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

Good afternoon, and welcome to The Artisanal Spirits Company plc Half Year Results Investor Presentation. [Operator Instructions] The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, we'd like to submit the following poll. I'd now like to hand you over to Andrew Dane, CEO. Good afternoon, sir.

Afternoon, Paul. Thanks very much. And afternoon, thanks all for those of you joining the webinar, a chance to present our results for the first half of 2024. So I'll start with introductions. Myself, I'm Andrew Dane, Chief Exec; joined here by my colleague, Billy McCarter, CFO. If we talk about the headlines, there are 5 key messages to cover. The first is around the improvement in profitability, which has continued with GBP 1 million increase in EBITDA versus the prior year, which I think is a pretty creditable performance based on relatively flat revenue in more and more challenging market conditions, and that reflects membership growth of about 4% versus last year, 2 percentage point improvement in gross margin and recurring cost efficiencies across A&P payroll overheads, which we'll talk about later. That flat revenue was supported by further revenue diversification, and that's both geographical diversification with the addition of the Taiwan and Korea markets, helping to offset some of the downturn in China, alongside corporate diversification with the acquisition of Single Cask Nation and growth in cask sales. The next point is the key around the significant asset value of the business, and we'll spend some time referring back to the update we provided in July where we had an independent third-party cash valuation exercise undertaken, which valued our assets at just over GBP 100 million, representing around 4x net book value and 4x net debt levels. Following on from that, the improvement in our cash profile, and following that significant investment just to deliver that upside, we're now at a point where net debt has peaked and the business is starting to generate positive cash and cash movements. And finally, underpinning it all is the outstanding quality, which is being recognized both in terms of individual releases but also for the brands across the range. So as the headwinds, we'll talk to them in detail. But first of all, a brief overview back of the business. At our heart, we're about captivating a global community of whisky adventures, and we do that by creating and selling outstanding limited edition whisky and experiences around the world. But overall, our ambition is to create a high-quality, highly profitable and cash-generative premium global spirits business. Underpinning that are our 5 strategic pillars across whisky, membership, experiences, new brands and audiences and people, and our strategic initiatives line up under those pillars to deliver on our ambition. When we look at our brands, we have the Scotch Malt Whisky Society, which we'll talk about mostly; Single Cask Nation, which was acquired in January of this year, and J.G. Thomson, focused on small batch blended malt whiskeys. But at the heart of the business is the Scotch Malt Whisky Society, founded in 1983, it's a global premium direct-to-consumer e-commerce business, selling outstanding limited edition whiskies to a global fee paying membership. The business model works by procuring outstanding whiskies from a wide range of distilleries, over 150 distilleries released to date. And as I'll mention later, 2 brand-new Scotch whisky distilleries to be released later this year. We own over 18,000 casks worth over that GBP 100 million, maturing those casks and bottling them at our own facility called Masterton Bond, funded using IPO proceeds and fully operational. We sell those under the SMWS brand exclusively to members. But it's about more than just great bottle shop. As I've said before, it's about the experience that goes with that. The 4 members rooms in the U.K. and a global presence where we bring that experience to life across all markets. So I'll now hand over to Billy to pick up some of the headlines on the H1 results for 2024.

Thank you, Andrew. So Andrew has given an introduction there and what we call out as it has been -- the whisky industry is challenging currently, but we find that we've achieved a credible performance in terms of revenues, so roughly flat year-on-year, slight decline, but in the main, it's flat revenue. What we're key to call out is that improvement in profit. So on this slide, you'll see the improvement in gross profit, so from GBP 6.2 million to GBP 6.4 million if we compare it to the prior half, which ultimately results in a plus 2 percentage points movement, plus 3% at an actual absolute movement. And then what happens is that feeds down to contribution, where we see growth and profitability there. And then as we go on the slide, you'll see that actually the cost savings and management and efficiencies that we've achieved in the first half versus the second half does mean that we have seen a significant improvement in profitability. So we'll come to that shortly. In terms of our membership, again, year-on-year, we've seen improvement, slight improvement at 4%, and that is slightly down in the year-end figure. However, what we would say is we're seeing more engaged member within the business now. Now we've taken significant steps to make sure that essentially, our members are actually tasting our liquid, they're getting the benefits of tasting the outstanding whiskies that we have within this business. And some of the things that are helping drive that, for example, is our Membership in a Bottle and our Renewal in a Bottle, so much so that many more members are actually choosing to take a membership or take a renewal with the liquid. What that does is that gives you longer-term engagement as they then take the liquid to their lips and then look to buy further bottles as a result. Now supporting that is still strong membership retention at over 70%, slightly down. And again, that's through us trying to ensure that we're not just passing through discounted memberships as such, it's all about the product and the Membership in a Bottle and Renewal in a Bottle. So one thing I'd say on that, and if you look at the lifetime value at the bottom, we've seen a lot of the declining members has come in the U.K. But where that has declined around 7%, the annual revenue per member has increased 8% to 9%, so it's far offsetting that. So we've seen that happen over half 1, and we expect that to further build as we go on and we start to see that more engaged member coming through. From a cask spirits perspective, again, we'll talk a little bit more, but key, we've continued to build our cask inventory, now sitting at over 18,000 casks. That cask inventory has a net book value of GBP 26.5 million. And again, we'll talk a bit more, but we've carried out an independent valuation. So a more direct valuation based on 2 sector experts, taking our cask holding at the end of June. And notably, they measure the value of that at GBP 102 million. So that's 4x the current net book value. And we'll talk about a little bit more about that shortly and how that compares to our market cap and the valuation of the business. In the meantime, we talked about revenue. I think the key thing for this business is the increased diversification. So where we've seen the new strategic markets of Korea and Taiwan deliver H1 performance against what didn't exist in H1 last year, given they came in half 2, we've seen an increase in cask sales of about GBP 0.5 million year-on-year, and we will continue to see that growth. And the introduction of Single Cask Nation from the 1st of January, all this new delivery in the business, sustainable new delivery has resulted in flat revenue, but what that has helped us do is manage to offset a significant decline in China. So we have seen a 30% reduction in China, similar levels to last year. The market is in a tough place, and that's largely driven by the local economy and the consumer sentiment, and that's really tough out there right now. But what we are clear on is our ability to diversify our revenue and continue to mitigate risk. As I said, those new strategic markets are sustainable recurring markets that will manage risk, and more importantly, when we see signs of recovery and what we would regard as the cyclical nature of the market right now, we will see the China growth on top of that as well. I think the other key point to note is Americas, as I've mentioned, [ SCN, ] we've seen flat depletions year-on-year, which when compared again with the market, some of the bigger players you have seen decline in U.S. So we see it as a resilient performance that can manage risk going forward as well and allow us to grow further. From a P&L perspective, we've mentioned that gross profit improvement and the feed through to contribution. I think it's important to highlight that GBP 1 million improvement on EBITDA year-on-year is in supported significantly by around GBP 700,000 of cost efficiencies within the business. Now all of that are GBP 400,000 relates to marketing. So as you can see, we've essentially deferred flat revenue on similar -- on, sorry, a lower marketing spend, 23% reduction. Now that's just ensuring we invest in the right places to recruit new members and to ensure we retain that more engaged member, and that's pure marketing spend. That's also supported by things like Membership in a Bottle and Renewal in a Bottle. With regards to overheads, we made some significant investments in the past years, particularly FY '23. So we invested in our tech road map, the new app. We invested in Single Cask Nation acquisition. And we're still looking at further opportunities within the U.S. market. The key thing there is those were spends that have essentially delivered something in FY '23 that we can now build on. Those spends will not recur. And alongside key management of costs like professional fees, travel, these are sustainable recurring benefits that will continue throughout the business. From a cash flow perspective and a balance sheet perspective, it is important to note that we do still hold a strong net asset position of GBP 15.2 million. And within that, a facility headwind of GBP 9 million at the end of June. Now from a cash flow perspective, if you look at the numbers on the right-hand side, you'll see, particularly in the net cask spirit spend and capital expenditure, those are significantly down in prior years. Now that's -- the spirit spend being, we have invested in cask spirit since IPO. The strategy has been to build up the cask spirit base, now sitting at over 18,000, to ensure we can meet future demand. We're at the point where we can meet future demand into the next decade. So as a result, there is more of a requirement to invest on a replenishment basis rather than a build stock basis. So what will happen going forward is what you can see in FY '24, we'll start to -- we'll also begin to exist in the sense that, that cask spirit spend has peaked. From a CapEx perspective as well, that goes to show in prior years, we invested and evolved. We've invested in our technology. We've invested in a lot of wood like the spirits, we -- the wood spend has peaked and will come down a little. And the outlook doesn't call for a huge amounts of CapEx in terms of tech road map because we built that in prior years and in venues. So what I would say is we are a business moving much more to sell sufficient cash. We've said that we're currently viewing our net debt as at its peak. We will be more self-sufficient. We'll start to -- the other key spend in there is interest payments, we'll be able to cover those with more of our own cash conversion, and that's a commitment we're looking to make. And you can see that starting to come through in the FY '24 half 1 numbers . So I briefly spoke about the independent cask spirit valuation. Again, 2 sector experts carried out for us. And I think it's really important to note that, that's 4x net debt value, it's -- sorry, almost 4x net debt value. It's almost 4x net debt. Now as I've said, we will look to be more self-sufficient and look to reduce our net debt a little bit, but we still believe that net debt level against the cask spirit that we hold is within our strategy. We're just not looking to increase it and become a little more self-sufficient. I think the other key point to look in here that isn't on the slide, we have a current market cap that's GBP 30 million, but an independent cask value of GBP 102 million. So there's significant and [ heading ] value within this business that our independent cask spirit valuation is more directly calling out.

Yes. And I think if we pick on that point about the cask value, and we call back to this business generates value in 2 stages. The first stage of that value is by buying casks, maturing them, capturing their appreciation. And that stage has been successful. We spent roughly GBP 25 million. It's now worth GBP 100 million. So that first part of the investment strategy has been very successful. But the long-term value comes from taking those casks, putting them into bottles and selling that outstanding liquid to our members and to our customers around the world. Of course, in the short term, we might realize some of the value from those casks, but the long-term value comes from turning most of those casks into bottles and delivering them to members, whether one bottle at a time or whole casks at a time, turning them into bottles and selling them to members, and that's where the long-term value comes. And that means turning those GBP 25 million of book value not into just GBP 100 million, but into GBP 500 million worth of bottles, which is what that current inventory is worth in bottle. Now key to underpin that is that loyal growing global membership. And we sort of talked before about lifetime value not being a directional metric, but rather being an indicator of the highly engaged members combining with high-margin model. Overall, our objective is to drive up total contribution, total profitability of the business. And we do that by recruiting more members, retaining those members, engaging those members and driving up margins and driving down costs. I'm obviously disappointed to see that number having come down a little. However, it's still a very substantial number. It speaks to the quality and level of engagement of those members remaining very high, almost GBP 1,000 of lifetime profit per member. When we think about our model, quality underpins everything that we do. And I'm not going to talk to every individual award, but it's more to capture the fact that across the group, we are winning huge numbers of awards, a record-breaking awards year, not just in individual bottles and individual releases, which reflects the quality of the liquid that were bought, reflects the quality of the wood that we have invested in, reflects the quality of liquid and the work of the whisky team and all those across the business. But also more generally, the whole business is being recognized with master awards like the Icons of Whisky Award at the New York International Spirits Competition, and the San Francisco World Spirits Competition, some of the biggest wine and spirits competitions in the world being recognized with the top accolades. Now as we talked about with the lifetime value, when we think about how we are marketing, there's really 3 pillars to how we do that: recruit, retain, engage. Focusing on new ways to recruit, as Billy talked about Membership in a Bottle, making sure we get liquid to lips as early as possible in a new member's journey, retaining those members by making sure they're engaged by improving the quality of [ comms ], by onboarding them fully and engaging them both in the digital and physical world. And that's the results of our investment in the Vaults with 22,000 visits. So our venue down in Leith since it was refurbished last September, as well as novel approaches like last week, we took the Vaults on the road on an SMWS roadshow around Germany, where over the space 6 events, I think 5 nights, we had 250 members in Germany, that's almost 1/3 of all the members in Germany, come to a tasting of some kind. Tickets, bottle sales, et cetera, generating substantial return and lots of engagement and interest in that market. So always looking at new ways to do so. We now put that into context of the global opportunity. It continues to be a significant and growing addressable market. On this chart, the bars represent the total size of the global ultra premium Scotch Malt Whisky market. And as a reminder, ultra premium price points in the U.K. are about GBP 45 a bottle upwards. And what it shows is that globally, that market continued to grow in 2023. However, there are a few nuances within that. And the first is shown by that line on the page, which shows the return of duty-free in particular, driven by global travel retail. So 60% of the growth in the market last year was in that global travel retail and duty-free space, a space that isn't necessarily right for the Scotch Malt Whisky Society, the opportunities like this, but it does represent opportunities for the broader group across J.G. Thomson, Single Cask Nation, et cetera. But also as you then dive into the individual markets, the way I realize it, there's a lot of numbers on the page, the headlines really are that in our key markets, U.S., China, U.K., Europe, actually, there was about a 1% decline year-on-year into 2023. In the smaller markets that we're in or the markets where we are smaller, those grew at 10%, but the relative impact was lower. Hence, the comment about flat revenue being a creditable performance in the conditions. What it does do is it opens up new opportunities. And particularly, if you look at the non-ASC markets, those in purple, there's a couple that jump out on the page, so Nigeria and Vietnam. Now in the short term, Vietnam would be a more a logical first step, given our successes of new markets in Southeast Asia, but also Nigeria is on the list as a longer-term target market. If we then look ahead to what people see happening in the industry, I think 2024 may continue to be challenging into '25, but then return to growth across the markets. And whether that happens in the earlier later part of '25 or in '26, we vary across the markets. IWSR's view is that there will be $30 billion of incremental total beverage alcohol sales by 2028, 2/3 of which to come from the U.S., China and India. And I would rank them in that order from our perspective, where the biggest opportunity is in the U.S., particularly in the short term, but it's a space we want to continue to invest in, get involved into direct control and operations and ensure that we have the right setup there with acquisitions like Single Cask Nation fitting really well with our ambition in that space. China, I think, will continue to be challenging over the period, but does represent an upside opportunity if the market were to return. And from an India perspective, it's a market that's on our list, but the importation taxes levy 150% means it's unlikely that we'll make material contributions from that market in the short or medium term. So in summary, profit improvement continues with that GBP 1 million improvement in the first half of the year, meaning we've actually already delivered GBP 1 million of EBITDA in the 12 months to June. That is in line with the full year consensus, so we just need to lap last year's H2 profitability to deliver the full year forecast. Supported by that revenue diversification, both geographical and corporate. The growth in that significant asset value that underpins the business, there's a huge asset value, as Billy said, a multiple of debt, market cap, net book value, any other useful metric. The improving cash profile with net debt having peaked and the business now being cash self-sufficient underpinned by outstanding quality recognition. And specifically, if we look ahead to the kind of coming months and what to expect, further international expansion, 2 completely new Scotch Malt Whisky distilleries, which is always very exciting releases for SMWS. The first impact of the refresh of our range, including new releases such as the inaugural Creators Collection, which I think is going to be wonderful release later this year, as well as some new casks released into the members casks program, the 50th anniversary program, which I think we're really excited, including some [indiscernible], all giving us confidence in the ability to deliver full year forecasts. So at that stage, I'll finish up the presentation. And I'll move on to the Q&A.

Fantastic. Sorry, Andrew, I missed that. I just want to say thank you very much, indeed, for your presentation. And as I say, questions wise, we have had a number of questions submitted, both presubmitted throughout today's presentation. So if I can hand over to you just to click on that tab, where appropriate to do so, readout the questions, and I'll pick up from you at the end.

No problem at all. So what I'll do is I'll start with the questions that were pre-submitted, and then we can work through. And the eleven was around, please, can you talk to the following specific overseas markets, the top 3 markets in Europe, China and India. So I think starting with Europe. From a performance, revenue was relatively flat, consistent with the business. The EU market achieved 14% membership growth in the U.K., an improvement in the average revenue per member, which was up 8%, helped to mitigate the 7% decline in membership. And particularly, that happened in the first quarter of this year as we removed any discounting on -- particularly on renewals. We found there was a large number of members who are basically only taking advantage of very discounted kind of renewal offers. But instead, focusing on those members who are engaged has helped to drive up spend per member as well as things like investment in the venues and those 22,000 people have now been to the Vault since its refurbishment. In China, China is definitely the most challenging market we faced with sales down by 30% and well off their peak of 2022. Although membership was actually up, with low double-digit growth in membership off a relatively small base. I think in China, what we're seeing is a bifurcation. So growth in sales of bottles between GBP 50 and GBP 100, which is something we've seen in all markets. So in all markets, we continue to invest in that space, making sure there's more releases, more price points that are competitive in that and often, while still maintaining the quality. But also at the top end, we are relatively small, so investment in recruitment events could add a relatively small number of additional high net worth individuals. And then finally, as I mentioned on India, it does represent an opportunity for growth in the long term. But in the short term, the 150% tariffs just make it too economically challenging for us. So that's the first one. The second one, and there's actually 2 questions, which I'll put together here. When are share prices likely to increase as they currently stand at 1/3 of the value since IPO? And the second is, how come the shares are worth almost 1/3 of that at the opening launch price? As a shareholder and as a CEO, I'm of course really deeply disappointed that the share price has fallen 60% since IPO and have continued to invest throughout. A key driver of that has been in market conditions since IPO with the entirety of the [ A ] market down an average of 40% since the date of our IPO and the average for retail customer -- retail companies, we're selling direct-to-consumers, down by well over 80% since the date of our IPO. However, partly, it's also a reflection of our performance in 2023 where we did miss our numbers, and we have to acknowledge and act on that. I mean, since our IPO, we have grown membership and revenue by around 60%. We've invested hugely in cask spirit, and with the recent valuation, it shows that, that strategy has been very successful with a GBP 25 million of total investment now worth GBP 100 million. However, we failed to deliver last year's profit forecast, and it did impact the share price. So we doubled down on our commitment to delivery of this year's results and hence the ability to improve profitability in the first half even when revenue is flat, and that's the bit weakened Q4. So that's the next two. The next question, I'm not sure if it's a real question or a sort of AI, copy and paste, but it quote simply Wall Street and a number of statistics in that. So what I'm going to do is I'm going to pull out a few of the specific questions asked. So first one is it says, only 1 in 6 analysts see a positive company forecast for the next 1 to 2 years. I'm not quite sure that means. We only have 1 analyst providing full coverage. That's our Nomad and Broker Panmure Liberum. And you can see their forecast for growth and for a path to profitability. The second is, the company is flagging risks, including having less than 1 year of cash runway. We, of course, don't hold huge cash balances. It wouldn't make any sense to do so when we have a debt balance. We do, however, have GBP 9 million of headroom in our facility, as Billy alluded to. So another risk comment we made about lack of new Directors, with only 1 new Director joining the last 3 years. I would note, I only took over as Chief Exec last year and Billy took on the role of CFO last year. I would also say, we have a really extremely high level of Board to support Billy and I as the Executive Directors. We added 3 new directors on IPO with Mark Hunter, the former Chief Executive of Molson Coors; Lesley Jackson, former CFO of William Grant and Stock Spirits; and Helen Page, who is the Chief Brand Officer at Virgin Money, and now serves on the Board of the Bank of Ireland. So they are really a fantastic addition to the team. And in line with the QCA code, we obviously continually review the Board's effectiveness and discussed this at last week's Board meeting as we continue to ensure we have the right Board structure for the future. Next one again is about share price. Since the current CEO has been imposed, the share price has collapsed from over [ GBP 1.43 ], and sales growth has slowed significantly. Why is this and what are the Board doing to remedy the situation? So obviously, since I took over just under 2 years ago, we have moved from a market which has seen very substantial scotch whisky growth over the previous years into a period where all in that space have struggled. So during the last 2 years, our share price is down 40%. That compares to 39% for Brown-Forman, 37% Diageo, 35% for Pernod. So across the whole space, everyone has seen challenges over that space. And while we slightly outperformed them in year-to-date share price, we are still well down as a respect of that approach. And overall, the Board remains fully supportive of our strategy to focus on delivering long-term value shareholders through profitability and cash generation from the business. That's the path to meaningful returns. The next one was, what was the rationale for offering members the opportunity to buy a full cask? It says, this idea is deeply [ flawed ]. It undermined the idea that the Society Tasting panel ensures we have the opportunity to share the very best [indiscernible] whiskies, selling a full cask was lazy and finance driven. It builds no way affinity with members while this strategy continues. So I would basically and completely disagree with that. We spent a long time thinking about, how do we bring an opportunity for members to buy a whole cask worth of whisky, whole cask worth of bottles? Steering well clear of any investment scheme or anything of that ilk. And I would say, the response from members has been very good. What we have done is we've targeted 2 ends of that spectrum, one at the very high end, high net worth, and I think there's more opportunity there where individuals are looking to spend GBP 50,000, GBP 200,000 on a private cask. So it's something the society can bring a huge amount of additional story and experience to members in that space. But also at the other end, actually finding a way to allow a much broader range of members to have their first ever opportunity to take part in ownership of a cask with the 50th anniversary program. And for the first time in our 40th year history, last year, we began selling the entire content, so the cask directly to our members. Once bottled, that would form part of the 50th anniversary range in 2033 from an extended range. Now the original casks were handpicked by the Tasting Panel from a couple of celebrated distilleries. And I'm delighted to say that feedback is very good. Almost 100 people taking part in that. I'm really pleased to say that we are actually going to be releasing 3 more distilleries into that range in the coming weeks, including 2 highlands and with very different styles as well as [indiscernible]. So it gives members a front row seat to see, be part of that whisky, see inside that cask as it matures over time and be part of it for an upfront price point of sort of GBP 4,000, GBP 5,000, GBP 6,000 at the start, similar levels again for [ duty and bottle ]. So that's been really good and more to come on that space. A question here about, are the offers to shareholders as good as we had as shareholders of SMWS? Shareholder bottling is interesting. Vouchers for venues have not used lately due to transport issues so no value. Overall, I'd say we're always happy to hear suggestions, but overall, shareholder benefits seem to be well received. So this is just to be clear that anyone who holds over about 1,100 shares -- sorry, 1,000 shares and is a member of the Scotch Malt Whisky Society can take part in the spirited shareholder member profile. I mean certainly, things like 50% of all renewals, stay generous, has been well received as well as some of the exclusive bottlings, again, going very well. The next one was SMWS's offering owning and bottling a barrel, I don't have 200 friends I would give a bottle to. So I'm not sure that's actually a question. I think it's just a comment. So that's all of the questions that were presubmitted. What I'll now do is I'll go through some of the ones that have been submitted while we're on the Q&A. So the eleven says, if the spirit stock is worth over GBP 100 million, yet our market cap is GBP 30 million, why not sell 1/3 of the spirit stock for GBP 30 and double the share price? This would be welcomed as most of us have lost a lot of money in the last year here. So I think there's a couple of points here. So while I understand that people might be looking at a book value of the share price and disappointed at the share price as I am, whisky, like the investment, is not about a short-term return. It's about long-term value. And that long-term value comes from taking that spirit stock and turning it into bottles over the long term. That's where the long-term value of this business comes from. Of course, in the short term, we are, of course, realizing some of the value from that inventory. We've been doing trade cask sales, we will continue to do so, continue to take advantage of that appreciation in the spirit stock, but I don't think it's appropriate to sell it at that kind of level. So we might increase it a little from where we are if opportunities present themselves. The second one says, greetings from Greece, and really nice to see Matt coming to you. This is reference to Matt Bailey, who is currently our Country Manager in Australia, who is going to be coming across to the U.K. next month to become a European MD. He's been brilliant, 9 years with the Society, the most recent 3 years as Country Manager of Australia, and brings a wealth of whisky and SMWS knowledge, too. So you said in the last 4 to 6 months, we do monitor a price rationalization. We have bottles at the range of EUR 60 to EUR 70, and we also see better spirit quality and taste. Are you going to further rational prices and increase the offering at the range of EUR 60 to EUR 80, et cetera? So pleased to see that the focus on making sure that there's a broader range of really good quality spirits at that lower price point is available. Certainly, as I said earlier, the kind of GBP 50 to GBP 100 price point, particularly that corresponding to the sort of EUR 60 to EUR 100 range is an area where we are continuing to make sure there is more and more liquid available in that range because it's a space that consumer demand is relatively high. So yes, that is an area we will continue to make sure there are plenty of releases in that space. Next one, how do you accelerate the transition of value from GBP 100 million to the GBP 500 million? Is there an additional strategy you could deploy? I mean certainly, I think that the acquisition of Single Cask Nation allows us to accelerate that growth in SMWS and new markets as a way of accelerating that and looking at cask sales and private cask sales are always that I think we can seek to accelerate. We also continue to look at other ways to realize value from that inventory. Next one is, how are your brokers helping to finance new shareholders? Of course, we're always looking to speak to new parties. The challenge at the moment is if you're fishing in the normal pond of small cap in fund managers, they have all seen substantial outflows over recent years and they're starting to see some inflows. So what we have managed to be successful at is approaching people with other investment angles, IHT, private client brokers, other private investors to try to get additional investment. Most successful to date, though, has been additional member investments. Next one up. Why have you not saved what you've paid for Single Cask Nation? Is the deferred consideration in shares or cash? Included in the detail of the notes to the accounts is the detail, it's all in there. It was a few hundred thousand dollars upfront plus an earnout, which is up to $0.5 million primarily paid in cash, though that, those funds were largely covered through both the combination of the original assets on acquisition and the piece in it. What we would say more importantly is the team have been a brilliant addition, Single Cask Nation has been a great addition to the ASC and delivering well, really well received and members and the consumers and customers continue to really appreciate the quality and spanning of the liquid. Last few here, possible answered but, how many members are also shareholders? From memory, it's around about 1,500. I can't remember the exact number. It was certainly around about 10% of members on IPO also invested, 10% of members at the time of the IPO bought over GBP 1,000 worth of shares after the period of the IPO. I think it's slightly higher now, but roughly 1,000 to 1,500. So that's it for all of the Q&A submitted. Thank you very much all for taking the time for continuing to be supportive of the business and of the shares. And I look forward to speaking to you again in due course. In the meantime, we will continue to focus on delivering profit, delivering cash and delivering outstanding risks. Thank you very much all. Thank you.

Fantastic. Thank you very much, indeed, for your presentation and answering all those questions you can from investors. And of course, any further questions that have been submitted, the team will be able to review those and publish responses where appropriate to do so on the Investor Meet Company platform. Thank you for updating investors today. And can I please ask investors not to close the session. You would be now automatically redirected to provide your feedback in order for the team can better understand your views and expectations. This won't take a few moments to complete and it is greatly valued by the company. On behalf of the team at The Artisanal Spirits Company plc, I'd like to thank you for attending today's presentation. That concludes today's session, and good afternoon to you all.