Lark Distilling Co Ltd
ASX:LRK
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Lark Distilling Co Ltd
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Okay. Good morning, everyone. We're just waiting for a couple of additional attendees to join the call and then we'll get started. Looks like we're right to go.
Well, welcome, everyone, to our second quarter results for our 4C. Joining me today is David Dearie, our Chair and Michael Andrews, who is our Interim CFO. Some of you may have seen Michael before in some of the calls. Michael has been with Lark for 18 months. So it has a deep understanding of the Lark business. And prior to that was with Coles Group with the commercial finance team and started his career of Deloitte. So Michael has lots of experience, and we're really excited to welcome Michael to today's webinar.
I'm going to hand over straight away to David and let him open with a few comments. Thanks, David.
Hi. Good morning, everyone. Thanks, Laura, and Michael. Thanks for joining us today. You may well have seen the highlights of quarter and half year results with revenues down year-on-year due to our overly ambitious forecast and sell-in of last year. However, the continued growth in our core range of both in terms of points of distribution and consumer offtake is encouraging. Also, encouraging is the growth of our own venues as consumers return to the on-premise and tourism numbers generally improve, although not yet back to pre-COVID number, but it is encouraging to see consumer back in our venues.
And I'm encouraged that we are seeing and securing the future sales opportunity through our increased sales and brand building practices that we have in the marketplace. We also continue to craft around whiskey to provide future growth to enable Chris Thompson and his team some flexibility as the Marier whiskey to create new luxury expressions for Lark and to find those rare and limited tasks, they're excite enthusiasts and are loyal consumers. Now of course, the increased whiskey under maturation enables Chris and his team to craft and grow the luxury range of Lark whiskeys.
Last time I spoke to you, I was excited to announce that we were close to signing our CEO. And of course, received the news that Satya Sharma has signed on to lead Lark in the next phase of its growth journey, Satya as a seasoned leader in the whiskey and luxury spirits sector. He brings a wealth of knowledge, experience and relationships to Lark. He's a known brand builder. He's a known leader of people, and he knows how to build brands in the luxury section in the right way to ensure long-term sustainable growth. I think he's an inspirational leader and is determined to build Lark into a true luxury whiskey powerhouse. And I'm excited at the prospect of working with Satya and the existing executive team to further our ambitions to generate growth and to create shareholder value.
Laura and I also in talk to secure a new CFO and expect to have some news on that reasonably soon.
Overall, our company is heading in the right direction. We continue to craft amazing luxury whiskeys. We continue to build our whiskey under maturation or as we've called it in the past, our whiskey bank. We are growing point of distribution in the right outlets and building strong customer relationships. We're investing in brand building and our route-to-market capabilities and activities that speak directly to consumers and build awareness of both Lark Forty Spotted Gin.
We're on the right path, I believe, and we're pleased to see the category continues to grow. And we're also pleased to see that our category returns to more normal patterns of consumer engagement pre-COVID challenge. The luxury spirits category continues to grow in most markets globally as consumers embrace and enjoy these exceptionally well crafted beverages.
The major global spirit companies continue to drive the luxury category and remain active in the M&A activity as they seek to find no growth opportunities and new brands.
Lark in Tasmanian whiskey is growing the luxury spirits sector in Australia and continues to generate consumer interest, consumer trial, increased awareness of our category and ultimately increased consumer consumption. Our points of distribution and our point of growth enable more consumers to have the opportunity to engage with and enjoy Lark. And I remain confident in the growth of the luxury spirits in general and in our team's ability to continue to build and grow the core range of Lark. I'm confident that we have the right team in place, and I'm confident that under Satya's leadership, we'll continue to see those growth results.
With that, let me hand you over to Michael, who will take us through a little bit of the numbers, and then Michael will hand over to Laura. Thanks.
Thanks a lot, David. Just going to touch on a few of the highlights. So while the net sales result of $9.6 million for the half was down 7% versus last year, encouragingly, Q2 sales of $5.4 million increased 27% versus Q1.
Another positive was the gross margin performance, which continues to perform strongly at 68.6% for the quarter and 68.2% for the half. The 6 percentage point increase versus last year has been driven by channel mix, primarily as a result of sales growth in the higher-margin hospitality channel.
A key driver of the operating cash outflows of $350,000 for the quarter were the nonrecurring payments of $700,000 in admin and corporate and $500,000 staff costs. These costs related to the Pontville acquisition and CEO recruitment fees.
This was offset by the receipt of the first installment of the modern manufacturing brand for the new distillery build at Pontville. This $1.8 million installment was the first of 4.
Lark maintains a strong cash position, ending the half with $9.1 million in cash, plus a further $15 million undrawn bank facility available. I'll now hand over to Laura.
Thank you, Michael. So David said a lot of it just to recap the details we've explained, and from an overall sales perspective, sales are lower than the same time last year, but the fundamentals of Lark are stronger today and set the scene for our future growth opportunities.
In our whiskey business, we are continuing to build our whiskey bank with leaders under maturation increasing to 2.2 million liters. And this was achieved through continuing to produce new Lark spirit across our 3 Tasmanian distilleries in the distinct styles of the house of Lark. The versatility of these hostiles provides the foundations for our core range of Lark products and the ability to use unique cost to facilitate limited additions and luxury [indiscernible] cask.
Sales performance for the period were delivered through a focus on brand activation and distribution. Sales at the same time last year included gin sales to wholesalers in anticipation of a very strong summer period. However, these were overly optimistic in their ambitions as a result of ongoing COVID impacts.
In addition, there were several nonorganic transactions and opportunistic transactions in Q2 FY '22, in particular, to noncore channels and for old packaging lines.
E-commerce last year had elevated results stemming from consumer shopping behavior through lockdown. While we are cycling against those sales, we have been focused on building strong underlying growth in the business. Firstly, over the Christmas period, we invested in product activity to support the Christmas cask launch. This included activations in our e-commerce sites and retailers with personalized gifting and with retailers brand blocking and in-store promotional activity. Christmas cask continued to demonstrate strong gifting opportunity, and we're successful in selling through 100% of the units produced.
Secondly, we focused on growth positioning and brand investment in the core Lark portfolio. This was a combination of activities, including broadening distribution points with primarily off-premise retailers providing point-of-sale support to all retail partners and investing in brand campaigns in PR and media, which delivered 34 million PR impressions, which was up 300% year-on-year and 27 million media impressions with around 450,000 of earned media value.
The impact of this focus has delivered a number of positive outcomes over the period, including revenue growth in Classic Cask of 29% and SYMPHONY of 39%. It also increased our points of presence in independent retailers of 28%, 29% since June '22.
To deliver these results, we have invested in brand building and route-to-market activities, which has increased our brand-building expenses as a percentage of sales by 4 percentage points. However, these initiatives are critical importance to our future growth ambitions.
Lark owned hospitality venues saw strong performance of more than 100% up for the half. Tourism to Tasmania, which is a key driver of our hospitality business performance has increased by 43% at the same time last year, although still down compared to pre-pandemic trading conditions.
The increased visitation has resulted in a solid performance by all 5 venues compared to the 2 venues from the same period last year. The original venues have seen increases in performance, and therefore, we're seeing strong trading performance across the board.
Again, focusing on our core range of products, we have experienced strong performance in SYMPHONY and Classic Cask across all 5 venues.
Growth in hospitality, however, has been offset by lower performance in e-commerce channels with over $1 million lower sales compared to H1 last year. We have not been immune from the return of consumers to pre-COVID shopping and experienced behaviors in multiple sectors, and this result reflects that shift. Regardless, our e-commerce platforms are an important way for consumers to engage with our brands, and the new website launched in Q2 has helped improve customer experience in that regard both for Lark and Forty Spotted Gins.
Very importantly to our longer-term growth story was the continuation of whiskey and gin sales to export customers in Southeast Asia and China. Whilst coming from a small base, export sales grew substantially, and with our new CEO starting in May, is being carefully managed to ensure we can optimize the long-term export opportunity.
Turning to Pontville. We have submitted plans to counsel and heritage. Our architects, distillery engineers and builders remain highly engaged to deliver the new distillery when the approvals are received. In the meantime, we are continuing to improve the visitor experience at Pontville with a summer series increasing visits from locals and improving the tour experiences.
1st of February, we'll see the final component of the Pontville acquisition being the cooperage, transitioning to our supplier. The cooperage will provide us with capability to improve and diversify our cask program and our seasoning program.
Through the next period, Lark will continue to focus and build brand awareness, create an expanded core range and launch that core range with our customers and invest in our people. We will continue to layer down award-winning whiskey to support our ambitions for growth through innovative and unaccepted risky. Lark is uniquely positioned to grow its export business with strong whiskey bank and the appointment of our new CEO in Satya Sharma, who has deep industry experience. both here in Australia but also across Asia and international markets. And he commences with us on the 1st of May, and we look forward to welcoming him to the Lark team.
So we're going to show now we've got a number of questions that have come through on the line. So I'm going to start with a question regarding the CapEx commitment for Pontville distillery development. So we indicated on acquisition that the Pontville development would be around $15 million. This question -- this investment, sorry, is going to be validated, I guess when we've got the detailed design drawing back from engineering, but we made a couple of purchases of items such as copper and steel prior to the significant shifts in pricing in those sort of elements over the last 12 months. So we're in good shape to meet our objectives around that investment.
Second another question was, can you comment on the current pricing in both retail channels and DTC and whether you feel they are appropriate for both core range and limited release and read casks?
So our price positioning is intended to position us in the super premium and luxury brand category, and that's what that core range of products will do with the limited releases obviously being more expensive, which makes sense, and the Rare Cask been in that top and halo effect for the brand. So a fair bit of thought has gone into the pricing architecture and also how that impacts as we think about export markets.
So just give me 2 seconds. So another question is it would appear the pace of new product development has slowed considerably in the last 12 -- 6 months -- sorry, is this a deliberate strategy to focus more on the core range.
Yes, it has been a deliberate strategy. What we've observed is that the opportunities in that core range are quite broad, and it gives us more focus to expand our distribution, particularly with the major retailers, who are less interested in having job locks, which is essentially what a limited release is. So we're focused on that. We've got those 3 new skews coming out in April, May this year. And so that's our primary focus at this point. But we'll continue to look at and develop some innovative new products, which we've obviously seen in the future as well.
And David, I'm not sure whether you want to make any comments on the MPD strategy with the group?
Yes. I think it's a great question, and we will continue to have MPD because it becomes a very important piece of trial opportunities for Lark. It also gives the Lark enthusiasts and loyalists, and opportunity to continue to acquire Lark in different forms. So things like Tokay 100 Christmas Cask, those sort of things will continue and we'll continue to look at launching those. But it's just a question of finding the balance of time between Chris Thomson and his distillers and the sales and marketing team and also making sure that Lark is available on shelf for the consumer so that folks can get into the franchise. And that's where you're seeing the growth in point of distribution and the growth of off sales in both Lark Classic and SYMPHONY, which are 2 products, which are on the shelf.
So we'll find the balance, and you could argue that we were maybe too focused on NPD in the past, and now we're trying to find that balance between getting the core range established and continue to excite and delight the consumer with NPD as we go forward. So you'll find that balance as we go there. NPD is certainly very much a part of our strategic thinking for the future.
Thanks, David. So a question just regarding the volume of probably into casks in Q2.
So we've operated our 2 sites with us continuing to at a normal rate. So both Cambridge, Boswell and Pontville. So on average, we produced around 600,000 to 700,000 liters a year at 43% and we've obviously continued to operate those sites at that level in order to continue to build up whiskey bank for maturation over the long term.
So just a comment on -- if you provide a comment on the export business and sales mix.
So the export business is still really quite a small proportion of our overall business. We -- the partners that we've been trading with [indiscernible] into China, have taken products across the entire whiskey category. And with obviously some Rare Cask and legacy being part of that mix.
When we look at Alchemy, they have been started to take some product into Southeast Asia, but that's been entirely focused on limited releases and gin as we build the portfolio for launch of that core range of in those markets later this year.
I think the other thing just on that later, we should also be mindful of the exports that we're looking at the moment to see Lark in some of these key export markets. But it's not across the whole of the market. It selected channels, it selected retailers as we go forward. There is excised variations in each of these countries between the cost of getting product on shelf, distributor margins vary from Australia retailer margin vary from Australia. So we'll continue to test and trial products in some of these markets as we look to grow. But we -- like everyone else in the luxury spirits category, we're excited about the opportunities in some of these export markets. What we've got to do is find the balance of our involvement and our growth in those export markets to meet the luxury whiskeys that we have available to sell. So we're finding that balance as we go forward, but we're really excited about export opportunities. Sorry, Laura.
No, no, that's great. Thanks, David. A couple of questions in that sort of cross over each other. So one in particular is just about our marketing expenses and where they're at and compared now and what to start look like in the future.
So obviously, as I mentioned, we activated product market in for Christmas Cask, in particular through the second quarter. And we've also invested in the quarter on trade marketing, which is something the brand hasn't really done a lot of in the past, and that supports our positioning with major retailers and independent retailers.
In addition to that, we've been investing in the brand story and the overall brand campaigns that you will have seen. So as we move into the launch of the new core range of products. You'll see us obviously investing in the -- those product launches, and also more broadly supporting a brand story in the future. So things that we've undertaken this half have included the launch of 2 new -- 2 of the new websites, so one for Lark and one Forty Spotted Gins building that brand story, which we discussed at the annual AGM.
And that -- those types of investments will continue in their ongoing super important that we keep getting that brand messaging out there and tracking some of the brand awareness for both here in Australia and then that allows us to expand into those markets with more confidence. So I think we're getting the brand -- we're getting the marketing spend right. And I know David, myself and the marketing team and Satya being having good conversations about what that profile looks like into the future.
David, again, you might like to make a comment on that.
Yes. One of the things with our marketing expense is there are a couple of elements of marketing. Obviously, there's traditional sort of marketing activities. And then there's the people element of getting the right people on board. Both from a marketing point of view and a selling point of view, I call that our total brand building.
And the aim is to be able to win a block to build trial block and to put activities in place to pull Lark through the system. So selling it into wholesalers and retailers is one piece of the puzzle and pulling it off the shelf through trials and samplings, et cetera, is important.
And we will continue to trial things. There's a question here about MPD. MPD is not just on new products, it's in how we package things. So we've trialed some gift packs, for example, some have been more successful than others. Some have sold through better than others. So we'll learn all of that stuff. And that's where part of the real key on marketing is data and consumer intelligence we're starting to collect that data now we're starting to get some more insights into what doesn't work, and we'll continue to look at that investment in the brand to ensure that when we go to product with go to market with new products, we're going with new products that have an increased opportunity for [indiscernible].
So all of that comes into that marketing expenditure with the intent of competing against other brands in the marketplace effectively. So we'll continue to manage that whole brand-building experience from the above-the-line stuff, the digital activities we're doing, the selling activities, the people that we've got driving the brand, the brand ambassadorships that we're doing. So lots of elements of that marketing mix that we need to just perfect and investing through time. which results in Lark for getting on shelf and getting pulled off shelf and ultimately ending up in the consumers' mouths so that they can then go and become ambassadors for this wonderful luxury spirits that we craft.
So true. Just another question just in the same line around export channels and how do we see that building. One of the really important things around growing in export is to have this core range of products. And so that's been, as we said, a really big focus in getting that right. So we -- and thinking about what products will go to market in export, it will be primarily focused core products with those special Rare Cask and limited releases to support and create that halo for the brand just the same way David just described. So lots of appetite, as I said, for things like legacy and any of the Rare Cask expressions from, particularly in places like China and Southeast Asia. So we're just putting together the right portfolio to be able to do and activate that.
There was a question just regarding the whiskey that we produced this half. And so -- and where we are at.
So obviously, we've, as I said, we're continuing to produce whiskey at that rate, but we've also been selling through whiskey. So -- and bottling whiskey so that we can manage and better manage our supply chain. So yes, whiskey bank on the match ratio is a reflection of those different activities.
In terms of the sort of read some of the questions maintenance. Just a question regarding whether they obviously there, are we expecting to see interest from the majors in Lark in its assets? David, did you want to answer that one?
We're focused on building Mark as the brand in the shareholder value. So we're not, at the moment, seeking any approaches. We're focused on very much getting luck into, and through the retail environment in the domestic market and seeing in the international markets. So the future of Lark is very much about Lark's momentum as the key for us at the moment is making sure we continue to make whiskey and add it to the whiskey under maturation, which gives us the growth for the future, it's building that brand awareness in the consumer mindset and it's building that consumption level. It's also then making sure that when the consumer comes into our own hospitality venues that they have wonderful experience to leave with a great impression of what Lark has to offer as a luxury product. And by doing that, then we will continue to create shareholder value through our activities.
Awesome. So just a question around distribution points penetration and how that's been tracking for the Lark core range.
We've got great and solid distribution with all the major banner groups under say, the 2 big retailers. And that's been a feature of the business for well over 6 months now.
The independent retailers we've been targeting key retail outlets in obviously Sydney, Melbourne, Brisbane and Perth and in [indiscernible]. So we're nearing a point where the -- I guess, the opportunities there are being focused more on the retailers that are more aligned with the brand, which is obviously really important for use hurdle rates and pull-through. But moreover, we're also now turning and activity our mind to go market activation for on-premise, which were relatively low in terms of distribution points. So that's another challenging target for the next period for our sales team.
I think a selective distribution, Laura, we're keen, we don't -- we're not expecting to see market every retail shelf. It's about putting Lark and Forty Spotted on the right shelves, where the consumer who's predetermine to buy that luxury good are shopping. So if we put the product on the shelf in the right locations with the right marketing deport to ensure that the consumer the history of the heritage of quality of Lark, then you've got the opportunity to create that sale. So we'll continue to focus on that. We'll continue to focus on selling directly to consumer through, predominantly through our hospitality venues.
And we've got a great opportunity when folks come to hospitality venues for them to sample the product to take it home and then to go and seek it out on the shelf. So we've got to make sure we find Lark on the right shelves, and that's what we're focused on, whether they're national accounts and/or in the payments. We need to make sure we're on the right shelves, that's why we put some more emphasis on our sales team. That's why we're putting more brand expense behind the product to ensure that it's on the shelf, it's on the shelf in the right packaging, in the right formats where the consumer can find and purchase the product.
Yes. So Yes. A couple of other questions. Just talk through the NSV in limited releases and gift packs in 1H '23 versus pcp.
Obviously, cycled through the previous year where there was more than 40 limited releases last year. Clearly, the demand for limited releases starts to taper off when it doesn't come quite so limited if you're doing 1 every 2 weeks. So we have repositioned our portfolio so that it is focused on that core range. and that we'll look at launching limited releases as tactical to help the brand and grow rather than just trying to get it out there for speed to focusing on speed to market.
So it's important for us to take that core range up and then have those limited releases and Rare Cask sales effect into the future.
In terms of opportunistic transactions in first half '22, we mentioned that there was a number of noncore customers who purchased goods for us from our first half '22, and that included a broad range of e-commerce retailers and actually not our platforms, other people's platforms and as well as sort of one-off sales that we're focused on gin or more over the older package and older stock of Lark. So no longer aligned with the brand look and feel. So it's quite old SKUs.
So that's sort of what those transactions were and what we're cycling against and hence, why we're sort of drawing everyone's attention to the fact that the actual underlying business, core business has been growing, and we're setting the foundation for it to be more comparable and the future.
Similarly, on the -- there's a question just, I think, regarding hospitality performance and whether this represents a 6-month higher watermark and largely on disruptive trading.
Yes. Well, first half, we got a had were really COVID hasn't been an impact. It was interesting to note that tourism visits to Tasmania are still down, and I mentioned that earlier. Some initial statistics from the Tas government said they're at about 80% of where they were pre-pandemic. So Tas does a good job, hopefully see more visitors coming back to Tas, and that will certainly help hospitality venues, but this is the first time we've had a clean, if you like, quarter, which is really, really encouraging to see the growth not just in the new venues, obviously, they all have done well. They weren't delist last year, but the existing venues as well, which has been great to see.
And saying that in the hospitality venues, we should remind ourselves that they're not -- it's not just about selling obviously, cocktails and all those other parts are important. But we also have a significant proportion of those sales or retail sales. So customers that walk away with a bottle of Lark and taken home for gifting or whatever other purposes, our fleet drinking behind themselves.
Laura, one is confirming the government grant.
Sorry what was that?
Confirming the government remains confident -- remains committed to the $3 million $4.5 million.
Yes, yes, they are. So all that paperwork is signed. Obviously got things we need to do along the way, like build a distillery, Yes, it is confirmed.
Yes.
Question just regarding whether we're buying new make Spirit from other distillers.
No, we're not. We've obviously got 3 great distilleries now. We don't need outside acquisitions. And just trying to triage some of these questions. The question around whether we would expand hospitality venues into other states.
Not -- it's not in our strategic plan at this point, but we have had some good success in this quarter with a pop-up retail at David Jones in Sydney. That pop-up store operated 3 days a week. It was originally only intended to operate for 2 weeks of David Jones and [indiscernible] to stay for the full period up to Christmas, but that was a really great initiative.
And in terms of liquid on lips and meeting a different audience, a great demonstration of what can be achieved by having those sort of pop-up stores. So I think that would be a focus for us if you were going to go off state to do things along those sort of lines rather than be investing in large sale hospitality venues.
A question on the performance of on-premise wholesale. We're really small with our on-premise wholesale, this really is a part of our business that has been -- has a huge opportunity ahead of us. with both Forty Spotted Gin and the whiskey. So this next half, one of our ambitions is to make sure that we're in those hospitality venues that have the most impact and that's choosing those -- selecting those top 5, 10 venues in each city and state and targeting and making sure were those guys, so that's the first step. And then we can broaden the hospitality venue experience, no -- sorry, on plan experience further.
It's just important to note that on-prem doesn't necessarily result in massive volumes of sales. What is resulting though is great brand experience and a wet brand awareness. Liquid on lips then ultimately released to the customer being able to identify us and see us in those retail prices and be confident with the purchases that they're prepared to make.
David, do you -- can you comment on global competition in premium whiskey, acknowledging demand growing but so is supply, for example, niche distillers in Ireland.
Yes, I think David said right up front that the whiskey market is a hot market. So people are really excited and delighted to finally experience new whiskeys. And those facilities, obviously, the number of small distilleries are growing. However, not all of them have the whiskey under maturation that we have to be able to expand into those export markets and be out there and get those experiences happening with new consumers. So whilst there is competition, we're uniquely positioned to be able to grow the Lark story.
Yes. I think just building on that. I do think one of the really exciting things is the Tasmanian whiskey category has got to love the reputation in the marketplace, albeit small and albeit that many of distributors, retailers and consumers are unaware of what it actually is other than, they know that Tasmania and whiskey is luxury, it's rare, and it's winning all sorts of awards. And that makes it quite exciting. So that's one of the things that we have an advantage of.
The category in the whiskey and luxury spirits category continues to grow in many of the markets around the globe. We gave some stats out on that at the last meeting. And nothing is really slowing that we continue to see great growth as consumers are doing a couple of things. They're talking about consuming less got better. And then they're looking at new experiences on how to consume products and want to consume these products. And you're seeing the growth of spirit consumption moving into nontraditional spirit consumption opportunities.
So for example, if you take that premium tequila, we're seeing tequila countries at the moment where they're doing progressive dinners where every course is served with a different expression of tequila. So you're seeing opportunities in the category where spirits have not traditionally been consumed. And now the consumer is giving them much more license to be more widely consumed at the start and during and at the end of meals and also just in products, in general, we're seeing growth in cocktail. We're seeing growth in flavored whiskeys. And then obviously, from Lark, we're seeing this excitement around our limited release programs where we've got finishing in various cask.
So we're seeing a lot of that growth. There's nothing that we can see in the data that suggests that's going to slow down. And we're going to continue to see new users, consumers coming into the category to experience these different flavors and expression. So we're excited about that piece.
Chris Thompson and his team at distillers are excited to be continue to experiment with NPD and what does that look like, what do the flavors look like. Jason's sales and marketing heads of both Jason, they're looking at how do we get expressions of cocktails and drinks for Lark into the marketplace. There's lots of exciting things going on, and we're going to continue to see that growth.
But we should be mindful of that it is competitive out there. And therefore, that building the awareness of Lark and what we stand for becomes important. So I think that -- we continue to be excited.
Yes. so true. Just sort of a combined question regarding limited releases and the anniversary programs from last year compared to this year. We -- in the second half last year, we obviously had the 30-year anniversary with the [indiscernible] range and the legacy products that went to market as well as a couple of smaller limited release programs.
We do have some limited releases, of course, coming up in this half. The first one in early -- late in February and then following on in March. And then obviously, the core range of products coming up this quarter as well. So in a sense, that's sort of cycling against that same period last year.
In terms of the distillery, the question around the opening date, expected opening date, the expected opening date will be somewhere between 9 to 12 months after the approvals from counsel or heritage was saved. That process canceling [indiscernible] is subject to public consultation at this point. So we don't have a firm view of exactly when that will start. But if all things go according to plan, we'll be well and truly up and running into the FY '20 -- late FY '24 financial year. Yes.
Yes. I think it's worth pointing out there, Laura, that we continue to produce and craft whiskey at Pontville. It's a good operating distillate right now. It gets more efficient and a bit larger scale. But right now, it continues to produce wonderful whiskeys that we're laying down for the future.
Yes. And then just a final question regarding the press speculation regarding Sullivans Cove, there's nothing really for us to comment on, on that basis. It is speculation. And obviously, as David said, Lark is focused on building its brand and building its opportunities here in Australia and overseas, and that remains a key focus for us here the executive team and the Board.
So I think that's it. Thank you, everybody, for attending today. Thank you, David and Michael for being my partners here today. It's great to be part of the life business, great to be part of the like journey, and we look forward to speaking to you again soon when we release the half year results in February.
Thanks again, everyone, and we'll leave it at that.
Thank you.