we launched a private cask sales program, which is where society members can buy a whole cask worth of society bottles, with a personalized touch. And we're choosing very carefully what those products are to make sure that this isn't about taking the crown jewels and selling them off to a small number of people. But where we have more than 1 or multiples of casks of a similar nature, where we get to release some in the normal way to members around the world, but where we can also put some into this space. And that's going to be both at this premium end of the space for casks of tens of thousands or hundreds of thousands of pounds with a really premium feel, all the way through to an initiative which will be coming out in the coming weeks, where there's an opportunity for a much broader part of the membership base to have an opportunity to buy casks worth the bottle of society bottles with a price point that's in the thousands of pounds rather than tens of thousands. So really excited to come and tell members more about that in the coming months. So that's when we talk about cask sales, it's really about those 3 sales. Create sales ongoing into trusted partners. Private cask sales premium of both premium and then also into the wider base. And then finally, our people who support it all and being the best version of ourselves is about both the people that significant uplift in the quality of the executive team as well as the wider culture sustainability governance of the business that means that we're best set for long-term success. As Billy says, we've invested in people, platform systems to support our growth ambitions, and we're doing well on that journey. So I'll now just finish up by talking about our view of what future holds and current trading outlook. So in the few weeks and months since the end of the period, we've continued to see growth in membership now above 39,000, including that successful launch of the new subsidiary in Taiwan. And then as we look ahead to what we expect from the balance of the year after relatively low levels of revenue growth in H1, accelerating into Q2, we see a continued acceleration of revenue growth in the balance of the year. with the positive impact of Taiwan and Korea, remembering they're new to this year so no comparatives in last year, better momentum and weaker comparatives in China, timings of shipments into the U.S. where continue to see growth in membership supporting growth next year that we will ship and recognize revenue for this year and further progress on those cask sales in the balance of the year. as well as the contribution from those strategic objectives, new app, membership in a bottle, 40-year-old product, et cetera. And therefore, we remain confident in our ability to deliver this year's consensus forecast, including that inaugural positive EBITDA. Now as we look longer term, it would be disingenuous to ignore the fact that there are ongoing wider macroeconomic conditions, and that the world looks like a more challenging place than it did a few years ago. And therefore, instead of saying that all of these initiatives and objectives allow us to outperform our targets, they are helping support the delivery of what we said we would do. But our globally diversified footprint. The loyal, highly engaged membership and the demographic of that membership, which helps insulate, not immune, but helps insulate us from the conditions, that significant growing addressable market premiumization trend helps make sure that we feel confident that we are positioned to continue to grow well, initially on that ambition of doubling sales for next year and continue to grow thereafter. Thanks so much. And I look forward to hearing any questions.

And why did you choose different operating models in Taiwan and Korea. Obviously on one side, you've got franchise in the other parts...

It's a good question. So again, if we just step back. The society is one look and feel around the world, but our corporate operating models do vary by market. So 100% owned, locally managed across the U.K. and Europe. Majority owned, locally managed in markets like China and Japan and now Taiwan, where we give the Managing Director part of the equity as an incentivization structure. We then also have franchises around the world, in which Korea is the new one. And then in the U.S., we have a different structure because of the 3-tier system. Now why different in those 2 different markets. Franchises are a really good way to seed new market. low-cost, profitable from day 1 and give us a chance to expand into new spaces quite quickly and easily. We've never been in Korea before. So we thought that franchise was the right approach to take a first step. . Now rather than places like recent franchise in South Africa or Mexico where we just worked with the partner bar owner, someone who already knew and loved the society and expanded, converted that into a franchise in recent years. Korea, we actually did a kind of beauty parade looking at different franchise partners in FG Korea, who we chose to go with blew us away with how they really understood what the membership was about, what society was about, and they've done a wonderful job there. So that's why we felt like franchise was the right approach into a new market. By contrast, we've actually had a franchise in Taiwan for a number of years. Now Taiwan has very specific alcohol rules including the fact you're not allowed to sell alcohol direct-to-consumer online, which is a challenge for D2C alcohol e-commerce business. But so what we move today is what we call an e-commerce light model. So members still get the weekly emails about product releases, they can still come to the website but they can't buy on the website, they get directed to express their interest, allowing us to fulfill the regulatory model around age verification and they go and collect their product. So since we were changing that route to market, we took that as the chance to move from a franchise up to a subsidiary and take more of the gains in what we knew was a great market for us. I hope that helps.

Very much, Let's stay in the Far East. China has been volatile. What's the longer-term picture? And are you confident in the market recovery?

Yes, I think it's fair to say that China has been growing so strongly in the past. I mean, if we went back to last year 60% growth order of magnitude in H1 of last year, it's fair to say we're not seeing that now. And while there is better momentum in China, our view of ability to deliver this year doesn't really require any bounce back in China this year. So broadly flat, perhaps this year, maybe slight outperformance we're seeing so far this year. And I think conditions there may continue to be more challenging than they were last year for a period of months, maybe a year or so. But one of the beauties of being so diversified is -- both global diversification means we're not dependent on any 1 market as well as product diversification means -- in reality, we might end up growing in China because the private cask sales program actually lands disproportionately well into Asia. So there are certainly still big opportunities for us, both in China and the wider Asia market. So in the short term, it's not quite as easy a win as it could have been maybe a year or so.

Okay. Helpful. Moving west a little. Are you intending to enter the Indian market?

Yes. Certainly something that we're having a good look at. I mean one of the challenges -- 2 big challenges in India are one, there's 150% tariffs at the moment. And then there are ongoing free trade discussions. And realistically, 150% might become 100% maybe might move down over a longer period of time, but it's not going to go away overnight. So that creates 1 barrier. Second is that India little bit like the U.S. isn't really 1 market. It's a whole series across the individual state's promises. So that means it's not quite as easy an opportunity. However, Certainly, we're watching very closely the kind of growth in premium consumption in scotch and certainly, it's something we would love to be part of. So no immediate plans in the coming days, weeks and months, but certainly one that's on the watch list.

Okay. We'll just finish on geographic counter. It's a bit less of a focus on -- in the presentation on the U.S., but online sales are doing extremely well. What's the plan there in terms -- I mean, you mentioned that, obviously, you can't open direct venues there, but partner bars, et cetera, to help support that.

Yes. So see, in the U.S., there's certainly more opportunities for us and that's both by and even better, with a wonderful Scotch Malt Whisky Society selling primarily Scotch into their market. as well as opportunities in the American whiskey space. And in the short term, we're already making some tactical progress in that space, and we sold more American whiskey in the first part of this year than we did in pretty much the 18 months forward so already making a little bit of progress in that space. But I think there's a bigger opportunity there, something that's more American whiskey centric, that the venues are probably not the space for us. Now if we look at venues in general over the coming years, I think it is something that we would expand but not huge numbers, maybe 1 or 2 in the U.K., maybe something else in London to support what is a great but quite small venue in the Greville Street, maybe places like Manchester, internationally, Europe -- China, the obvious option. But, one thing is what would that look like -- could range.So Obviously, in the U.K., we have a sort of established footprint where we own them, we operate them our staff directly controlled. If we were to do something else in the U.K., probably would look like that. But if it was international [sea] in China, we might work with the hospitality franchise partner. So we've given the brand [plated] make sure that the experience, feels, society, but actually the risk and execution on some the CapEx investments is with our partner. So and sort of approach the venues, changes around the world.

Okay. Well, back to London venues. Obviously, you've done some CapEx north of the border. What's on the agenda for London?

Yes. As I said, I mean, it's a wonderful venue with an outstanding team and we were there last night, with some [indiscernible] and the team there, and it's a great venue. No immediate plans to do anything significant. We always continuously invest in venues as I say, the actual size of the property there, the limits some of the options that we have there. So longer term, looking at how do we add the capacity one, but short term, there's no immediate punch, but anything really big ticket. If there are ever specific concerns or things we'll always address them, but no big changes in London immediately.

Okay. On to pricing, I mean perhaps you can give a couple of -- if we could start on casks, what sort of price ranges would the casks be? And then perhaps I'll say you could elaborate maybe for you, Billy, on the gross margin attached to those casks and whether they're similar in profile.

So first of all, I'd say, just in general, our approach to pricing it's hard when the product is unique that we've always tried to be that or below a sort of median of what might be out in the market. So this is not about taking out trying to price it the maximum it's ever been. But it's also not -- I remember and therefore, get a substantial discount versus what you could buy out in the market. And particularly, when there was a price increase towards the tail end of the last year as costs certainly took off everywhere. We're very careful about how we phase that pricing. And at the bottom end of the range, there was no price increase at all. So an 8-year-old [indiscernible] casks from cities there. No change in the price at all. As it walked [at the end], the bigger increases were really once you go into the old rare end of markets. We try to minimize the impact of price increases on [indiscernible] -- now, it's fair to see that still being challenging. I understand the price pressures that everyone is feeling, and we're trying to find something that's a fair balance of course. So certainly, no big price increases or changes in broader price strategy intended. When we then apply that same logic to kind of cask pricing, again, it's similar, we're trying to charge a fair price for what is an outstanding and unique experience. But that will range from some of these private cask sales will be hundreds of thousands. Some of them might be higher tens of thousands. But then also, we're looking at how do we do that in a space from the broader membership base, which is in the thousands of pounds. Now that still would be unaffordable for many but brings it into reach of a much bigger part of our society membership, and might even put in a space where groups of members can band together and buy a cask [indiscernible]. So as I said, more to come on that in the coming weeks, but that would be in the thousands of tons rather than the tens of thousands.

And on the margin, as Andrew says, we have failing levels of cask sales. I can therefore give you a specific number. What I can say is it is complementary to our current margin, it will be at higher margin levels. It's depending where you said it's still a premium offering. So it will only boost the margin of this business.

Excellent. And while I have you, can you talk us through the margin mix and why it's 2% down.

Yes, good question. So I think the predominant impact is the group mix of China. So as we went through the presentation, China has reduced year-on-year. So that's a significant impact on our group mix because China is 1 of our highest gross margin markets. That's around half of the margin impact in terms of other impacts. We've got some pricing elements within that. And you mentioned pricing a minute ago at some of the high level and perhaps and we've learned that that prism is too high, but otherwise, it's FX. So for example, particularly in Asia, particularly in China again. So China, both in terms of FX and in terms of its performance versus last year is a predominant impact of that margin head year-on-year, but it's still strong, still over 60%. And the key thing is with the delivery of the balance of the year to the number, we will be where we expect to be on margin.

Okay. Thank you. There's a question here about shareholder perks and how that could filter through to new members. But perhaps an opportunity to speak about a little bit more on the liquid to lips proposition, Andrew?

Yes. So we -- first of all, talk about the shareholder benefits. So we do have a program that's got spirited shareholder member benefits program. So that's for individuals who hold broadly more than GBP 1,000, 1,100 shares, and are also a member. And that includes things like half price renewal, access to exclusive events for last night, we were at exactly that, a tasting event last night as well as exclusive bottles, some of which were tested last night, and I think people have forgotten that they are available for sale to members. So -- shareholder members. So we'll be sending a note on that in the coming days. So there's a range of benefits and also includes occasionally discounts on J.G. Thompson products, we've had vouchers for using venues, et cetera. So there is an existing I think quite generous shareholder member benefit program. So that's open to anyone and new members and new shareholders can always join that program. There's information on our website, if anyone ever has any questions, they can reach out and we'll be happy to help on that. The second bit around liquid to lips, which is more generally about how the society expands its reach of audience. Part of the core proposition is exclusive access to full-size bottles like this, so it's wonderful product, which should be for sale just to members. But I think one of the ways we can bring people in is with tasting packs, the advent calendar. The other ways that people can engage and try some of our liquid. We know that venues, for example, are a great source of recruitment. Few thousand members joining our venues in part that's because that's often how people first find out about the society. So for people who can't come to venue, how do we get some of the wonderful liquid in front of -- in front of people. How do we get them to first experience the society through knowledge, through events, through miniatures through the doors so they can try them. So that's where we're looking to expand that liquid to lips and [indiscernible] to treat liquid in front of people as soon as possible because once they try it, they know just how good it is.

Excellent. Are there any other Asian markets where you see sizable opportunities?

We think the biggest opportunities in the markets we're already in. And we're always looking at where there are other opportunities. That having added Korea, big change in Taiwan as well as swapping our partners in Malaysia and Singapore recently, the kind of focus of those key changes having happened in Asia now so happened and now it's about debt quality reach in those existing markets. I think the markets we're looking at like that building more debt is in the American market. We always have an eye out on where else would be good. We talked about India earlier and we sort of go through that lens of which the markets are big enough, which ones are the trends going, which ones do the consumers kind of whisky education, whisky journey is at the right stage for us? What do the commercials look like? What do the regulations look like? So that's the sort of lens to which we look. So I would expect to continue to moving into new spaces, but there's now another big Asian development in the coming months in the pipe.

Okay. Is there an update on the value of the stock on the basis of its retail value. As the last number that this individual remembers was around GBP 490 million?

Yes. I mean, as shared in the presentation, that [remains] are in the same ultimately, I'll go back to GBP 24 million of cask value on our books, significant increase year-on-year due to -- of around 10 million that Andrew also mentioned, which means the minimum broker value should be in that GBP 38 million. As a reminder, we can't recognize that in our P&L or our balance sheet. And the value of the spirits that come out of those cask is still around GBP 500 million. The number of casks we held for the last presentation and results we did marginally increased, which is in line with our strategy. So that number is still around GBP 495 million.

Yes. Okay. finally, what progress is being made outside of the Scotch Malt Whisky Society?

Yes. So obviously, from JGT, the target this year was international expansion. So we got our first -- it's quite a lot of regulatory hurdles to go through to get product into the U.S. as anyone who's ever dealt with the TTB will know, Pleased to say that the first shipment has arrived in the U.S. ahead of sales in the second half of the year. So that's a good expansion there. We are actively looking at how do we do more in the American whiskey space. And we looked at 1 way of addressing that market earlier this year, but probably would have been a cash investment and EBITDA drag which in the kind of current market conditions would not have been well received. So looking at how else can we do that without needing an EBITDA drive without needing a big cash investment. So you're already starting to see some tactical pieces, as I say, American whiskey sales within the society already growing, but looking at how do we do more for less in that American space. So I think that's the one to watch in due course.

Great. Well, that's it for the questions today. So thank you to you both. A reminder to everyone, if you could please fill the feedback form when I end the webinar shortly. But otherwise, we look forward to an update in 6 months' time.

Thanks very much. Thanks, Hannah. Thanks, everyone, for joining us.