The Lakes Distillery has unveiled plans to raise £5m from investors to push forward a growth strategy – as well as renew IPO plans.
The company, which is headquartered in Gosforth, Newcastle, became England’s newest and largest whisky, gin and vodka distillery when it opened eight years ago on the banks Bassenthwaite Lake, after setting up three handmade copper pot stills.
Since then, some of its drinks have become widely available, with its gins and vodkas on sale in supermarkets, Amazon and in hotels, bars and restaurants across the UK. Its premium single malt is available to whiskey lovers through specialists in London including Amethyst and The Whiskey Exchange, as well as the likes of Harvey Nichols and Fenwick.
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Now the distillery – which has raised more than £30million in investment since the company was founded in 2011 – is looking to increase production of its single malt, with the help of new money.
A crowdfunding campaign has been launched on Crowdcube to raise £1.25m and has already raised over 50% of its goal in its private phase before going public.
The fundraising is part of wider plans to raise around £5million, also taking investment from its pool of wealthy investors, many of whom have backed the business since it began launching the distillery .
It adds to investment programmes, which have seen £3m invested in 2020 and 2021 in its single malt production capacity, installing eight new ‘wash back’ fermentation tanks, to be added to the four existing ones – a project that has been delayed by the pandemic as well as bad weather.
This means that the company now has a production capacity of 130,000 liters of alcohol per year at 375,000 liters.
Chief Financial Officer David Robinson said: “The reason we are raising capital now is to start putting this increased production to work, and it is capital funding that will help us do that.
“The total we’re trying to raise is £5m – our Crowdcube campaign going live will have a target of £1.25m, and that’s just part of the source of our funding It’s used to make single malt whiskey – we can’t earn that much every month We don’t really need £5m today – we can afford to increase that over the 12 next few months if we want to, but it’s cleaner and more efficient if we increase it all at once.
“We have £659,000 at the moment, before going live, which is a good start. It keeps ticking.
“We’re at a pretty exciting time really. We are now at a tipping point where we have more and more single malts in stock and it becomes the right age, good quality and good profile that we are targeting, and we can start increasing that.
“If we didn’t increase production, we could protect our stock – but if we increase production, we can increase sales in the years to come. If we produce more now, we can sell more now – we can start using our stock more aggressively. »
The company put its IPO plans on hold in 2018 after some investments it garnered during the initial process began to falter.
Robinson said the company’s governance structures remained in place from that initial IPO plan and it was ready for a future liquidity event.
He said: “We’ve had many shareholders who have been brilliant supporters of ours, in some cases since 2012, and we as a board are absolutely committed to providing a liquidity event for those guys.
“Our preferred path at the moment is to revisit an IPO. If we can successfully complete this fundraiser, the board’s attention will turn to that – and that’s a short to medium term goal for the advice.