The Artisanal Spirits Company plc ($ART)

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

Good morning, all. Thank you very much for joining us. And welcome to this presentation on the Artisanal Spirits Company. First of all, we're going to take you through an overview and intro of the business, a bit of a trading update, conversation around the strategic progress made this year and then update on current trading '26 and outlook. And what's important to note is that at our heart, we are a whiskey business. We've got a vision to be the home of the world's most remarkable whiskey brands, all of which create and sell outstanding limited edition whiskeys and experiences around the world. Now our heart is the Scotch Malt Whiskey Society. And in a moment, I'm just going to show you a quick video that hopefully brings to life that journey of a society bottle through our sourcing and our maturation, our creation, curation and tasting panel through to bottling them in our own brands and sell them to members around the world. So I'll now hand over and we will play a short 1-minute video. [Presentation]

So that shows the journey of a bottle. And from a business perspective, the society has a global footprint, delivering premium, limited edition outstanding whiskeys to members through a direct-to-consumer model, primarily online as well as the 4 fantastic member rooms here in the U.K. Now we often talk about SMWS, and I thought it's worth just pausing to talk a little bit about Single Cask Nation, which we acquired in 2024. Now while its principle is well aligned with our purpose of creating and selling those outstanding limited edition whiskeys, it's buying whiskey peat or whiskey, there's 3 key differences to the society, which I think are worth highlighting. First of all, 2/3 of the footprint is based in the U.S., which aligns with our key strategic focus area. The second is that 2/3 of sales are through retail channels, which are not something that's really part of the core D2C SMWS model, but are a key area of focus as we look to grow and expand since most people buy the whiskey through those channels. And finally, although 1/3 of the business is still in e-commerce, that e-commerce is not through a paid membership model. Anyone can go on the site, join the nation, become and buy bottles from Single Cask Nation. Alongside that, we'll talk later on about strategic progress, but another addition to the brand portfolio is Artisan casks, which was launched in July of this year, is really targeting high net worth individuals with a luxury cask experience, but again, where people are buying a whole cask worth of bottles and enjoying some outstanding old and rare whiskeys from across our outstanding inventories. So that hopefully brings slide a little bit of the group. Now what we'll show next is the headlines on the results. And obviously, some mixed but resilient performance against the backdrop of what has been pretty subdued demand, reflecting that ongoing global economic and political uncertainty that created headwinds -- but what's important to note is that the reported results contain a lot of noise that we will talk through in a moment about what's going on in the U.S. But excluding the U.S., revenue declined by around 2%, a little under GBP 0.5 million with a similar size reduction in EBITDA. And that's the basis for that comment about mixed but resilient performance. And excluding the U.S., we saw that resilient performance. In the U.S., we saw the distortion results, which Billy will walk through. But at our back, we talk about retaining a really substantial high-quality, high-value asset backing of over 18,000 outstanding casks, and we continue to make that strategic progress in the U.S., the launch of Artisan Casks as well as the core SMWS proposition, which we will talk to you later on. And all of that gives us confidence in our ability to build a credible path towards GBP 30 million of turnover, double-digit operating profit margins and cash and PBT positive. So I'll now hand over to Billy.

Thank you, Andrew. So Andrew has mentioned and what we'll try and do in the next few slides is just bring the financial performance to life. And what I want to start with is a look at our revenue performance and start with just trying to bring out how does that look without the noise of the U.S. and on the next slide, talk about the U.S. specifically. So if you look at the chart, basically, our revenue delivery was around flat and has been around flat for the last 3 years. Now there's recognition that the whiskey industry has had its headwinds in the last few years and that remained in 2025. So within that resilient delivery, we've seen growth within Single Cask Nation of around 10%. We've seen growth with regards to our cask sales, which grew double digit at 13%. And we saw growth within our venues of around 8%, which is really pleasing performance in a difficult landscape. What offsets that to get to a position of around flat U.S. is China continues to be challenging and as wider Asia, to be honest, with that declined around 20%, but we remain well placed there as hopefully those market headwinds start to turn to tailwinds, not necessarily expecting it very soon. But if we get to a position where we're able to achieve flat to small growth, we'll be well placed to continue to get back to growth in the market. Within the Americas, what I'm going to try and do is pull out the 3 key elements within our numbers that the America and Hudson. So the 3 key elements being last January, we made a GBP 0.5 million investment with our partner to start the process of looking to move to a new longer-term route-to-market partner where we could achieve savings and take more direct management. So that was a cost of GBP 0.5 million. And then the other 2 in relation to the U.S. government shutdown and the stock transfer provision were Q4 impacts. So noting that, as a reminder, we create 1,000 SKUs a year. Everything is very much more just in time. So when the government shut down in Q4, we couldn't get label approvals for the 2 shipments we plan to make. And those were 2 shipments at revenue of around GBP 2.4 million and EBITDA of about GBP 1.8 million. So we just could ship them. When it reopened, the delay was too long, we could do in FY '25. And then the final piece being that allowed us to accelerate the move to our route to market -- new route-to-market partner. And what that means is as of yesterday, when that changed, there is an element of stock that we need to take that, which is valued at around GBP 1 million. So we created a provision -- a revenue provision of GBP 1 million for that, which is GBP 0.8 million. The sum of all that is a GBP 3.1 million EBITDA impact to the group. So as Andrew mentioned, when you take away that element of it, we are a lot closer to matching last year's GBP 1.1 million EBITDA delivery. So -- if I then move on to the next slide. I'd just like to build on the U.S. again, and Andrew will come to talk to shortly as well with regards to our strategy. The U.S. has been a tough market. There's lots of spirits majors you'll have seen in a similar position. But what the purpose of this chart is meant to show is we did see kind of growing decline at the start of 2025. But what we have seen is we have seen that come back. And actually in Q4 '25 and Q1 '26, we have seen elements of growth in the U.S. market. So we think, again, we're well placed there to take advantage through a new route to market, through more direct management and really try and achieve growth and turn the 7,000 members in the U.S. up to a much higher number. And then if I just finish from a profitability perspective, what's key to this business in the last couple of years has been management of cost base as we have had some challenging headwinds. So I've talked about the revenue. If I talk about the key points in this chart, gross margin, gross margin is down around 7%. Around half of that is the impact of the U.S. that I've just discussed. The rest of it, 3.5%, some of that, a smaller than that is to do with also the U.S. and the fact that we faced tariffs this year, around GBP 100,000. The rest of it is heavily linked to a product mix. We are definitely in a whiskey market where people are perhaps trading down in some elements. So we have looked to make sure that we have the range of SKUs available to meet a number of requirements. And there's a recognition that the gross margin in industry is down a little. But without the U.S. impact, you would expect that to be around the 60% level. And then lastly, I highlight the importance of managing our cost base. You can see across commission, marketing, payroll and other overheads, we saved about GBP 0.8 million in the year. So that's on top of the savings that we achieved last year. And if I just dive into a couple of those quickly, from a payroll perspective, the purpose of this chart on that red box is to show an inflation adjusted F '20, our payroll base has only grown GBP 0.4 million. And what that does is it excludes the impact of inflation over that period of time. It incorporates the fact that we now have direct management of the SMWS America team. Previously, we essentially paid for that through the 30-year partner. But through doing that, we have way more direct management in there, and that's where we believe we can achieve our strategic aim of growing the market further. And we brought new business of Taiwan and Single Cask Nation. Again, payroll brought in to deliver on key business segments. And then we opened Masterton Bond. So again, we have our own supply chain facility where previously we repaid for third-party [indiscernible]. And then if I then dive down one place more, if you look at from F '23, F '22 being the year where basically the business performed extremely well, and we've seen kind of decline since due to the headwinds, we have reacted to try and manage our payroll cost base. And on this chart, you'll see 2 key bars to the right of [ 1.3, 0.8, 1.6, ] where we have reduced our payroll by around GBP 2 million through efficiencies. Now that's been required given the headwinds. But I'd also say that has been achieved through efficiencies and productivity in the business. So bringing in good new hires over the last few years, but also system efficiencies and tech efficiency and been able to do that and still continue to do the work we need to do. And lastly, from a cost base perspective, our marketing absolute spend has almost halved from around GBP 3.1 million to GBP 1.7 million. But importantly, we've managed to keep the recruitment levels at a high level. So in 2023, we brought around 13,000 new recruits in. In 2025, we brought nearly 12,000 new recruits in. So we're doing more with less. We are getting more bang for our buck. That's important. What's allowed us to do that is focus, clear focus on immediate return on recruitment, on retention. So we'll finish in the last couple of slides from our balance sheet perspective. So the loss in the year has impacted and has resulted in a net increase of GBP 31.5 million. The other key thing being as we've moved in the U.S. from a shipments model to depletions model, there's been a catch-up in FY '25 to balance the cash element of that. But what I would say going forward is we are well placed going forward to deliver the profit we need to deliver and deliver around GBP 0.5 million of marginal net debt reduction. We are comfortable with the net debt if you consider in a minute, I'll come to the value of our assets. So we want to see net debt reduction. There are a couple of key things that will help. I mentioned profit, which we set to deliver this year. The other thing being we have more cash than we currently need. The rebasing of the market over the last couple of years means we have a surplus of casks. So our cask investment in spirit and wood will significantly reduce as it will in CapEx. So we are committed and planned to achieve a net debt reduction through all those areas. From a capital allocation, I've talked about net debt and that key focus on marginal net debt reduction. When we consider what the remainder of the balance is, I just spoke about marketing spend. Now marketing will drive growth in this business. So it's always a consideration for our capital allocation and will continue to be this year. I spoke about cask spirit and CapEx. We are -- there is a less need for a significant investment I've seen in prior years of GBP 3 million to GBP 4 million that reducing to around GBP 0.5 million. And then from a strategic perspective, we're always looking at M&A opportunities where that's affordable based on our balance sheet. At the minute, there is no dividends planned as I'm sure you can appreciate given the current capital allocation position, but something in the future for us to consider. And lastly, our balance sheet is strong because of the cask spirit that we hold. Now this is a reminder that what we bought almost 90,000 casks on our books is around GBP 28 million A couple of years ago or 18 months ago, we got a valuation of our market value. If we look to sell those quite naturally over a period of time in the market, that gave a value of those casks around GBP 100 million. And every 6 months, we do a valuation by the bank with an independent valuer around if we ever needed to do something from a liquidated basis, and that came out at GBP 50 million. So our casks holding has a range of GBP 50 million to GBP 100 million, and this is at the minute, [indiscernible] is at the lower end of that range, [indiscernible] with the bank value. Back to Andrew.

So that hopefully gives you a bit of insight into what's been happening with the financials of the business. Now I'm going to talk a little bit about the strategic growth we referenced. So at the start of the year, we talked about 3 areas of focus. [indiscernible] cask, America and the SMWS proposition. And I'm just going to talk a little bit about what's happened across each of those 3 areas. First of all, we launched Artisan Casks in July of last year with events in Monaco, Singapore, Dubai, delivered around GBP 300,000 of sales last year with that number already having been beaten in the first 3 months of this year. So taking the last 12 months number to approaching GBP 1 million worth of sales from that new brand. And that's about nurturing and growing that brand, making sure that over time, we're delivering the customer experience that feeds a nice positive feedback loop for those people to refer other people into the program as well as become repeat purchasers. So that was launched last year. And obviously, this year, one of the upsides is full year effect of that brand alone. Second piece, the U.S. Now we talked a lot about the one-off impacts on reported results last year, but I thought it was worth just pausing before we talk about what things we've done to say why are we doing it. And the reason is that the U.S. is the world's largest market for Scotch whiskey and growing as a proportion of exports based on the latest SWA data. So it's almost 1/4 of all Scotch whiskey by export value. But particularly if you look at the ultra-premium space, which is where our brands operate, it's as large as all the other markets combined. And important to note is our view that our presence, our own presence in the U.S. is smaller than it should be relative to other markets. So we see an opportunity to double that business over the coming years, even without the need for significant improvement in economic conditions or market conditions in that market. So what we're doing about? We acquired Single Cask Nation in January '24. That's been growing at double digits each year. As I said, 2/3 of that is based in the U.S. In January '25, we took direct employment of the SMWS America team, marketing and operations. In November, we announced the move to the next stage of the improved route to market, and that took effect yesterday. So all has gone to plan, and that's now live as of yesterday, and that should deliver $1 million of cost savings over the next 2 years, so GBP 0.25 million a year as well as some other benefits like aligning revenue and cash with the depletions as we have in all other markets, et cetera. So that has now been delivered and good progress there. The final one is around the core SMWS proposition. And given the kind of changes in market conditions, we thought it prudent to step back and see what are the elements of the business model makes sense, what has changed over time. And some core tenets of the business were reiterated as vital parts of who we are. The Scotch Whiskey Society is a membership model. Only members can buy full-size bottles. But some elements, we became more flexible on. So the absolute value of the membership fee should, of course, reflect what's the proposition and membership benefits in that market. So expecting members in the U.S. to pay the same amount that members in the U.K. who have member rooms bill doesn't make sense. So flexing that membership fee across markets. The second is that we have products like membership and a bottle, which are for sale to nonmembers, but actually, that product can be sold out with our own channels to allow us to get a chance to recruit new members. So it opened up new opportunities for us. Alongside that, we did an extensive piece of market research with prospects and looking at opportunities about how we describe what it is that the society is to people who haven't come across us before. And while at its heart, the society has a real community and membership feel that breeds loyalty, engagement, retention and enjoyment, actually bringing people in with a whiskey-first messaging, that message about VIP access to some of the world's best whiskeys, individually tasted and selected by experts and never to be repeated, really resonate across every market. So we're now using that to build our marketing plans, and that is already coming through. Now when we look at how we market this society, we look at it across 3 key pillars. I'm going to touch on progress across each of these, recruitment, engagement and retention. So first of all, talking about recruitment, as Billy said, 12,000 members recruited around the world. That is with the exception of 2023, pretty close to the record ever recruitment in the society. And given that, that was done with half the budget of 2 years ago, that's a really successful performance. And I want to flag out a couple of reasons as to what actions we've been taking to drive that and why we've been successful. So first of all, talking about the U.K. So here on the right-hand side, you can see that graph of rolling 12 months recruitment. And here, we've had success with new partnerships. For example, partnering with Amex, a partnership which has been built really successfully in Australia and was brought across the U.K. We recruited over 1,000 members using Amex cards during Amex campaign in the summer and then repeated with a few hundred more at the tail end of the year. That's really positive because we're bringing people in who we wouldn't otherwise be able to reach. They're paying for membership still, that it was a positive CPA of the campaign, but also that it's replicable and scalable. So we can repeat that again in the U.K., but also talking to them about opportunities for Germany or the U.S. Alongside that, as I mentioned before, taking that bottling membership product, which is available to nonmembers to bring them into the society for the first time, and that's now available on Amazon. So that was launched at the tail end of November, early December, not, but recruited around 100 people through that channel in the last month of the year. So again, just adding other channels recently added by Gift, other partnerships using the same principles to replicate the scale without the need for upfront marketing spend. So that's how it's coming to life in the U.K. In China, another market that reached record recruitment levels, we've had really good success with campaigns to date, and we're looking to build on them. So we're now using products, product innovation, new product development to drive recruitment. So we've listened to market demand of what resonates in the market. And on the left-hand side, you can see a label for a new product, which is a real Sherry-led, Sherry forward product, which really works in the market. alongside that in the middle, something more speaking to the legacy of the business. Those are coming over the coming months to drive recruitment, specifically supporting targeted recruitment programs. And alongside that, some 35-centiliter products, which have been developed in conjunction with a key influencer in China, and that goes live in June. So those products have not yet been released. They are to layer on top of the already successful recruitment trajectory in China. It is worth noting in China, obviously, that market has been in decline for a few years. It has fallen from a peak of around about GBP 5 million of revenue in 2022 to closer to GBP 2 million last year. And that -- in that context, the overall business performance has been really quite positive. What we're now seeing is a bottoming out in China and return to membership recruitment growth, which is usually a leading indicator of future revenue. Alongside that, then engagement, how do we engage the 40,000 members around the world. So while that number has been relatively flat for the last couple of years, it's up around 50% since IPO. And we engage with them across the 3 core product ranges, the Signature range, single cask, cask strength whiskeys, each individually released each month, almost 1,000 new products a year. Alongside that, the Creators Collection, a new range launched at the tail end of 2024, sets of whiskeys, which have a story and native that binds them together, the Peat Plants collection, all bound together by a joy of peat and whiskey, but celebrating the differences between an [indiscernible] Peat, a Highlands Peat and [indiscernible] Peat for example. And then finally, Heresy, our small batch experimental releases, typically with a fixed strength slightly lower ABV, maybe around 50% as well as typically with a lower price point. And that's really resonated in markets like the U.K. where it's up 30% and China as well. Now on top of that, we've built specific programs and campaigns to drive engagement. We've got a really exciting set of products planned for the whiskey festival season that happens in May. So 41 casks under this theme of the festivals across the regions and then a Heresy blend that brings together whiskeys from across the region. So really excited to see that release next month. Alongside that, other ideas like new product development in relation to World Cup, 35 centiliter product that will be available to members and former members to bring people back into the society. So really excited about that. The other piece from an engagement perspective is a reminder of the importance of the venues to the business. Not only did they represent GBP 4 million worth of revenue, but they represent a really important source of engagement, 100,000 visits to our venues last year. Revenue there was up over 7%, 8%, driven by an increase in the number of bottles being bought by members who visited as well as an increase in the profitability as we focus on cost base and value. But it's also a really important recruitment tool with almost 1,200 new members recruited in venues, which represents over 10% of global recruitment happening in those member rooms. So it's really important for brand awareness and recruitment. Final piece around retention. And while it's fallen from the highs of the kind of middle of COVID when nobody was putting any [indiscernible] on memberships, it remains very high, over 70%. But we think we can drive that retention even further, partly from making sure that, that engagement that people feel the value that they understand why they are a member and wanting to stay with us, but also some specific tactical pieces. For example, we've relaunched auto renewal in the U.K. and EU, which was implemented last year. Now it was implemented in Q2 last year. We've now had 10,000 people move on to auto renewal. But because it takes a year for that to flow through, we haven't had any of the benefit of that yet. And that will come through over the coming weeks. And what we know is when we implemented auto renewal in the U.S., we saw a 10 percentage point increase in retention as it moved from a model where every member has to actively repurchase membership every year to a model where if people don't want to stay, they can leave, but actually makes it much easier for them to remain with us. And then in the U.S., we launched a member rewards program. So that was launched in November last year. It's had a really good impact over 1,400 members, about 20% of all the members in the U.S. earn some kind of status level. And you can see some of the badges you can get once you've tried -- been to your first event, once you've tried a whiskey from each of the flavor profiles regions, et cetera, you can earn badges and then you get rewarded for those using points that you can use towards future spend, et cetera. And that's been well received. As Billy was saying, it has actually driven membership back above 7,000 for the first time in almost 18 months. New membership recruitment in the market is up 25% in Q1, so supporting good performance in the market. So those are the actions that we've been taking. And what they do is they build confidence in our ability to create a credible path to GBP 30 million of sales, double-digit operating profits and cash positive this year and PBT positive thereafter. And as we think about how do we do that, what are the blocks that build us to get there? They're across the core brands, the Scotch Malt Whiskey Society. It's about driving brand awareness. Part of that will come through investment in marketing spend, but part of it comes through those partnerships, those new channels, which we're using to expand our awareness and reach through personalization, implementation of a new CRM tool across U.K. and EU last week, 2 weeks ago, building on the new CRM in the U.S. that was the year before and China the year before that. And really working that along with personalization where people who come to a venue, for example, get an outstanding personalized experience. How do we make that also true for members who engage with us digitally. Alongside that new product development, which we've talked about. From a Single Cask Nation perspective, it's growing at double digits, but there's scope for even more. It's a brilliant brand, great people at the heart of it. 2/3 of the business is in the U.S., but we're only present in less than half of all U.S. states. So there's scope to expand distribution there as well as new international markets where we're present in around 8 to 10 export markets with more to come. And again, product innovation opportunities there. From an Artisan Cask Program was only launched last year. So it's really about establishing and growing that new brand. From an ASC Group perspective, talked about the importance of retail where most people buy most whiskey, and it's something that we have lots of strength in direct-to-consumer. We are under strength on retail reach. We're building that muscle at commercial to over time. And then from a people perspective, driving a whiskey-first culture where we celebrate and deliver success to empower people and then recognize that success. So that gives us confidence in the long-term path to success and why we're still excited about the prospects of the business. So that personalization being a key tool, we're going to see more of that coming through. You will start to see and feel that it's already influenced in U.K. in March and more to come in the coming weeks. And finally, where are we now? How has the year started? So overall, solid start in line with expectations. It is a mixed bag. So definitely a tougher-than-expected start in the EU, but a better-than-planned performance in big markets like the U.S. and China, overall giving us some balance and in line with expectations. And that includes cask sales too with a promising start to the year, delivered well over 1/4 of the budget in Q1 with a significant Artisan cask sales, trade cask sales, noting that we're up against quite chunky comps from last year, but good performance across there. And that optimism across U.S. and China with positive performance in the first couple of months of the year and that completion of the U.S. route to market change yesterday that gives us further cost savings, further direct control leverage in that core market, getting back to growth there. So overall, that concludes the presentation and happy to move into Q&A now.

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

Okay. So I'll pick up on some of the questions coming through. So first of all, a question about profitability. And the question, is there an expectation that the company can actually generate a net profit over the coming years? Question about GBP 30 million, and is that a realistic target over the next 2- to 3-year time frame? And the short answer to that is yes. Of course, the exact makeup of that, the time frame through to that path is dependent on market conditions and how quickly we can deploy and the initiatives that are already in place and how successful they are on. But yes, absolutely, it is. And I think alongside that, what we have is a return to decent almost GBP 2 million of EBITDA target for this year, a target of cash generation this year. So that is our ability to fund all of our own operating cost requirements, all interest servicing costs, all capital, all investments in the growth of business and still have a surplus of cash this year. I think that's a really important metric to be able to deliver. The next question was around cask sales and the GBP 4.7 million generated in '25 split between trade and private casks and did the sales generate a multiple of book value that was broadly consistent with the 2024 independent valuation. So the short answer is, yes, it did. So while we don't have the split between trade and private, it is primarily trade cask sales in that mix, the vast majority of it, I don't have the exact mix, but the vast majority of casks, about 80% to 90% between that. And alongside that, in terms of the multiple, over the last 3 years, we sold GBP 10 million worth of casks at an average of 5x net book value. For context, the independent valuation, which was just over GBP 100 million, represents around 4x net book value. So an answer to the question, yes, it is broadly consistent with the independent valuation. It was slightly higher because of the profile of the casks that were being sold, slightly older, slightly rare ones. If we look at some of the sales done so far year-to-date, it's some younger casks, lesser known distilleries, that's more like 2x NBV, but overall, broadly consistent with that valuation. Next question is about the bottle keep fee at Edinburgh venues and why that has increased and whether or not can be part free as part of the investor benefits program. So for people who are not aware, of our 40,000 members, around 100 of them have access to or pay for access to bottle keeps at the 4 member rooms, which is one of the best people. They can buy a bottle and keep it there on site. It is difficult operationally, particularly things like it has to be served by bar staff, so it's quite problematic to operate as well as making sure that it makes sense for the venues. The venues are not particularly -- they are part of the overall operations of the business and that this is something that we know that small number of members really value. but there simply isn't capacity to expand them, and we know to actually make it make sense. We're going to have to invest in that space and then it is going to go. But the cost is still relatively low. I think it's under GBP 100 a year for the access to this. We did consider making it a part of the shareholder benefits program. But given that most of the members who use it are not part of that program, what we didn't want to do was drive them out of the program. Next question, do you have access to lower-cost SKUs to address the low end of the market while maintaining margins on those SKUs? Are you happy to take a hit on margin on these SKUs to bring in trade? So it's a really good question. I think if we start with the other end, which is what's driving the behavior, it is people still wanting to buy really good quality whiskey that tastes great, have a great experience, but the price point that they want to pay for that has come down. They want it to be really good value. Now what we're not seeing is discounting materially changing. So our absolute levels of discounting in core markets for last year was consistent with the year before. But what we are seeing is that people are choosing to buy an 8-year-old or a 10-year-old product instead of a 12-year-old product or choosing to buy from a less ones, they are choosing to buy something like Heresy. So we are absolutely changing the mix of what's coming through the tasting panel, what's being released to match that demand. So if you look at what is being produced in the first few months of this year, 30% of that product is under GBP 70 price point, which is about double the mix of previous periods. So that is at a lower margin just by virtue of it being all the whiskey is higher margin just by virtue of its structure. But -- so we're happy to take that hit because we're delivering great quality whiskey, still meeting what people want, and that's the reality of the world that we're in. So we are able to meet that demand, but it will have an impact on margin that we're just to launch. One for Billy. When does the CFO expect net debt to peak? Refinancing announcement last September contained a comment that indicated that it peaked at that point. However, issues in the U.S. have had a significant impact. Does the CFO expect Santander RCF to be fully drawn at any point this year?

I think we can see net debt peaked in '25 from a full year perspective. I think the Santander RCF was a great addition last year. It gave us a bit more headroom. It gave us lower cost, and that's important. I think as a business, you go through peaks and troughs throughout the year, and that's how we manage those through delivery of profit and management of costs. So yes, I think we -- as Andrew has said and I have said myself, I expect net debt to drop by the end of this year as we deliver profit, manage investment in spirit and wood and manage our cost base.

Yes. I say the phasing of that might bump around during the year, but overall commitment to reduce. Next question, do you anticipate you'll be in a strong position in future years for purchasing new stocks of Spirits? So first of all, if we think about our overall portfolio mix, we have the casks that we need and in fact, we actually have a net surplus -- surplus of casks, maybe a few thousand casks that are surplus to current demand. Now obviously, part of that is we want to drive demand because we want to be bottom selling it alongside that, looking to realize value out of those casks. To the extent that we can, we will, of course, look at mainly reinvest in the business, look at reducing net debt, all of the things that Billy set out from a capital allocation perspective, but on that treat was cash purchases. Now there are opportunities presenting themselves now to buy great quality whiskey from distilleries, which we haven't been able to buy from for a long time. We are taking advantage of those opportunities, but at a relatively low scale. So we might buy GBP 100,000 worth of stock of and [indiscernible] when we might want that to be 10x, but we realize the realities of the environment which we're in, also looking at opportunities for great whiskey, which we can turn around that ready to go, it's good quality now. We can bottle and sell it out. So we will look to take advantage of genuinely exceptional opportunities to acquire stock, but in the context of the realities of the world in which we're operating. Okay. Next question was around in what ways are we empowering our staff? So the idea here is we have pockets, we have teams, we have individuals where we see great performance where people feel that they have all of the tools, all of the resources, all information, but also all of the accountability and ability to just go and crack on. We see that where we see people who feel genuinely empowered to go and just make decisions that's where we see some really good performance. So what we're talking about is making sure that we get to point where people really feel empowered across all of the business. And that is about giving people the right tools, the right resources, right support, but also giving their managers that support, giving them cover support for the fact that there will be mistakes, and that will be okay. But what we want to do is be nimble, be able to make decisions for people to see and feel things in front and be able to say, yes, I think this is the right thing, and I'm going to get on with it. And then communicating to people about what's happening so that they can reflect those realities. Okay. Next question is, can we have an update on India, please? I think you were just saying that we think the label approvals have now happened. So a bit like in the U.S., each individual product needs government label approval, but rather than in the U.S. with the turnaround time is typically 72 hours, it's been more like 72 days, maybe a bit more. So the first shipment is due to go shortly and that the franchise will launch this year. As a reminder, though, we do not expect the SMWS India franchise, the kind of direct impact to be material on the group performance, tens of thousands of pounds, not bigger. So at this stage, it's about sowing the seed. It's about working with a new partner, testing which provinces were, which hotel partners, what membership model, et cetera. It's testing and learning from those so we can build as the market continues to grow as tariffs continue to come down, but it's not expected to have a direct short-term positive impact. By contrast, I think the overall scotch industry is going to have a really positive impact of the reductions in Indian tariffs because it is soaking up volumes some of the excesses of casks that exists across the industry. So I think overall, India's direction is positive for the industry, but the direct impact for us is relatively low, but it is progressing. It's just a bit slow getting into the market for the first time. What are the plans to get the brand known in the underserved U.S. state? So actually here, because what we're talking about is it going through a traditional 3-tier model, it's working with our importers, which is really good, x beverages to expand our presence into other markets where they are already present. So getting takeup, getting allocations into other states. So we're working with them to support growth into new retailers in new states, but the wider infrastructure is already there. So same brand, working with that importer to expand into other states. Another question about India, which I think we covered. And finally, can you comment on the share price? Of course, we are frustrated about the significant disconnect between current market share price of something like 31.5p, giving a market cap of GBP 25 million and an enterprise value of around GBP 50 million, which we think is significantly below the real value of the business. That's why we're buying shares, options, holding and believe in the long-term success of this business. The question what do we do about it? And our view is twofold. First of all, the #1 thing that will drive the share price performance is business performance, focus on getting the business cash generative this year. focus on driving sales in the areas that we think there's opportunities in the U.S. with the launch of Artisan Casks, with the core SMWS plan, with the expansion of Single Cask Nation into new markets, driving sales. And alongside that, managing the cost base. So you saw the steps that have already been taken. We've still got more to come from full year effect of cost savings already been enacted. So managing that, delivering the business performance. Alongside that, it's our job to then reconnect our perspective on value and the share price. We do that by going and engaging with shareholders. Today's event, a good example of that, speaking to 100 people to try to drive interest, demand, engagement with shares. We've just spent the start of this week in London meeting a range of investors, both current investors who we want to hold and expand their investments as well as new investors who we want to bring into the shares. So it's our job to try to drive interest and investment intent alongside driving the business performance.

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

Yes, of course. I think overall, we have a great business with great fundamentals and outstanding asset backing, really good quality brands with good footprint, distribution across all the key markets and outstanding asset backing and a clear path to how we build towards a profitable cash-generative business. It is taking us longer to get there. We are frustrated that this year's results weren't better. And we be very clear, we are acting hard and fast to make sure we drive sales, manage costs, get that path to profitability. But fundamentally, we have a fantastic business with great outlook and great opportunity to grow and deliver value long term. I hope you join us for that.

That's great. Thank you for updating investors today. Can I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This may take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team, we'd like to thank you for attending today's presentation, and good morning to you all.