MIDAS SHARE TIPS UPDATE: That’s the spirit! Whisky is up

More than 120 companies decided to go public in 2021, with nearly 70 entering the junior AIM market alone. Many have struggled since then, missing forecasts, disappointing investors and seeing their stocks plummet in response.

Craft Spirits Company is different. The luxury whiskey group went public in June 2021 and has since successively met or exceeded expectations.

The shares are at 92.5 pence, so they’re up more than 11 percent since Midas recommended them in August 2021. But they’re still below the £1.12 they hovered at two months earlier. That seems unfair and the shares should rise as the company continues to prove its worth.

Artisanal Spirits is the company behind the Scotch Malt Whiskey Society, a club for whiskey enthusiasts. The society celebrates its 40th anniversary this year and is proud to make limited edition whiskeys that are sold exclusively to members. Each whiskey comes from a single cask, with only 250 bottles per cask, making each one slightly different. Last year alone, Artisanal Spirits created some 1,000 new whiskies, some mature, some young, some peated, some smooth, but all designed to appeal to the discerning drinker.

The concept seems to work a treat. The number of members grew by 12 percent to 37,400 in 2022 and has risen again this year. Just under half are from the UK. But first-class Scotch is valued around the world, with more than 20 percent members in Japan and Australia and nearly 30 percent in continental Europe.

For £85 a year, members get exclusive online access to the Society’s whiskeys, which range in taste, age and price.

Carefully curated whiskey doesn’t come cheap – starting at around £45 and going up to £2,500 for extremely luxurious varieties. But members are willing to pay. Nearly 250,000 bottles were bought in 2022, with Chinese drinkers alone splashing up to ten bottles apiece.

Growing membership and growing spending helped Artisanal Spirits grow revenues by 19 per cent to £21.8 million in 2022, with CEO Andrew Dane expressing confidence for this year and beyond.

The company made a small loss last year when it invested in fresh casks of whiskey and a brand new factory where Scotch can be aged, bottled and distributed.

While Dane works with over 100 independent distilleries, bringing some of the storage and bottling in-house will benefit margins and Artisanal Spirits is expected to turn a profit this year and grow at a rapid pace thereafter.

With over 16,500 barrels and enough whiskey to meet demand for the next five years, the group’s assets are also highly valued, valued at nearly £500 million and inflation rates rising every year.

Shareholders will also be offered reduced membership in the Scotch Malt Whiskey Society and a single exclusive bottle.

Midas verdict: Money is tight, but whiskey has a certain allure and the Artisanal Spirits Company helps enthusiasts satisfy their passion. At 92.5p, the shares are a strong hold for existing shareholders and a bargain for new ones as well.

Traded on: GOAL ticker: ART Contact: artisanal-spirits.com or via Instinctif Partners on 020 7457 2020