Artisanal Spirits (LSE:ART) — Investor Presentation

0:00 Good morning, and welcome to the ARTISANAL SPIRITS COMPANY PLC Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the Q and A tab situated in the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself, but the company will review all the questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll. And I'd now like to hand you over to Andrew Dane, CEO. Good morning to you, sir. Good morning. Thanks very much all for joining. So I'm Andrew Dane. I'm the chief executive of ARTISANAL SPIRITS COMPANY. I'm joined here by Billy McArthur, CFO. So I look forward to talking about ARTISANAL SPIRITS COMPANY, which creates and sells outstanding limited edition whiskies around the world, and we're here to talk about performance in the first six months of the year.

0:54 Now we predominantly do that through the Scottish Malt Whiskey Society, which is a global direct to consumer premium business selling outstanding limited edition whiskey primarily online and exclusively to worldwide membership. And how do we do that? Well, we're not a distillery. So we procure from a wide range of distilleries, having no bottle from over a 150 different distilleries to date. We mature those, owning 17,000 casks today, creating almost a thousand new products last year alone. We bought all those under our own brand, and we sell them, as I say, exclusively to members, but we're about more than just a bottle shop for wonderful whiskeys. We're about the events, the experiences that go with them.

1:41 And we have four wonderful member rooms, one of which I'm in here today in Queen Street in Edinburgh, as well as the spiritual home of the society in the vaults in Leith, which we'll talk about later on, one in Glasgow and one in London. So we think about what's happened in the business. It all sits around our strategic framework. At heart, our purpose is to captivate a global community of whiskey adventures, people who are on a flavored journey. We do that by revealing, really, the magic of our unique and outstanding whiskey system. Our ambition is to create high quality, highly profitable, and cash generative premium global spirits business, And we're on track for our short term ambition of doubling sales by next year, and we do that by delivering the world's best whiskey experiences.

2:32 Now when we look at what we've done in the first six months, there's both been strategic progress and financial and operational progress. So I'm gonna talk a little bit about strategic progress first and then hand it across to Billy to talk around that financial and operational performance too. From a strategic performance perspective, what we've been working on fits under our strategic pillars around membership proposition, experience, liquid, reach, and people. And we set ourselves a number of ambitious targets for this year. And during the course of the presentation, we'll talk about a few of those at various points. I just wanted to show you how they fit. And, really, that includes things like, the expansion in Asia with the launch of a new franchise in Korea in April and the addition of the Taiwan subsidiary in August, the launch of a new membership in a bottle product, which we'll talk about, which will be on sale in The UK ahead of Christmas time, the refurbishment of those wonderful venue at at the Vault as well as the launch of an app and website, Moving all of our supply chain operations into our new facility at Masterton Bond, which started operations last year with cask warehousing, bottling, and then the final part of operations, order fulfillment moved across in May of this year. So that's now fully operational.

3:52 As well as delivery on key strategic objectives like cask sales, which we'll spend quite a lot of time today talking about.

4:00 And alongside that, still looking at long term opportunities for the business with our first shipment into The US for g g Thompson arriving ahead of sales over the second half of the year and continued development around opportunities in in America. And underpinning all of that, there are people with some big changes with appointment of Billy as CFO, Chris Leggett joining as business development director, and promotion of Rebecca Hamilton to marketing experience director, bringing all of the elements of experience with physical and digital all into one place. So let's say we've come back to those details, but just wanted to set some of that strategic context. But I'm gonna hand across to Billy to talk a little bit about financial operational delivery. Thank you, Andrew. Morning, everyone. The screen currently, you can see our key KPIs for the business and splits into three columns.

4:50 It's a growth membership cash for it. We performed well in the first half. We've grown revenue three over 3%. And one of the key points around that is following a relatively flat q one. We delivered 7% delivered in q two to reach up to 3%. And that flat q one was really driven by the headwinds within China. That was predominantly having come out of much longer and a significant lockdown. There were more cases of actual COVID in the country. So we're pleased with the momentum we've gained in half two, and as a result, we therefore remain on track to deliver the balance of year in half two, which is much more weighted in the second half for the full year. And as a result of that performance, we stay with a really positive £6,200,000 gross profit on that 10,200,000 per revenue.

5:42 The core of our business, what makes us successful are our members. Our membership is up 9% on the same half in the prior year. It's fantastic. It's almost 13,000, and the of speaking, we are over 13,000, which is fantastic. We still have a really strong top level retention. So as a reminder, that's above pre COVID levels. It's slightly down last year, but seventy four percent is still very strong and above that pre COVID level of around sixty and seventy percent. And our lifetime value, as a as a KPI within the business, we like to maintain a directional view of, we're still very strong. It's still up 35% since IPO for a little down due to that first half and flat performance particularly in q one.

6:27 And as a reminder, as a business, we have a strong balance sheet, heavily driven by the investment we've been in Casper. For a minute, in top to bottom, on the right hand side, we have a net book value of cash for it at £24,000,000. That's what we paid for the spirit that sits on our books, and quite rightly, have to hold it on our books at that. Every year, we do an annual review, an annual valuation via RVS as part of revolving credit facility with an external party. They value those casts at £38,000,000. So the minimum, the value of those casts are £13,000,000, but they're recognized in our books at £24,000,000. That's up around £10,000,000 year on year. And as a as a guide, we'll show retail value if we take every liter of spirit out of those casks, bottle and sell as part of our business model. We're still looking around $0.5500000000 pound of revenue delivered from that. So that's really fantastic strength behind our business.

7:26 And as I go on to talk a little bit more about revenue, the key thing here is our growing and diversified global revenue. More diversified this year for a couple of reasons. We've we've done more with cash sales, and Andrew will talk a bit more about that

7:39 shortly. It's just objective. We've delivered 500,000 in a year, and that really helped set offset some of that slow start in China as we deliver year on year growth. We were not overly exposed in one market, which is a really good place to be. What I'd also like to call it in revenue is some fantastic performance within our UK venues, strongest six month performance on record, and in Europe, over 20% growth also. In line with our strategy, we're always gonna continue to enhance the value of our cash stock and take advantage. So back to the first point, Andrew will talk bit more about that. But as a business, we have some key strategic opportunities around those cash sales, which we'll definitely look to deliver in the second half as well as we achieve our full year ambition.

8:25 So moving on to our profit position. As you can see, the 10.2 flows through. We have made an adjusted EBITDA loss of 1,800,000 in the first half. That's very much driven by the balance of delivery of that revenue growth in the financial year. For example, China did have a slow start, but it's also has comparison of against last year, it was 60% up in the prior year. So that was a really strong first half last year, a slower start to q one this year, but delivery in h two in China will help us maintain our ambition of achieving consensus levels around £25,000,000 of revenue and adjusted and I'm sorry, an EBITDA of £1,000,000. In terms of the rest of the p and l, you can see that our marketing cost piece is a little higher in the first half. That's purely balanced of revenue delivery against that marketing spend.

9:14 That's been more challenging for us, so we put more into it. It's it's evident and clear that our delivery in the second half is much more delivered in October, November, December periods and the opportunity around cash sales. Within payroll and other overheads, there's no specific risk in there. What I'd call out is inflationary environment of increases as an as an average. We gave 78% pay increase last year. And other than that, Masserton Bond. Masserton Bond last half year was phasing up. We weren't fully manned, but in the second half was fully manned. So therefore, that comparison will kinda dip back a bit in the second half. In terms of overheads, that's the continued investment and what we call a technology roadmap as we look to deliver, for example, on that by the end of the calendar year. So those are the key investments we've made.

10:02 In terms of our balance sheet and cash flow, I mentioned at the start the power of our balance sheet in terms of our cash split. We have a net asset value of £18,700,000 driven by that £24,000,000 of cash split, which I've said before is the minimum level we would expect year on year in the bank valuation going up £10,000,000. We're in a strong position there. I think it's also key to point out that from a cash flow perspective, we are our investment in cash spirit is peaking. As a business, since IPO, we've invested strongly in our CASSPIRIT, and the numbers we've mentioned justify that investment. But now as we get to a stage where we've got all the spirit we need until around 2029 and around 75% way into the beginning of the next decade, we will start simply replenish what we have. That cash for investment has peaked, will slow off as we start to drive profit and drive cash generation, replenishing that cash for it level. Most notably, leaving our net debt roughly where it is around the 20,000,000 per mark in the near to medium term, and then paying that off as we see our EBITDA delivery further increasing.

11:11 But the key thing for us is the operating cash flow is heavily is essentially the impact of the first half EBITDA. But in the second half, where we fully expect to deliver the full year performance, that cash flow should become margin positive the full year, which is completely in line with our strategic plan. Thanks so much, Billy. Can we talk about the the strengths of the business? First, just to your pioneering model, the long term global growth opportunity, and a robust business trying to deliver. What I'll do is I'll bring that to life a little bit and talk about the pioneering model of the Scottish Water Whiskey Society. And within that, its heart is this loyal, valuable, and growing global membership. As Billy said, it's now above 39,000, kind of proving that the underlying core proposition continues to resonate, continues to gather momentum.

12:01 And when we look at lifetime value, it is slightly down year on year, primarily reflecting that marginal drop in retention. But it is worth noting that this is not a directional KPI. This is not about that number needs to be driven up over time. It reflects the fact that it's combination of loyal engaged members combining with the high margin model means that there's a significant profitability associated with with every member, and that reflects the fact that we continue to be engaged in the proposition that we're delivering. And as Billy said, that's 35% higher than it was at the time of the IPO just a few years ago. And one of the reasons that the proposition continues to land is that we truly deliver a hybrid model with both digital and physical interaction.

12:49 Now how that comes to life varies by key market. But I'm gonna talk about four biggest regions for us and explain how that really comes to play. First of all, in The UK, most obviously, the four member rooms that I referred to. Queen Street here, the image there is a artist rendition of what the refurbishment will look like. It's going to be open next week, and I would strongly encourage everyone to to come and see it. We were seeing the bar being installed yesterday. It looks absolutely wonderful, and I think it's gonna be a great a great home for the society well into the future. And we've learned the lessons and listened to members about the things they really love about coming to member coming to the members' rooms. For example, being able to talk to really highly knowledgeable teams, so much bigger bar area, easier interaction.

13:36 But also things like the seating arrangements so that you can sit with your friends and the friends that you haven't met yet. So it's gonna be a great, a great relaunch next weekend. Alongside that that physical experience in The UK, we're also launching an app in The UK in the coming weeks. And that will allow us to deliver better engagement online because we know that most members in The UK already spent primarily the primarily engaged in the website through their mobile, so making that journey easier, and then adding additional functionality in due course. Similarly, in The US, it's another key market for us, membership has grown strongly there. 15% growth in membership. And, again, it's about that combination of physical and digital experience from a physical perspective, being a couple of the great partner bars that we have there since we can't own our own venues in The US.

14:31 Jack Rose in Washington, Brandy Library in in New York, seeing the society come to life with existing members, but also as a recruitment tool for new members. And in parallel, we recently relaunched The US website, making that new member journey much easier, guiding people into the society, and making sure they get liquid to lips as soon as possible. In Europe, we have a network of 66 partner bars that really bring the society to life across Europe. And those together with increased footfall, increased presence at festivals means that Europe is our fastest growth membership region this year with with new member recruitment up by 30% year on year on year. So really delighted with the way that that is going.

15:16 Finally, in China, it's the same picture. And after a a flat start to the year, it's been nice to see momentum improving. And in fact, August was our growing highest ever months of recruitment in in China with about three quarters of that coming from the Whiskey L Festival, which is the biggest whiskey

15:34 festival in China, about 30,000 consumers attended the Whiskey L Festival over a four day period. A few thousand of them came to the Scottish Water Whiskey Society span, and we recruited about a 120 people during that four day period, helping to drive up membership in the second half of the year. But, again, we supported that with a digital element, with a campaign on TikTok, a short, easily consumable knowledge videos about what is whiskey, how is it made, that deliver through the society lens, and using that as an education tool, but also a recruitment tool. Recruiting 20 something members in that month, which might not sound like a big

16:13 number, but remembering that lifetime value of a of a member in China is around about £3,000. So that's £60,000 of member lifetime value delivered through one channel in one market, one platform in one month. So that shows how both the physical and digital really come to life in society.

16:34 We talked a lot about bringing more people into society and recruiting them. This, I'm pleased to say, will be launching in just the coming weeks as well, a new membership and a bottle product to launch in time for Christmas. And that means that when new members are joining, they get real wow experience and welcome to the site, but also making it easier for them for them to understand how the whole process, including really important, the hero of the liquid in there combining with the community feel. We've also been working a lot in the first half of the year on other ways to bring to life the the the wonderful liquid that we have and taking advantage of the fact that the society turns 40 this year to release a wonderful 40 year old product. I've had the pleasure of tasting it. I can see it's absolutely sensational. And that will be released for sale in October, The UK price of roundabout £3,000, exact price feeding by market.

17:30 And as Billy referred to earlier, the kind of balance of profitability in the year, if you look at all of those initiatives, all of the spend and investment has been in the first half of the year as planned, but the delivery and the upside starts to come through in the second half, giving us even more confidence in the second half of the year's delivery. And all of those strategic projects fit within this context of a significant and growing addressable market worldwide over $8,000,000,000. Scott Frisco was sold in the ultra premium price points in which we play. And pleasingly, 80% of that was in the markets that we already have a presence in. I mean, our addressable market's over $6,000,000,000, and we represent a tiny fraction of that.

18:17 And that market is growing, continuing to be driven by the premiumization trend as people drive towards authenticity, status, knowledge, experiences, prominence, all of the things that lend itself well to what the society has been doing brilliantly for forty years. Finally, we are really a robust business and really well positioned to take advantage. Now one of the topics I wanna spend a little bit of time on is talking about tasks. We talked a lot at the time of the IPO about how we were gonna go and invest. And it's worth reminding ourselves that we raised £15,000,000 of primary proceeds two years ago, and that 80% of that has been invested into assets.

19:04 Liquid, cast wood, masterton bond. We've invested in those assets using that instead of paying them debt because it drives long term value. I wanna pick two subsets of that SPIRIT investment here to talk about. First of all, right about £3,000,000 spent on, old, weird, faders, and opportunities, really delight consumers, members around the world. Small number of casks, but an opportunity to to turn that into liquids, put it in a glass, put it in the bottle in front of somebody very quickly. And that generates very significant returns, as you can see, from the sales that we've already made, selling those for a multiple of the bank valuation.

19:53 But also driving long term value because some of those are going into bottles. Now it's wonderful 30 year old product, but some of those are gonna be the society's future 40 year olds in due course. What we've also been doing is long term value generation, investing in young and new mixed spirit. £3,500,000 invested post IPO, roughly three and a half thousand casts, That delivered long term value. You can see the value of that has gone up by 26% in just the the months and and year or two since the IPO. So that is delivering, but we have to be patient to wait for that to come through into our balance sheet and p and l. But as Billy referenced, the bank's valuation has gone up by 10,000,000 this year.

20:41 That's £10,000,000 of value, which is accrued to the company but isn't in a balance sheet or p and l anywhere because we have to patiently wait for that to come through. And we always knew that CASK sales was an opportunity we wanted to to, pursue, but we wanted to think about how best to approach that. We've always had opportunities. People approach us all the time asking us to buy casks, but we needed to find a way to deliver it, which was true to the society and our business for this company and what we wanted to do. We don't want to go near anything that feels like a cask investment scheme, speculative cask investments. Instead, we want to be selling to people who really want the whiskey, and we make good progress in a few bits there. Building on a history of always selling casks into into the industry to to trusted industry partner, which is something we've always done, continue to do. Obviously, that grows as the business grows as the number of cask goes. Billy talked about the opportunities to rebalance our our stock, and sometimes that's selling something here to buy over there. Sometimes it's an explicit swap, something we've always done and continues to grow. And then layering on top of that private cask sales as we go.

21:58 Now here, it's important to know what we are selling is a whole cask's worth of bottles. So this isn't about selling the cask that someone can then sell on. We are selling bottles. And we've had good progress in the the months that this program has been live. Some some really good sales to individual, primarily in Southeast Asia, but across across the way of the piece. And this is an opportunity to people to get a really personalized experience with some wonderful liquid. And we're in the really fortunate position of having invested in our SPIRITS DOT that we get to do this as well as releasing equivalent products to our

22:36 members so nobody misses out. And then while these bottles are these casks are tens of thousands or hundreds of thousands of pounds per cask, we're also looking at ways that we let's talk about in the coming weeks of making that available to a much broader membership base, have private cast sales program with a cast in the thousands of pounds. I look forward to telling people more about that in the coming weeks. So when we talk about cast sales, hopefully, that helps bring it to life. Finally, have people who really deliver. And as I said, significant changes to the executive team here and wider business and continue to build on the culture, continuing to deliver from a really passionate engaged team who who love whiskey, love what we're doing, and love spending time with our our members. And that's what makes the business sustainable as we look into the future.

23:28 So we think what does that mean for where we are now and what to expect in the future? We remain on track now to deliver our ambitions to double sales by next year and our path to profitability, including inaugural positive EBITDA this year. Now what's happened post period end? Continued growth in membership, underpinning the quality of the proposition. It's now above 39,000. Launch of that newly established subsidiary in Taiwan, one of the world's biggest ultra premium Scottish whiskey markets and a great opportunity for us. And therefore, as we look ahead to what we expect in the balance of the year, real acceleration in revenue growth with the positive impact of our Taiwan and Korea launches, improved momentum and weaker comparatives in China, timings of shipments as we deliver this year to support next year's growth, and further progress on those cask sales that I've just talked about.

24:26 And that will support what has already been a wonderful start to the year in places like UK venues, even better with the launch of that brilliant refurbishment of the vaults as well as continued performance in in Europe and supported by the delivery of those strategic objectives. The new app, the new membership in a bottle, new prestige product, as well as some other treats that we have to reveal to members over the coming over the coming weeks. That gives us confidence in our ability to deliver significant growth in the second half of the year, deliver to consensus targets including that in overall positive EBITDA. Longer term, mean, it would be too good to ignore those wider macroeconomic conditions we see, but our increasingly globally diversified footprint as well as our diversified business model, the growing membership, pioneering model, high margins combined with the demographics of our loyal and engaged membership, together with that continued premiumization trend positions us well to continue to grow and deliver on that ambition and clear path to profitability in the long term.

25:44 So that brings us to the end of formal part of the presentation. I'll now hand back, and we can go through some of the questions. Perfect. Andrew, Billy, thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab, which is situated on the top right hand corner of your screen. But just while the company take a few moments to review those questions submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides and the published Q and A can be accessed via investor dashboard. Andrew Billy, as you see, received a number of questions throughout today's presentation. If I could just ask you to read out those questions and give responses where it is appropriate to do so, I'll pick up from you at the end. Yep. No problem at all. The first one is question is, does the vaults and lease venue turn a profit? How does each income avenue such as events, bottle sales, and bar sales contribute to the overall figure? So I'll hand it to us to Billy to to talk about that. Thank you, Andrew. Firstly, yes.

26:35 The vaults and all of venues do make a profit. And the investment in the refurbishment that of the vaults, which opens next weekend, will hopefully extend that opportunity as we welcome more and more members into the updated and refurbished SPIRITS OF HOME. In terms of the split, what you'll find is 60% of the income comes from hosted sales, And then the remainder is really split split over memberships, food, tasting tickets, and items like that. What I would say is it's worth remembering a membership that is a lower value. We only recognize the membership from a venue on the initial purchase. So any retention, any renewal doesn't as such sit within the venue because it's a business. It's our system currently can't compete with that, but that that's just a decision that we we've currently taken.

27:27 But in short, yes, our venues make a profit. They do very well, and we expect that to continue. And as you've seen in the presentation, they've had a great six months. They had a fantastic last six months to twelve months last year as well. So the rebound from COVID has been fantastic, and it goes from strength to strength. Yeah. Hope that helps. Okay. So next question is about seemingly high level of senior executive turnover in the last year, and then a question about options. So let me talk to that. So I joined the business three years ago as as finance director and was promoted to chief exec in January. David having left, having been here for six years and delivered substantial growth in the business, including delivering all the targets post post IPO.

28:12 And, obviously, one of the things I wanted to make sure is that we have the right team around us to deliver for the next stage of growth of the business. I'm delighted with those changes with the, I'd say, the addition of Billy McArthur here as CFO, promotion of Rebecca Hamilton to marketing experience. She's been here for us a number of years. And then real quality additions like Chris Leggett, who joined us as former chief exec of Douglas Aland, joining us as business development director, supporting some of the more established members of the team like Kai Ivelo, who's our SPIRITS director, been with the business for twenty years and is a key part of the current, historical, and future success of the business. There's then a specific follow-up question you asked about outstanding options.

28:57 Did they disproportionately belong to former employees? Certainly, there are a number with former employees. Obviously, as you would expect, the growing business options have been part of that, but there is a balance between, legacy employees as well as an ongoing program of share option awards to existing staff so they get to be part of delivering and being rewarded for the future success of the business too. So that helps. Next question was around, with a growing interest in whiskey and a growing volume of new mixed spirit, could there be implications for whiskey pricing in the medium term? How do you quantify and navigate this issue, including perhaps a question about whether or not there's been too much being laid down. So, yeah, there's certainly continued growing interest in whiskey, but particularly in the premiumization space. So whiskey is being driven by value more than it is being driven by volume.

29:54 And certainly, the growing volume of new distilleries, people taking a new approach to whiskey is great for the society. Our members, crave variety, and it's wonderful to be able to bring them new releases from new distilleries, only the ones that we think are are really, really great delivering and wonderful liquid. But our members love that. So that variety gives us lots of opportunities and potential and and lays itself well to us. Overall, it's always hard to tell where the direction is going from a volume perspective, but certainly, with positive news around expected direction of travel with regards to India and tariffs there, I think there is a potentially huge additional demand coming even if the tariffs only move from a 150% to a 100%, which seems to be the thinking that could have a material impact on on the volume of okay.

30:45 What it does mean is in the short term, because we have good stock coverage, we can choose where to invest. And what you saw in in when I talked about where we're making a task investment is we sort of spread into the two ends of the space, taking advantage of wonderful fairy dust opportunities to buy old and rare cask from outstanding distilleries and release those wonderful liquids relatively quickly, but also the other end of the the scale, working with a wide range of, distillates, huge range of those to buy new making young spirit that we can grow and develop and deliver over time. Hope that helps. Next question is the reason for the change in model from a franchise to a joint venture in Taiwan.

31:31 So, here is maybe useful just pausing and talking about the structure of the business. We use franchises across the world in about we've got about 12 franchises for a variety of reasons, but most importantly, they're a good way to seed new markets. Low cost, low risk way to enter new markets. And quite often, the way we will do that is we will work with the partner bar owner, in a successful market. For example, partner bar owners in South Africa and Mexico recently took on the franchises in those two markets and and helped to grow them. By contrast, in Korea, we actually went through a beauty parade, identified a wonderful partner there, FJ Korea, who's done a great job, 300 members in ninety minutes in the in the Korea market. So franchise is a way of seeding new markets. So that's why we'd initially had a franchise in Taiwan.

32:24 However, we all we recognize an opportunity to change because the route to market in Taiwan was different to every other market. Taiwan has quite strict laws around d to c alcohol ecommerce, I. E. That you can't do it because of age verification requirements. So historically, we've had it's the only market in the world where we didn't operate a full membership model. Bottles being available for sale in high end specialist whiskey retailers and bars, and that had never quite felt right, but it was an easy way in the market back in the past. Instead, we've changed the route to market in Taiwan with what we're calling ecommerce light, where members will get an email about new releases, be able to go to the website and browse the product. But instead of clicking buy now, they click express my interest. That allows the process to then go through the fully legally compliant age verification process, and the person can collect their product. So we took the chance with the change in that route to market to also bring that in to being a joint venture or a subsidiary, really, to take more control and take more of that opportunity ourselves.

33:33 The next question is, are you finding it easy to pass on inflation and CASK investment cost to clients? It's a good question, but it's not actually the way we think about it. We have this enormous inflation hedge because we already own all of the SPIRITS that we're gonna sell for the next five or six years and most of what we're gonna sell for the next decade. So while there have been some price increase, particularly the the old and rare reflecting market conditions as well as some of the pricing in that space, it means we haven't moved pricing at all at the bottom end of the range. So an entry level product, there was no price change last year because we wanted to make sure it's still accessible at the at the bottom end. Next question is, what is the annual subscription rate for members joining SMS, and what trends trends are you seeing in terms of year on year growth?

34:30 So in The UK, the annual subscription rate is £85. In The US, it's $99. It's an equivalent rate in in all in all markets. What I would say, though, is that most members join together with a bottle, and that new membership in a bottle pack I just showed you is a 129, and that includes the bottle. Just a great margin, but it allows someone to get a bottle in hand. And that's actually something we'd like to see more and more of is making sure that people get liquid to lips and really get to understand and experience the joy of a society whiskey as early as possible because we know it drives engagement, retention, and enjoyment of being a member. In terms of year on year growth, as Billy referenced, up 9% year on year with broadly, consistent growth between the second half of last year, first half of this year, and we've continued to see growth into the second half of twenty twenty three.

35:28 Next question is when will the app be ready for use by customers, and what kind of features can one expect? So the app will be launched this year in The UK first initially only. Initially, it will be web shop functionality only. So it will have few of the little bits, but primarily, it will be a web shop functionality. We other developments in due course, but also where we are looking at different things like the ability for people to create private ratings for their own whiskey. I'd like to see that being both in the app and the web to make sure that everyone gets to to use the functions that that people are looking to to have. So this year, we'll launch the app primarily, but shop functionality with additional functionality built in due course thereafter. The next question is the share price has not been mentioned and has not performed well. What does the company and what do analysts predict the share price going forward?

36:25 So the first thing is that our primary role in the share price is to make sure we're delivering on results. We set out an ambitious path to double sales by 2024, and we're on track to do that. And we've invested in the people, platform, systems for a business of that size, and we're on track to deliver that. It's fair to say that the share break hasn't performed well. But I would say if you look at it relative to, other IPOs of the year, the aim of all share index since the time of IPO, you can see that our shares are broadly tracking in line with those. Certainly, we want it to be better, and I think given that we have continued to deliver, we are one of two only two companies since 2020 in the 2021 IPO cohort who hasn't had a downgrade in their forecast.

37:14 But some of those companies have subsequently really struggled. So, certainly, share price is something I'd like to see improved, but the bit we are focused on is deliver on what we said we were going to do, strategic progress, financial and operational performance to make sure we've got the right long term growth opportunity, but getting to profitability, cash generation as we promised. Perfect. Andrew, Billy, thank you very much. I think you actually covered off all those questions from investors. And of course, the company will review all the questions submitted today and will publish those responses on the Investor Meet company platform. But just before redirecting investors to provide you with their feedback, which is particularly important to you both, Andrew, could I just ask you for a few closing comments? Yeah. Thanks, Rod. And and thanks. It's really important to us to get the chance to, to present, but also to hear the questions and the things that people are interested in.

38:06 So thanks very much. Thanks for engagement. And as I say, leave you with the feeling that we really are in a position where we've invested in the people and platform systems. We've invested in strategic priority areas. We're very close to delivering a good number. We've already delivered some of those earlier this year, and therefore, we're starting to reap the benefits of all the hard work of all of the team here, all of the investment we've made, and that leaves us here feeling confident in delivering on what we said we would do, full year results, inaugural EBITDA, and continued growth thereafter. Thanks very much. Andrew, Billy, thank you once again for updating investors today. Could I please ask investors not to close the session as you now be automatically redirected to provide your feedback in order that management team can better understand your views and expectations.

38:54 This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of the ARTISANAL SPIRITS COMPANY PLC, we'd like to thank you for attending today's presentation, and good morning to you all.