ASC holds adjusted EBITDA flat as US tariffs bite and cask sales step up
The Artisanal Spirits Company (AIM: ART) has posted a gritty set of H1 2025 numbers. Revenue slipped 4% to £9.7 million as US shipments were rephased amid tariff uncertainty, but adjusted EBITDA held steady year on year at a £1.0 million loss. Reported EBITDA fell to a £1.5 million loss after £0.5 million of non-recurring US transition costs.
Membership retention stayed robust at 70% and total members edged up 3% to 41,400. Europe was the bright spot thanks to strong cask sales and lively venues, while Asia and the US remained challenging. Management says FY25 EBITDA remains on track with a heavier H2 expected.
Headline numbers investors care about
| Metric | H1 2025 | H1 2024 | Change |
|---|---|---|---|
| Revenue | £9.7m | £10.1m | (4%) |
| Gross profit | £5.7m | £6.4m | (10%) |
| Gross margin | 59% | 63% | (4ppt) |
| EBITDA | (£1.5m) | (£1.0m) | (50%) |
| Adjusted EBITDA | (£1.0m) | (£1.0m) | Flat |
| Loss before tax | (£3.6m) | (£3.1m) | (17%) |
| Net debt | £29.5m | £27.0m | +9% |
| Cask inventory (carrying value) | £28.1m | £26.5m | +11% |
Adjusted EBITDA strips out non-recurring costs; here, £0.5 million tied to taking control of US operations. It’s a cleaner way to assess underlying profitability.
US tariffs forced a pause, but H2 shipments are set to catch up
The big swing factor was America. With new tariffs creating uncertainty, ASC paused shipments and reviewed its route to market (RTM) to optimise costs. That rephasing took roughly £1.0 million of revenue out of H1 and dragged reported EBITDA. Depletions (sales out of distributors/retailers) fell around 30% as US consumer confidence softened.
The fix is now in place. Management expects a heavier weighting of US shipments in H2, broadly restoring FY shipment levels to those of FY24. Membership in the US declined 9%, but ASC plans to reignite growth with a new loyalty programme and the first in-market deliveries of the refreshed Signature range livery.
Europe carries the flag: cask sales surge and venues grow
Europe delivered the goods. Regional revenue rose 21% year on year, powered by a 140% jump in cask sales and steady growth in member rooms and events, where revenue was up 6%. After a strong Q1 for online, H1 finished flat in the UK and down 10% in Europe, but management reports mid-to-high single digit online growth into early Q3.
Membership trends are encouraging: Europe is up 10% to 26.8k with retention nudging 75%, helped by auto-renewal in the UK and a new AMEX partnership that brought in almost 1,000 members over Q2 and Q3.
Asia remains tough, but China shows green shoots
Asia revenue fell around 30% and membership dropped 8% (including the closure of the Hong Kong subsidiary). The macro backdrop is still the headwind here. That said, China membership has grown to over 2,100, and ASC expects a stronger H2 with phasing and new releases aiming to pull full-year sales close to flat.
New revenue levers: Artisan Casks and international franchising
Artisan Casks: high-margin private cask sales
Launched in July, Artisan Casks is ASC’s luxury private cask programme. Only a handful of casks – each at least 20 years old and ready for immediate bottling – will be offered each year, with curated experiences attached. Early sales of £0.2 million in the opening weeks are noted, and the Group expects “significant margin return” from this in H2 alongside further trade cask sales. This matters because high-margin cask activity can offset retail softness and support EBITDA.
Franchises: India and Vietnam added; SCN ships to Brazil
ASC signed new SMWS franchise agreements in India and Vietnam – both top 10 markets for ultra-premium Scotch by value, with India also the largest globally by volume. Initial returns from India are expected to be marginal as labels are registered and presence is built, but the long-term optionality is attractive. Single Cask Nation shipped its first volumes into Brazil too.
Costs, cash and the balance sheet
Cost control is doing its job. Commission fell 60% year on year as ASC reshaped US structures, advertising and promotion spend dropped 29%, and overhead efficiencies continued despite absorbing £0.5 million of new US in-market payroll costs. Finance costs were £1.1 million in the half.
Net debt rose to £29.5 million, mainly due to the H1 EBITDA loss, the £0.5 million US transition cash cost, interest, and working capital timing. Cash at period end was £1.4 million. Facilities include a £21.5 million revolving credit facility secured on inventory and an inventory financing line of up to £15.0 million, both priced at 2.25% over the Bank of England base rate.
Management expects net debt to reduce through H2 as profit improves, though some rephased US cash receipts will fall into FY26. The cask inventory increased to £28.1 million (carrying value), which management highlights as substantial asset backing.
Guidance and what to watch next
The Board cites market consensus for FY25 of £26.0 million revenue and £1.5 million EBITDA (FY24: £23.6 million revenue, £1.1 million EBITDA). Trading early in H2 has been “in line with expectations”, with double-digit UK growth, ongoing venues momentum, and double-digit growth in China in August.
Key watch items for H2
- US shipments: execution of the new RTM post-tariffs and the pace of depletions recovery.
- Cask sales: continued traction in trade casks and the Artisan Casks programme – important for margin.
- Membership health: retention around 70% overall, but management warns that a large UK cohort onboarded in Q4-24 may dilute retention in Q4-25, leaving year-end membership closer to 40,000.
- Asia stabilisation: evidence that China momentum offsets broader regional softness.
- Gross margin: any recovery from 59% as mix improves and pricing investments ease.
My take: disciplined, asset-backed, but still a tariff-and-timing story
There’s plenty to like in how ASC is controlling what it can control. Adjusted EBITDA held in a softer market, costs are being trimmed without hollowing out the brands, and venues are still growing. The big positive swing factor is high-margin cask sales – both trade and the newly launched Artisan Casks – which can materially help H2 profitability.
On the flip side, the model is still sensitive to the US. Tariffs and consumer sentiment knocked both shipments and depletions in H1, and net debt ticked up while cash receipts were pushed to the right. Delivery of the US catch-up is therefore crucial. Asia remains a headwind, albeit with better signs in China.
Overall, management’s confidence in meeting FY25 EBITDA expectations looks reasonable if the H2 execution lands: more US shipments, steady European performance, and meaningful cask margin. In short, ASC is using its deep stock position to diversify revenue and defend profit – exactly what you want to see in a choppy market.
Regional footprint and membership snapshot
- Total members: 41.4k (+3% vs H1-24), retention 70%.
- Europe members: 26.8k (+10%); Asia: 5.1k (-8%); Americas: 7.7k (-9%); Rest of World: 1.8k (-5%).
- Europe revenue H1-25: £6.8m; Asia: £1.5m; Americas: £1.0m; Other: £0.4m.
- LTM KPIs: revenue per member £425; contribution per member £238; LTV £796; retention 70%.
Investor diary
Management will host an investor presentation on Thursday, 11 September 2025 at 14:00 BST. You can register here: Investor Meet Company.
