Aussie distilleries post top-shelf results

It was a good day for two Australian distilleries on Thursday after Top Shelf International and Lark Distilling both released their June quarter updates.

Top Shelf International

Premium spirits company, Top Shelf International surged 15% after it provided an overview of its Maturing Spirit Inventory and Net Sales Value along with a forecast for FY22.

At 30 June 2021, TSI had maturing spirits consisting of Whisky & Agave, with a Net Sales Value of $272 million, an increase of 521% year-on-year and 154% above Prospectus. Total spirit inventory increased to 3.5 million litres in FY21, an increase of 410% on 30 June 2020.

While in the second half of FY21, TSI achieved an Average Net Sales Value per litre for NED Whisky of $71.40, an increase of 23% on the first half. TSI engaged PwC to perform certain procedures on the calculations and methodology to derive the 30 June 2021 whisky Net Sales Value per litre calculation.

Looking ahead, TSI expects that the Net Sales Value of maturing spirits will increase to $418 million, while inventories will increase to 6.6 million litres of mature spirits available for sale within the next five years, with a Net Sales Value of $500 million.

TSI noted that its Net Sales Value over a five year period is an important metric as it provides an indication of timeframes in which inventory can be expected to be available for sale.

Lark Distilling

Lark Distilling added 10% after also posting a positive quarterly, in which Net Sales reach $4 million, up 244% compared to same period last year. The company closed out the financial year with 1.1 million litres Under Maturation.

Its Net Sales Revenue per Litre rate was restated from $139 to $216, influenced by channel diversification & product initiatives realised in FY21, bringing the total Net Sales Value of the Whisky Bank at Maturation to $239 million.

During the quarter, $3.6 million was invested in building its whisky bank through in-house production & outsource partnerships including the purchase of 30,000 of maturing whisky to address a previously identified inventory shortfall in F23/F24.

Lark is projecting over the course of the next 12 months to be cashflow neutral, where internally generated cashflows will support the continued building of its Whisky Bank.

It is also currently negotiating debt facilities with a number of the big four banks, which aims to provide more flexibility to participate in investment buy opportunities for future purchases of raw materials & dry goods to deliver incremental margin improvements.