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LRK - LARK DISTILLING CO. LTD


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Lark Distilling Co. Ltd (LRK), formerly Australian Whiskey Holdings Ltd, is involved in the further development of previously identified investment opportunities in the Australian craft distilling industry and management of current equity investments in this industry, including the operations of the Lark, Nant, Overeem and Forty Spotted Gin Distilleries.

 

 

Based in Tasmania, the then Australian Whisky Holdings Limited (AWY) listed on the ASX late 2015 and in Sept 2018 raised a further $8million in an oversubscribed private placement.

 

New management; and in March 2020, a consolidation (inc. loss of previous performance rights and options) saw 1.6B shares reduce to 55million.

 

In May 2020 changed its name and ASX code to Lark Distilling Co. Limited (LRK) and another $9million came from institutions in Sept 2020; the proceeds raised under the Placement will be used to fund the inventory build of Lark's whisky with the aim to have 1.5m Litres under maturation by the end of FY22.

 

The company is very proud of its Tasmanian provenance and seeks to position as a premium product

... at Lark Distilling Co. our brands have a fingerprint and a personality. They are the embodiment and reflection of the people who craft, sell and contribute to them every day. Each one of our bottles is created by the most experienced whisky creation team in Tasmania.

Our core range Lark products (Classic Cask and Cask Strength) are always distilled at our Coal Valley Distillery. As we evolve our packaging later this year, we will prominently showcase this fact on the relevant product label. Secondly, any limited release products going forward will say which distillery they come from, so Coal Valley Distillery or Bothwell Distillery (or any other distillery for that matter) will be on the label.

 

Our Nant brand is traditional. We use it to showcase Bothwell whisky in port, sherry, white oak and Bourbon casks. Each one is selected for its commitment to style and quality. Each bottle of Nant comes from Lark Distilling Co.'s Bothwell Distillery in the Central Highlands of Tasmania and is signed off by our cross company tasting panel.

 

There is also a Gin label, and recently Lark sold the Overeem name back to the Overeem family,

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the 2021 Federal Budget has a specific incentive of tax cuts targeting craft spirits and beer production that will help Australia’s emerging boutique alcohol industry (there are some 2000 craft brewers and distillers) expand their footprint. Additionally, there is probably going to be a surge in domestic hospitality and entertainment spending arising from the budget tax cuts and stimulus, and inability to travel internationally:

Distillers and brewers are hoping that tax cuts targeting craft spirits and beer production will help Australia's burgeoning boutique alcohol industry expand its footprint globally, mirroring the export push undertaken by the wine sector 30 years ago
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Tuesday's federal budget offered small breweries and distillers $255 million in savings by lifting the excise relief cap – which is the mechanism by which both beer and spirit production is taxed – from $100,000 to $350,000.
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  • 1 month later...

yep, the Investor Presentation of 06 July saw a lift in the days following, from $3.20 to $4.20 in a week.

} Arguably The Most Important Metric At LRK is the Net Sales $ per Litre We Generate From Our Whisky

} The Board Has Engaged KPMG to Validate the Methodology Used to Derive the Updated Net Sales per Litre

} In An Environment of Limited Mature or Finished Whisky Lark must strategically maximise its NSR$ per Ltr

and came up with number higher than what was priced in:

} Before Assigning Any Value to Brand or Goodwill, The Lark Whisky Under Maturation is valued today at $236m

... Assuming LRK Maintains $216 NSP/Ltr the Value of Whisky Under Maturation At The End of F22 Will Be $388m

 

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  • 3 months later...

Tasmanian whisky maker Lark Distilling is aiming to be the Penfolds of Australian whisky as it steps up an export program from 2023 after a $40 million buyout of another Tasmanian distiller accompanied by a $53 million capital raising.

Lark managing director Geoff Bainbridge said on Monday the acquisition of Kernke Family Shene Estate, operator of the Pontville Distillery and Estate north of Hobart, would allow Lark to aggressively accelerate an export drive built on the high-quality “clean and green” provenance of Tasmanian whisky.

Lark is also planning to spend $13 million building a new greenfields distillery on the historic Pontville site, with a production capacity of one million litres. That would be up and running by June 2023.

The acquisition will bring in an extra 483,000 litres of whisky worth $24 million, which is in the maturation stage, and alleviate a potential shortage which had been a handbrake on Lark’s export plans.

Quote

We are following a really well known playbook in Australian alcohol, and in particular Australian wine, Mr Bainbridge said.

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  • 3 weeks later...
  • Whisky growing at 8% p.a. globally
  • Premiumisation of all  alcoholic  beverages continues
  • New whisky  consumers ... women,  more diverse demographic segments
  • New drinking  occasions ... highballs,  cocktails
  • Proliferation  of high end on premise  whisky bars
  • Promiscuous  consumption  based on experimenting and trial before  adoption

Lark Distillery is aiming for Brand leadership at home and credibility in global export markets. They seem to be getting the runs, and the reputation, taking it upmarket, as an experience.... At present.

NET REVENUE ; $4.1m +80% PCP
VALUE OF LITRES UNDER MATURATION ; $267m ...+150% PCP
LITRES UNDER  MATURATION ; 1.2m* ... +61% PCP

Aiming for 2 million litres under maturation in 2022

 

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