The West Winds Gin
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The West Winds Gin Australia's Champion Gins.
  • Consumer Products
  • A$932,000

    invested

  • 186.4% funded

  • 0

    time left

  • 4.79% - 26.04%

    min - max equity offered

  • A$500,000.00 - A$3,500,000.00

    min - max investment sought

  • A$500.00

    min investment parcel

OFFER IS CLOSED
Kollaras and SE Asia sales

Hi again Paul

Regarding your export sales, (and the aforementioned 8% figure) I am particularly interested in these because they obviously don't incur excise, while they offer (at least in my opinion) greater scope for growth than locally based sales from a numbers perspective. Obviously, your Kollaras agreement is for SE Asia, which I take to mean Malaysia, Singapore, Thailand and Cambodia. I fully understand that you may be limited in what you can say about sales and your marketing and distribution spend there, but what can you tell me about what % of sales are obtained there, as compared to say NZ, and the northern hemisphere markets (Europe, the US and Canada) and your future projections for SE Asia. From reading Australian and overseas press, my gut feel is that overseas sales would be driven from SE Asia, given it seems a very tough ask to distribute in the northern hemisphere despite how outstanding your products are, because of the proliferation of traditional and craft suppliers there and how entrenched they are in their respective markets.

Andrew Rurak posted on 19.06.2018

Hi Andrew

We agree with your view that the export markets offer scope for growth and the excise costs makes it attractive to target export sales.

Historically, our export sales have been opportunistic – that is we have typically responded to orders received rather than targeting specific export markets or distribution groups. Our marketing support in these countries has mainly consisted of visits by our brand ambassadors to build awareness in key on-premise venues. This has resulted in sales to a range of countries. We are also aware of West Winds Gin products being sold outside the ten countries listed in our CSF offer so it appears that some distributors may have on-sold stock via their networks.

The opportunistic sales approach means that splitting our past sales by country does not provide a good basis for future sales projections in a country. However, we believe that it shows (i) West Winds gin sells in a range of global markets, and (ii) West Winds’ unique native Australian botanicals distinguishes our award winning gins in these markets and means that our gins cannot be replicated by off-shore competitors in these markets. We believe a good analogy for export growth is from the premium Australian wine industry competes in a globally competitive sector. Accordingly, we believe that we can continue to make sales to the northern hemisphere.

Our more targeted export approach is a recent initiative and will be supported by this raise. Working with Kollaras, we expect to visit key Asian markets during July 2018. We expect that this will build on our initial sales via Kollaras. Kollaras actually have distribution agreements with distributors in the following regions: the South Pacific; South East Asia; Southern Asia; North Asia; and the UK as well as with a number of cruise lines internationally. Our relationship with Kollaras will also provide our team with key information to support our marketing and set sales targets for 2018/19. Our agreement with Kollaras provides them with a marketing budget to support the brand in each of the countries into which we take the brand with Kollaras.

I hope that this provides greater context and that you can appreciate that we are limited in our ability to provide more detailed forecasts at this time.

Cheers

Paul

Paul White posted on 20.06.2018

Replied to Andrew Rurak

June 21 Meetup and possibility of streaming

Hi Paul

Given that I am overseas (although from Perth), is there any possibility that your June 21 meet up will be streamed, or get access to some of the goings on at this function?

Best

Andrew

Andrew Rurak posted on 16.06.2018

Hi Andrew

Unfortunately we won’t have the facility to broadcast or record the meeting this Thursday but we did record an earlier event a couple of weeks ago. The quality of the video is not great, but you are welcome to jump online and watch it all the same. You can see the recording at: https://vimeo.com/275560518

Best Regards

Paul

Paul White posted on 18.06.2018

Replied to Andrew Rurak

Pre-money Val

Hi WW Team,
Congrats on your progress so far!
How did you calculate the ~A$8.6m pre-money val?
Would it be possible to have a forecast for the next 3 years?
Cheers
Federico

Federico Sgubbi posted on 08.06.2018

Hi Federico

Thank you for your question.

To set the valuation, we looked at publicly sourced data. For example, Rabobank provided a summary of Market cap/revenue multiples for 2017 for selected companies and recent acquisitions (I have put the Rabobank information in a list below). The market cap/revenue multiple range was from 2.6 - 20 times revenue (the high end was George Clooney's Tequila). We also looked at other valuation metrics. For example, Forbes published an article called Consolidation Bubbling Up In Craft Spirits, April 2017 that referenced valuations based on 9 litre cases sold with multiples of US$1,000 up to US$2,285 per case. This also supported our valuation at approximately A$8.7m based on the lower end value of US$1,000 per case.

Market cap/revenue for selected companies and recent acquisitions (estimated), 2017 - Taken from 2/6 RaboResearch | Liquid Lunch – July 2017 | July 2017
Company (Market cap/revenue - trailing)
- Constellation Brands (5.1x)
- AB InBev (4.5x)
- Diageo (5.4x)
- Pernod Ricard (3.6x)
- Becle SA de CV (4.8x)
- DPSG (2.6x)
- Coca-Cola (4.6x)
Highlighted acquisitions
- Ballast Point (8.7x)
- Bai (pre-tax benefit) (6.8x)
- BrewDog (14.1x)
- Casamigos (20x)

We understand that the CSF rules preclude us providing long term forecasts as there are too many uncertainties in such forecasts. It would be unusual for companies of our stage to have clear visibility of financial numbers three years out and there are multiple assumptions that must be made about growth over that period. However, our intention is to create value for all shareholders and to grow the business. We are focusing on building both domestic and international sales. I believe that West Winds can realise strong growth in the next three year period, however as outlined in the offer document there are associated risks.

Cheers

Paul

Paul White posted on 10.06.2018

Replied to Federico Sgubbi

Hi Paul,

What would the ROI picture? Is it only by selling the shares after you have decide to go public or similar. Or the holder of the shares would get a divided from company's net profit ...?

Gourav Sharma posted on 04.06.2018

Hi Gourav

There are a number of scenarios that could eventuate that would allow investors to realise a return on their investment. The company will review options to enable shareholders to sell their shares, including maintaining a list of any interested sellers to introduce them to any interested buyers. We will also review the potential to use some of the emerging platforms for secondary sale of unlisted shares. Over the longer term, the listing of the shares on the ASX and/or a trade sale to another company may provide a pathway to sell shares. Along the way our goal is to build a profitable business that will benefit all shareholders. The payment of dividends may also be an option, depending upon the degree to which the company decides to invest any profits back into continuing to grow the business.

Cheers

Paul

Paul White posted on 05.06.2018

Replied to Gourav Sharma

Location/Buisness Branding

In the document you have 2 addresses in Perth for the buisness, one of which is Fremantle, which you state as the principal place of buisness.
A significant part of you branding claims "Margaret River". What is the link to Margaret River? This seems like a claim to be located there? Very confusing, possibly not true?
Thanks.

Thomas Hayward posted on 31.05.2018

Hi Tom

All companies for company records are required to have a registered office and specify a principal place of business. The registered office is often a company’s accountants’ office. We have designated our North Fremantle office for most company records as this is where we manage a range of activities such as marketing & general administration.

Margaret River is where we have our still and distill all our gin. You are welcome to visit during cellar door hours or to visit the distillery when we are distilling. We do not distill every day so, subject to the availability of our distiller or the cellar door team, it is possible to be shown around. If you would like to visit the distillery then please contact us via our website - www.thewestwindsgin.com

We will also be adding another location for you to experience our gins as we are opening The West Winds Gin Bar at Bills at The Leederville Hotel this month.

Regards

Paul

Paul White posted on 01.06.2018

Replied to Thomas Hayward

Gross margin

Hi Paul,

Having a look at your projected figures for F18 I can see that your revenue number net of excise is forecast to be $2.1m and that you have COGS of $0.783m. This suggests to me you are expecting a Gross Margin of $1.349m or 63.3%.
Is this an accurate reflection of your financials?
If so, is that rate of margin sustainable as you grow?

In terms of excise. Do you manufacture and warehouse inventory underbond?

Cheers,

Cameron

Cameron Harris posted on 28.05.2018

Hi Cameron

Your calculations are correct (ie Gross Margin calculated as Revenue net of excise less Raw Materials & Production). This is a blended figure as it is based on a mix of revenue from different products (for example Broadside, Cutlass & Sabre gins, G&T cans, different product formats (eg 750mL, 200mL, 1L etc), other). This means that variation will arise based on the final revenue mix. We believe that estimates of our production & raw material costs are reflective of our current operations.

In the longer term, a reference site for alcoholic beverage industry metrics is https://csimarket.com/Industry/industry_Profitability_Ratios.php?ind=501 It shows that the alcoholic beverages industry has an overall Gross Margin of approx. 50%. This includes wine, beer, spirits etc. Within the alcoholic beverages sector, premium craft spirits have had significant growth ahead of other sub-categories of alcoholic beverages. Based on industry averages, we believe that long term gross margins of 50% are more reflective of the industry but significant variance is likely for emerging businesses and for premium craft products. We are focused on managing our production costs efficiently to support our margins and performance.
Yes, manufacture is done under bond. The majority of finished products is also held under bond prior to sale.

Regards
Paul

Paul White posted on 29.05.2018

Replied to Cameron Harris

General Questions

Hi Paul

I have many questions in regard to this Equitise offer for West Winds Gin, but I will start small with three and go from there. Fwiw, I have downloaded and read all documents, so apologise if questions are obvious in your eyes. Anyway:
1. It is clearly stated the WWG primarily use a guerrilla marketing strategy of trade shows, tasting and other events to create and then maintain brand awareness, given the extreme cost of major electronic and print advertising. However, given the increased funds that will be available after the Equitise offer, does management see a gradual refinement of this strategy, perhaps using some niche media or even mass media on a smaller scale, perhaps in the lead up to events that WWG is associated with? How, if at all, will your strategies be the same or different overseas in this regard given overseas revenue (by memory in 2016/17) was only 8% overall and your brand is slightly more mature in the Australian market?

2. I noticed that the costs of raw materials/production jumped significantly in the first three quarters of 2017/18. What would you attribute that to? (I did read about 'Pugwash' and it's arrival in mid-2015, you say even on this forum that you could comfortably handle a 3, maybe 4fold increase in production before needing to upgrade at about 250K each) so keen to know some insight here.

3. With projected revenue expected to be $4 million ish at the end of the 17/18 financial year, up from $2.759 mill at the close of the March quarter, it seems apparent to me that you are basing the substantial increase in those figures based on the ongoing roll out of Sabre G+T cans and your Perth based gin bar. Obviously there have been and will be other initiatives undertaken, but these I imagine would take a little time to bear fruit. Since I haven't heard anything about this through WWG or the Perth media, exactly what can you tell us now about the bar, given I imagine that you would expect strong initial sales from the projected June 2018 launch to drive growth, for both next year and the end of this financial year?

Andrew Rurak posted on 26.05.2018

Hi Andrew

1. Yes, we intend to use funds raised to support our marketing strategy. There will be differences between our domestic and international marketing. In the export market, for example, we have entered into an agreement with Kollaras for Asian markets (see page 18 of CSF Offer) as this provides us with support in entering key countries, including an understanding of distribution and sales with associated marketing requirements to build our brand in those countries. We intend to use a partnership model to support our export sales and marketing strategies. In the domestic market, we have primarily relied on word-of-mouth marketing to date. The CSF Offer will provide us funding to strategically increase our marketing including increased social media and focused digital marketing. This marketing will be conducted to build overall brand awareness cost effectively and to support new product launches and consumer events. We are also increasing our physical presence, through the West Winds Gin bar at the Leederville Hotel which will open in June 2018. We will review ongoing opportunities for events and increased site presence in other locations. We will also continue to be involved in consumer events, such as the Good Food and Wine Show in each state and will support industry events, such as Indie Spirits Tasting in Brisbane and key cocktail competitions.
2. During 17/18, we have launched new products including the Sabre G&T cans, 200mL product formats for Sabre, Cutlass & Broadside, gift packs, 1L bottles and the Gin & Juice kegged cocktails. We do not immediately realise the same economies of scale on new products as we start with lower volumes. With product growth, we will continue to manage our COGS and increase our margins. The current distillation and processes will enable us to increase production 3-4x. I expect that we would then install an additional stil,l similar to the one we have now, rather than upgrading to a bigger still. In order to focus on the product quality and distillation, we outsource activities such as bottling. When we started, we did hand bottle and label but the costs and time to do this as we grew was not economic. We will continue to review our out-sourced contracts to manage costs and efficiency.
3. The West Winds Bar at the Leederville Hotel will open during June 2018 – we will be announcing the launch date later this week. The bar will be a West Winds gin cocktail bar and initially will be open to the public on Friday and Saturday evenings. During the week we will use the bar for industry and consumer focused events. The bar is not expected to be a major revenue contributor during the current 17/18 year. Our 17/18 revenue budge is based on a continuation of our YTD sales alongside new activities. As you note, our Sabre G&T cans are continuing to roll out, however we have also released our 200mL bottles of Sabre, Cutlass & Broadside, our 3x200mL gift packs, 1L bottles of Sabre and Cutlass. These different product formats target different market needs and increase our product ranging in the distribution channel. As outlined in Q1, we are also increasing our export focus and these activities are underway.

Regards

Paul

Paul White posted on 29.05.2018

Replied to Andrew Rurak

Margins EBITDA

HI Toby

Thanks for your response.
It is quite difficult to get a handle on the potential of this investment.
I take it a 50% COGS (not including excise) is selling wholesale.
Do you sell direct to the public at all? Venue / internet?
4 Pillars reckon they make $800K on $10M sales - does this align with industry benchmarks?
Do you see the potential for sales great then $10M? and what sort of additional capital would be required?
cheers
Stu

Stuart Morton posted on 24.05.2018

Hi Stuart

The alcoholic beverages industry has an overall Gross Margin of approx. 50%. This includes wine, beer, spirits etc. A reference site for alcoholic beverage industry metrics is https://csimarket.com/Industry/industry_Profitability_Ratios.php?ind=501

Within the alcoholic beverages sector, premium craft spirits have had significant growth ahead of other sub-categories of alcoholic beverages. We do not have financials for private competitors however an EBITDA of $800k on $10m sales gives an EBITDA margin of 8% which is considerably less than the alcoholic beverage industry average of approximately 28% in the linked site. We believe that this lower margin is not unusual and is reflective of start-up and growth costs for early stage companies.

The press has reported costs of $1m+ to establish alternative distilleries in Australia. West Winds established its production capacity for considerably less than this amount so our infrastructure overheads are substantially lower. Our production capability will support 3 - 4x our current sales. Accordingly, based on our current cost structure, we would expect that a significant proportion of increased sales will flow to improve gross profit and EBITDA. Our intention is to continue to benchmark our performance to achieve and exceed industry benchmarks.

Yes, we do believe that there is significantly opportunity in domestic and export market to achieve annual sales much greater than $10m. For example, annual sales of A$10m represents only 0.28% of the global gin market (based on market size of A$3,624m/USD$2,718m). The link https://www.statista.com/outlook/10020400/102/gin/europe# provides statistics on the gin market.

West Winds does sell directly to the public via our website and consumers can purchase at our distillation premises in Margaret River. We expect that these sales will continue to grow, however it is likely that sales via our domestic and export distribution partners will our remain primary sales network. We believe that using this sales network will best support substantial growth domestically and internationally.

Kind regards
Paul

Paul White posted on 24.05.2018

Replied to Stuart Morton

Margins

Hi Paul

I was wondering if you could give us more colour around your profit margins.

For example at $10m t/o what does COGS and EBITDA look like?

Thanks

Stuart Morton posted on 23.05.2018

Hi Stuart

In Australia, our COGS are significantly affected by excise. As our focus is to build export sales where we will not incur excise, we expect this to reduce our overall COGS significantly. Secondly, we also expect to continue to reduce COGS as volume increases. For example, on past experience, we reduced our cost to bottle by over 50% as we completed larger bottling runs. Similarly, we have benefited from better raw ingredient and packaging prices by purchasing larger volumes.

The split export/domestic sales and excise costs has a significant impact on our final COGS. Backing out excise, so that Australian sales can be compared on an equivalent base to international sales, we would benchmark our COGS to target a Gross Margin based on Net Sales (that is COGS/(Sales less Excise) of 50%. This would be consistent with global industry players.

On $10m sales, subject to decisions on investing in future growth, I would expect to have a positive EBITDA. The magnitude will be affected by multiple factors including the mix of domestic and export sales however, I would expect that investment into continued growth in the business resources would be the primary objective to maximise shareholder value. Accordingly, EBITDA would be reduced by the marketing spend towards a breakeven level.

Cheers

Paul

Paul White posted on 23.05.2018

Replied to Stuart Morton

Investors Rights

Will Investors have pre-emptive rights" Can Inevestors be Diluted out?

Janessa Rundle posted on 21.05.2018

Hi Janessa

All new investors that invest into the company will have the same rights as the existing shareholders. The company only has one class of ordinary shares with no pre-emptive rights for any shareholders.

In the event that the company raises further capital through issuing additional shares post this equity crowd funding raise, then all existing shareholders would be diluted equally. If shares are issued at a higher valuation in future rounds, then while the total equity held is diluted, the value of a shareholding will still be increased to reflect a higher company valuation.

Best Regards

Paul

Paul White posted on 21.05.2018

Replied to Janessa Rundle

selling shares

Hi Paul,

Is there a way to sell the shares at a later stage?

Ross Graham posted on 14.05.2018

Hi Ross

We understand that shareholders are likely to wish to sell their shares in future. The company will review options to enable shareholders to sell including maintain a list of any interested sellers to introduce them to any interested buyers. We will also review the potential to use some of the emerging platforms for secondary sale of unlisted shares. Over the longer term, the listing of the shares on the ASX and/or any trade sales may provide a pathway to sell shares. Along the way our goal is to build a profitable business that will benefit all shareholders.

Cheers

Paul

Paul White posted on 15.05.2018

Replied to Ross Graham

How many bottles

Hi Paul, how many bottles a year do you produce and what's the tipping point and lead time for getting more capacity - does it take a year to build a still or a week? Are they expensive?

Robert Connell posted on 14.05.2018

Hi Robert

There are a number of elements to your question. In terms of installing a new still, in the past we have explored and/or installed stills from a range of countries including Germany, United States, China, Australia and Hungary. The costs and timelines can vary significantly and consideration of the installation labour, premises set-up and liquor license timelines is required. As a broad estimate and leveraging our prior experience, it will take 6 months to order and set up a new still of the size and configuration that we require. The cost of a new still at this scale, including installation, can range from $100k - $0.5m depending on the set-up. When required, we would expect to establish a new still at the lower end of our estimate at approximately $100-$150k subject to any decisions on still location.

Our current still has capacity for approximately a 3x production increase. In terms of bottle count, we produce a range of bottle sizes 200mL-1L as well as our gin&tonic in cans so bottle number is not the best measure of production capacity but we are producing the equivalent of about 100,000 700mL bottles currently.

Cheers

Paul

Paul White posted on 15.05.2018

Replied to Robert Connell

Competition/ Market Share/ Product Range

Hi Paul.

1. Currently, over 130 distilleries exists within Australia. Many include Gin as either the primary product or part of a range (i.e. gin, vodka, whisky). Many of these distilleries were established after The West Winds, however adding competition within the Australia Gin/ spirits market. How will The West Winds maintain market share and increase market share both domestically and internationally?

2. Do you have any information/ research of market share within the Australian Gin/ spirits market both in Aust and internationally? I.e. where do The West Winds sit compared to other producers like Four Pillars,

3. Whilst The West Winds primary focus is Gin, do you have any plans to expand the products to vodka, whisky or other spirit products? Or continue to focus on the current gin range?

Thanks
Mitch

Mitchell Allen posted on 11.05.2018

Hi Mitch

Thanks for your questions, I have answered them in 3 parts.

Market data shows that almost all gin consumption in Australia is imported gin so there is a lot of scope to increase domestic market share for every Australian gin. West Winds core advantages to grow its own share ahead of other gins are below.
(1) We have a core range of established products that have been recognized both domestically and internationally as being world-class. No other Australian gin has won the premier spirits competition run by the Royal Agricultural Society in Melbourne more than once – we have won it 3 times, most recently in 2017.
(2) We already have strong distribution in Australia through the key premium wholesalers for on and off-premise in each state. It is typically hard to get new products ranged with these wholesalers unless you have sufficient volume to show that your products will be pulled through their warehouses and they only have space for a limited number of products in their ranges.
(3) We have an established and growing brand that has strong brand recognition in Australia's on-premise trade. As you mention, there are over 130 distilleries in Australia but, as stated in an article by the Australian Distillers Association, there are probably only 15-20 craft distilleries that are serious players that have scale. Most of the distilleries are primarily making product to sell from their cellar door.

West Winds is focusing on taking our products globally while still continuing to build the West Winds Gin brand in Australia, however, most small distilleries will not be able to do this as it inevitably requires access to larger amounts of capital and management of a range of new tasks at scale from dealing with distributors, shipping & logistics, bottling & packaging and so on.

Mitch Question 2. Do you have any information/ research of market share within the Australian Gin/ spirits market both in Aust and internationally? I.e. where do The West Winds sit compared to other producers like Four Pillars,

Overall, the Australian gin market is about 3% of the global gin market. As noted in question 1, gin sales in Australia are still ‘almost all’ from international gins. We estimate that Australian gin sales are about <5% of total gin sales in Australia.

Sales information on our competitors is not publicly available however, based on anecdotal feedback, we believe that we are one of the top 2 craft gin producers in Australia. Other gins that are often ranged in Australia alongside our gins are Four Pillars and Archie Rose.

We do not believe that any Australian craft gin has a significant presence internationally. This provides an enormous opportunity for West Winds Gin. For example, the UK in 2016 exported about A$866m of gin. Gin was their 7th largest export of any product category - larger than meat and grains.

Mitch Question 3. Whilst The West Winds primary focus is Gin, do you have any plans to expand the products to vodka, whisky or other spirit products? Or continue to focus on the current gin range?

As outlined in replies to Q1&Q2, the opportunity in the gin segment is significant. Currently, this is our primary focus to be supported by the funds from the CSF Raise. We will continue to release new products, which will take the form of packaging variations to meet market demands and new gins where we see the opportunity to introduce world-class Australian gins that have a clear position in our portfolio. We will be announcing a new limited-release gin in the very near future.

We are aware that the sales distribution and logistics capability that our team is developing to market The West Winds Gins has application to craft spirits products outside gin. We continually monitor opportunities so we will remain open to expansion opportunities if they can add value to our shareholders.

Regards

Paul

Paul White posted on 12.05.2018

Replied to Mitchell Allen

Excise Tax

Hi Paul
I've seen some Federal Budget proposal in the press regarding craft beer paying less excise.
Can you explain if this also applies to distillers and if so how West Winds will benefit ?
Cheers

Bradley Howe posted on 08.05.2018

Hi Bradley
Yes, we will benefit from the increase in the excise rebate. While the news headlines spoke about craft beer, this also budget announcement also applies to craft distilleries. Currently, the maximum excise rebate is $30,000 so the increase in excise rebate to $100,000 is a great Budget announcement.

Kind regards
Paul

Paul White posted on 08.05.2018

Replied to Bradley Howe

Turnover of Directors

Hi Paul
There was a large turnover of Directors in the last financial year. Can you provide any further explanation for this (over what you have said already). In particular can you please confirm that there is not any outstanding issues or claims in relation to any of these former directors?
Many thanks
Toby

Toby Eggleston posted on 06.05.2018

Hi Toby

As the Company has grown, it has been key to bring on an experienced Board with the skills to support the stage of the business. The current Board has extensive experience growing start-ups and exiting them through both trade sale and IPO. Their backgrounds are under The Team tab above. We expect that additional Board renewal will occur alongside continued growth.

In the last year, Board changes were made as part of an investment round in mid 2017. These included two interim Board appointments made by the investor group who were involved in selecting and supporting the current Board members. All votes at shareholders’ meetings have been in support of current directors. The Company has no outstanding legal actions.

Cheers

Paul

Paul White posted on 07.05.2018

Replied to Toby Eggleston

2 Questions

Hi,

1. As per AFR article titled Rise of the specialist gin distiller dated Aug 2 2013, “The West Winds was founded in 2009 by former IT consultant Paul White and his mate James Clarke, who teamed up with cocktail guru Jason Chan and spirits salesman Jeremy Spencer. “

Are the others (James, Jason and Jeremy) still involved in the day to day business? If not, why not?

2. Is a trade sale or IPO being considered as part of the company’s exit for investors down the line?

Thanks.

Joshua Lau posted on 05.05.2018

Hi Joshua
1. Yes, as one of the four founders of West Winds Gin, we had the right product and team to launch The West Winds Gins. It has been over 8 years and, like many start-ups, roles and requirements of the business have changed as we have grown. All aspects of the business have evolved over this time, including sales, logistics, production and management.
James, Jeremy and Jason provided the management team for the majority of 16/17 year but are not involved in the business now. The Board appointed me as CEO for the 17/18 year with a refreshed focus to grow revenue and the West Winds Gin brand. Dave Aris came on board as National Sales Manager. Together the team has increased the 17/18 revenue over prior years.
During 18/19, our goals are continued revenue growth, which will include an expanded export sales focus. We will retain strong cost management controls without compromising quality.

2. We appreciate that shareholders will eventually wish to be able to exit their investment and agree that the possible routes for this are an IPO or trade sale. We will review all such opportunities that create value for our shareholders. At the current time, we believe that profitable growth will make both these options more likely outcomes within the next two years.

Cheers
Paul

Paul White posted on 05.05.2018

Replied to Joshua Lau

Admin costs

Hi there

The main reason for a drop from profit to loss from 2016 to 2017 seems to be an extra $400k or so in "Administration costs", are you able to expand on what these are, and if they have continued to increase, or otherwise in 2018? If it's wages, I'd be interested in a breakdown of new positions etc. If this is addressed somewhere already, apologies, could you please direct me to where.

Also curious as to why revenue was flat over that period, but has picked up in 2018?

Cheers
Marty

Martin Newkirk posted on 05.05.2018

Hi Marty

The Administration costs during the 16/17 year included costs for a range of external consultants and service providers, reflecting a shift in philosophy of the Board and Management at that time. Since the reorganization of the Board and Management structure in June 2017, Tailor Made has reduced the reliance on out-sourced advisers resulting in improved returns for the business. We expect to see further flow through benefits from these changes in the coming months.

Illustrating this, Dave Aris, National Sales Manager joined the West Winds team in early 17/18. He has been a great addition to the team and, as you note, Tailor Made is achieving strong revenue growth in 17/18. .

Kind regards
Paul

Paul White posted on 05.05.2018

Replied to Martin Newkirk

Financial Accounts

Hi Toby, Hope you are well. Are you able to provide detailed audited accounts for FY16A (with FY15A comparatives).Thanks

Brenton Purslowe posted on 04.05.2018

Hi Brenton

This is Paul. The detailed FY16A accounts are shown against the most recent FY17 accounts. However, I will ask the Equitise team to upload the FY16 audited accounts. These will be available alongside the FY17 accounts when uploaded.

Kind regards
Paul

Paul White posted on 05.05.2018

Replied to Brenton Purslowe

The Constitution

Hi, the Constitution doesn't seem to be in the data room. Can you please upload? Thanks

Toby Eggleston posted on 04.05.2018

Hi Toby

Thank you for your question.

If you click on the DOCUMENTS tab you will see that there are 2 more tabs under this: DUE DILIGENCE and LEGAL DOCUMENTS. If you then click on LEGAL DOCUMENTS you will find a copy of the constitution.

Paul White posted on 04.05.2018

Replied to Toby Eggleston

  • > Offer Type: Australian Retail (CSF) Offer This offer is open to Retail and Wholesale/Sophisticated investors in Australia. Whilst in New Zealand the offer is open to Wholesale investors.
  • > Company: The Tailor Made Spirits Company Limited Securities purchased are for direct equity in The Tailor Made Spirits Company Limited.
  • > Security Type: Ordinary Shares
  • > Fees Paid by Issuer: Undisclosed The fees paid to Equitise by the issuer upon successfully completing the funding round is undisclosed.
  • > Cooling-Off Rights: 5 working days - Retail investors in Australia are able to withdraw their applications for securities with accordance to the Australian Crowd Source Funding (CSF) regulations. For more information please click on the link supplied.
    More Info
  • > Related Parties: None

More detailed information about this offer is contained in this Offer Document

Offer Document
Offer overview

 

The Company is offering 2,000,000 to 14,000,000 ordinary shares under the following terms:

* The Company currently has 400,000 Convertible Notes on issue with the conversion price of the notes based on participation by the noteholders in this CSF Offer. The maximum number of ordinary shares that can be issued on conversion of the convertible notes is 5,016,544 shares. The capital structure of the Company following the close of the Offer is shown in more detail in section 2.8.1. of the Information Memorandum.

 

The Offer opened privately through the Equitise platform on 1 May 2018 and publicly on 13 May 2018. The Offer is scheduled to close at 5pm (AEST) on 17 July 2018.

Executive summary

 

 

Founded in 2011, The West Winds Gin are premium and super-premium artisanal gins combining traditional gin flavours with uniquely Australian botanicals. Over 50% of the botanicals used in The West Winds Gins are native to Australia. Our use of native ingredients is constantly diversifying as we develop new gins. Our core gins incorporate wattle seed, bush tomato, sea parsley, lemon myrtle, cinnamon myrtle, fresh lemon peel, fresh lime peel and fresh coriander.

The Sabre at 40% ABV (Alcohol By Volume) is a more traditional London Dry style of gin combining a strong citrus undercurrent with Australian botanicals such as lemon myrtle and toasted wattle seed.

 

 

 

The Cutlass at 50% ABV is a New World style gin with a distinctly savoury flavor profile. Australia’s most awarded gin, The Cutlass includes uniquely Australian cinnamon myrtle, lemon myrtle and Australian bush tomato.

 

 


The Broadside at 58% ABV is a big, bold aromatic gin that was likely the world’s first salty gin, combining distinctive sea parsley and seasoned with Margaret River sea salt.



 

 

West Winds is the only distillery to hold three Australian Champion Gin awards. Each of our core gins hold an Australian Champion Gin award in addition to multiple international awards:

  • Australian Champion Gin 2017 – The Broadside

  • Australian Champion Gin 2015 – The Sabre

  • Australian Champion Gin 2014 – The Cutlass

 

 

Key statistics
Business model

 

 

We know that consumers have a choice of gins and we cannot outspend larger spirits companies to gain attention, so it is essential that we continue to build on our success and experience by creating fantastic gins that leverage the uniquely Australian ingredients that we have at our disposal.

 

We concentrate on ensuring the team has all the core skills to develop, distill and manage the sales and marketing functions of the West Winds Gins in-house. We then outsource supporting functions, such as packaging and logistics.

 

This approach focuses the team on the gin that we make, minimises the capital outlays to grow the business and allows the team to work with the most appropriate strategic partners for each stage of the business. It also means that we work with great partners who are experts in their field making sure that our West Winds gins are available for consumers to enjoy.

 

Domestic Sales

 

Australian sales are primarily to third party liquor distributors who manage sales & distribution into the on-premise and off-premise accountants.

 

Domestic sales to on-premise accounts, most retail chains and independent retail stores are distributed through 100Proof (WA, NSW, Vic and Qld), Déjà vu (NSW, Vic and Qld), Connect Vines (SA), Liquid Library (WA) and Australian Liquor Marketers (ALM), which collectively provide access to:

  • 20 sales representatives on the east coast,

  • 3 sales representatives in South Australia; and

  • 10 sales representatives in Western Australia.

 

Key national accounts, including Woolworths, Coles and duty free are managed directly by Tailor Made. Brands that operate as part of the Woolworths banner include Dan Murphy’s and BWS, and as part of the Coles group include Vintage Cellars and First Choice Liquor.

 

 

Export Sales

 

Tailor Made first started exporting the West Winds Gins in 2013. Distribution currently includes New Zealand, Canada, the United Kingdom, France, the United Arab Emirates, Thailand, China, Malaysia and Cambodia. The company has chosen to focus on major markets and specific strategic export markets including United Kingdom and Europe, North America and selected regions in South-East Asia.

 

Traditionally, the Company has worked with its international distributors directly, however in 2018 we entered into a relationship with Kollaras & Co trading to open up new markets for The West Winds Gins in South East Asia and to consolidate our New Zealand distribution. Kollaras has been identified as a strategic growth partner because of their broad reach, excellent logistic capabilities and regional knowledge.

 

Ultimately, we believe that everyone should be able to drink great gin with their friends wherever they may be so we strive to make this a reality with everything that we do.

 

Milestones & History

 

The West Winds Gin's key milestones to date are outlined in the table below:

 

 

Strategy & Vision

  

Our mission is to make the best gins we can and share them globally while building a profitable business and creating a culture and brand that our staff and our customers embrace.

 

To achieve this mission, we:

  • Develop and distill all our gins ourselves using traditional small-batch distillation techniques.

  • Work with strategic best-in-class partners for the packaging, distribution and sales of our gins.

  • Innovate in product, packaging and process to provide consumers choice when drinking our gins.

 

 

Airline Partner

 

We have recently started working with our first major Airline partner Qantas, Australia’s leading airline. The West Winds Gins are now available in the Qantas Business Lounge Gin Bar in Heathrow Airport and The Sabre is now the house gin in the new Qantas transfer lounge at Perth airport.

 

 

Marketing Strategy

 

The success to date of West Winds Gin has been on a “guerrilla marketing” budget where we use the most cost-effective channels to market and distribute our products. We focus on digital marketing, investing in our website and e-commerce functions as well as value driven social impact donations and driving adoption through taste at events such as festivals and public education sessions.

 

 

The ability to drive sales growth online is a powerful attribute of any consumer facing brand. Craft or niche brands in many markets must be able to leverage the distribution power of the Internet and drive sales through these channels.

 

In April 2018, we launched the first “wind-powered” website where the wind strength at the customer’s location for their online purchase of West Winds Gin influences the amount that the Company donates to our favourite charity – the Sea Turtle Foundation.

 

In the future our new small batch products will be launched on our website, providing a mechanism for shareholders and loyal customers to purchase them first. Our email newsletters will include details of new products, upcoming events and other gin worthy news.

 

Risks Facing the Business

 

 

Risk is commonly described as the effect of uncertainty on a company's objectives. Risk or uncertainty may result in a positive or negative outcome. Below is a description of the main risks facing the Company. Only the risks that the Company considers may significantly impact the success or failure of the business have been included.

 

Investors should read this section before deciding to apply for shares under the Offer. There are also other, more general, risks associated with the Company (for example, risks relating to general economic conditions or the inability to sell our shares). 

 

The following table is a key risk summary. For a detailed breakdown of the key risks please see section 2.11 of the Offer Document.

 

Use of funds

 

 

Money raised in this fundraise will be used to:

  • Provide working capital for bottles and packaging, gin distillation and production costs, excise, new product roll-out and supporting costs;

  • Provide working capital to pay Australian government excise that is due on sales of spirits made in Australia;

  • Invest into marketing to increase awareness of our gins domestically;

  • Expand our international sales strategy and targeted marketing in key areas with our distribution partners.

 

The use of funds is set out in the table below:

 

* Excise duty is charged by the Australian government and is typically payable before the payment terms of many Australian customers. Accordingly, as sales grow funds are required to pay excise ahead of receipt of funds from the sale.

Financial summary

 

The following accounts are the financial summary for The Tailor Made Spirits Company Limited:

 

* Year-to-date management accounts as of 31st of March 2018 (9 months)

Paul White

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David Aris

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Appendix A - Audited Accounts

These are the audited financial statements of The Tailor Made Spirits Company Limited for the year ended 30 June 2017.

Download

West Winds Gin CSF Offer Document

West Winds Gin CSF Offer Document as at 1 May 2018

Download

Audited Accounts FY 2016

These are the audited financial statements of The Tailor Made Spirits Company Limited for the year ended 30 June 2016.

Download

The investors below have committed capital to the business in this funding round.

Kramerica Industries Superannuation Fund

17-07-2018

Claudius Stanislaus

17-07-2018

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Yasmin Sheriff

17-07-2018

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David Columbro

17-07-2018

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Forever gin

17-07-2018

Merrick White

17-07-2018

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Raj Bhattarai

17-07-2018

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Anonymouse

17-07-2018

Tony Brooks

17-07-2018

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Gaye Gelok

17-07-2018

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Matthew Rudd

17-07-2018

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Greg

17-07-2018

haroma

17-07-2018

Annette

17-07-2018

Matthew Kilgallon

17-07-2018

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Hannah Beier

17-07-2018

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Jane

17-07-2018

Natalie Vieux

17-07-2018

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Beerology

17-07-2018

Kerry Norgard

17-07-2018

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Sian Ingram

17-07-2018

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RonJoan

16-07-2018

Bruce Morrison

16-07-2018

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Ben Brash

16-07-2018

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Toby Eggleston

16-07-2018

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Mathew Hood

16-07-2018

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INVESTOR

16-07-2018

Rik Thornton

16-07-2018

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Ian Malcolm Longbottom

16-07-2018

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NinjaKondo

16-07-2018

Cat

16-07-2018

Helen Russell

15-07-2018

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Michael Brindley

15-07-2018

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Anthony McInnes

15-07-2018

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Rufus

15-07-2018

Kyle Riseley

15-07-2018

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David Box

15-07-2018

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CH

15-07-2018

Andrew Terry

15-07-2018

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Scott Ferguson

15-07-2018

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Amanda S

14-07-2018

Subiaco1986

14-07-2018

Julie Radford

14-07-2018

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JW

14-07-2018

Christine Howard

14-07-2018

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Evelynnf

14-07-2018

Majk

14-07-2018

Rachel Kerr

14-07-2018

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5x

14-07-2018

Hannah Loughridge

14-07-2018

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Lyn Jutte

13-07-2018

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dah004

13-07-2018

Nathan Trengove

13-07-2018

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Chris Davies

13-07-2018

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Rachel Loughridge

13-07-2018

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Jacob Hill

13-07-2018

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Nicole Harrowfield

13-07-2018

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Maxwell Murrihy

13-07-2018

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P Bright

12-07-2018

Margaret Loughridge

12-07-2018

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Jeff Loughridge

12-07-2018

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Isa Loo

12-07-2018

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Brad Lovelock

12-07-2018

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JGV

11-07-2018

Matthew Lynch

11-07-2018

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Brendan Clark

11-07-2018

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Christian Christiansen

11-07-2018

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COSI

11-07-2018

pinkisalegend

11-07-2018

Lawrence Lee

10-07-2018

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Graham Robert Gow

10-07-2018

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Patrick Tehvand

09-07-2018

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Dominic Khedun

09-07-2018

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lungii

09-07-2018

MARTYN WILLIAMS

07-07-2018

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JamesBlack

06-07-2018

Dimitrios Karikis

06-07-2018

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M T NG

06-07-2018

Gavan Bright-Daley

06-07-2018

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aths1234

05-07-2018

Patrice Farmer

05-07-2018

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Shelby

04-07-2018

Rakesh Chandra Reddy Patlolla

04-07-2018

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Jake Williams

04-07-2018

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Joseph Bruzzese

03-07-2018

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Teresa Jordan

03-07-2018

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Fred Chilton

03-07-2018

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Jackson Matthews

03-07-2018

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Patrick Eijkenboom

03-07-2018

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Lynnette MacMartin

02-07-2018

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Raze

02-07-2018

Pamela Campbell

30-06-2018

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Darren Pope

30-06-2018

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Nathan Turnèr

29-06-2018

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Kenneth Dhere

29-06-2018

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Kim Ryan

28-06-2018

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JD

28-06-2018

Michael Seia

28-06-2018

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lasertip

28-06-2018

Ness

28-06-2018

Tong Wang

27-06-2018

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Andrew Rurak

27-06-2018

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Michelle Drinnan

25-06-2018

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Mark Tomlins

25-06-2018

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Neil Wright

25-06-2018

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Craig Copes

24-06-2018

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David Insull

24-06-2018

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Alias

23-06-2018

MEGHAN LAGDON

22-06-2018

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Ben Leckie

22-06-2018

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Peter Billington

20-06-2018

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MRI

20-06-2018

Richard Lewis

17-06-2018

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Sriganesh Srihari

17-06-2018

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robertbarge

17-06-2018

Perth Investor

16-06-2018

SB

15-06-2018

Louisa LOGUE

15-06-2018

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GS

14-06-2018

Alan Daly

14-06-2018

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jennien

14-06-2018

Bonnie Fitzpatrick

14-06-2018

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John Doonan

13-06-2018

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Panayiota Ward

12-06-2018

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Muppet

12-06-2018

Sajeev Gopalakrishnan MAIPM

11-06-2018

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Akash Goyal

10-06-2018

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Bree

07-06-2018

mrsmac19

07-06-2018

Ina Krasteva

07-06-2018

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Kristen Barr

05-06-2018

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Steffen Zo

04-06-2018

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Julian O'Shea

03-06-2018

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jamie stowell

03-06-2018

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Jeremy Jiang

03-06-2018

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Douglas Spiegelhauer

03-06-2018

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Cameron Morrow

01-06-2018

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MelC

01-06-2018

Jak Nicholls

01-06-2018

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Simon Bunn

01-06-2018

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Sam

01-06-2018

Dylan Jobson

31-05-2018

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lianna parker

31-05-2018

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Joel Wilson

31-05-2018

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Kate Hine

31-05-2018

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JOHN KOSMAS

29-05-2018

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VL

29-05-2018

Brian Murphy

28-05-2018

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Dario

28-05-2018

Phillip Nelson

27-05-2018

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Henry Ng

27-05-2018

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Prakash Parkar

26-05-2018

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Renee Carpenter

26-05-2018

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leftery hronopoulos

25-05-2018

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Jason Hall

25-05-2018

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Kelly March

23-05-2018

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Andrew Gideon

23-05-2018

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DK

23-05-2018

Rach

22-05-2018

Brian Hamill

22-05-2018

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mcjrhl

22-05-2018

itsAlec

21-05-2018

Clifton House

21-05-2018

Nicola Ward

21-05-2018

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Dorian Cooper

21-05-2018

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Marie-Andree Fournier

21-05-2018

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Anonymous

21-05-2018

Corey Reeves

21-05-2018

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Stewart Stirling

20-05-2018

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Charly

20-05-2018

Kevin Daken

20-05-2018

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abailey

20-05-2018

JS

20-05-2018

Private

20-05-2018

Mac502

20-05-2018

Dhull

19-05-2018

Pon Law

19-05-2018

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Suchie

19-05-2018

Paul Costelloe

19-05-2018

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Lewis

19-05-2018

Jacque Jackson

19-05-2018

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Tracy Hoffman

18-05-2018

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Aaron Albrecht

18-05-2018

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Jeanne Woodall

18-05-2018

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Private

18-05-2018

Ian Tansell

18-05-2018

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norman uranie

18-05-2018

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Dylan Templeton

18-05-2018

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Andrew Walker

18-05-2018

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Bill Saunders

17-05-2018

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Michael Puser

17-05-2018

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Navin Seran

17-05-2018

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Simon Colebrook

17-05-2018

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Craig Bartlett

17-05-2018

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JDizzle

16-05-2018

J&A

16-05-2018

Toni Cunningham

16-05-2018

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Marlo Zamora

16-05-2018

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Jodie Kasatchkow

16-05-2018

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Andy Migdal

16-05-2018

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Holidays2018

16-05-2018

Sam B

16-05-2018

Elisha Carter

16-05-2018

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Joel Harris

16-05-2018

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Zouhair Diab

16-05-2018

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Annie

15-05-2018

Elliott Jenkin

15-05-2018

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Nigel Blaney

15-05-2018

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Shane Crommelin

15-05-2018

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MS

15-05-2018

Ozulu

15-05-2018

Troy Brand

15-05-2018

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Duncan Surin

15-05-2018

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BKMWG

15-05-2018

Robert Parcell

15-05-2018

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Glen Ruocco

15-05-2018

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Thomas Maher

15-05-2018

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Jake Armstrong

15-05-2018

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Marnie Compton

15-05-2018

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malcolm gill

15-05-2018

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Delgirl

15-05-2018

Haruki Laduko

15-05-2018

Mike H

15-05-2018

Richard Warren

15-05-2018

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DSWW

15-05-2018

NFP

15-05-2018

GTlime

15-05-2018

Peter Cozens

15-05-2018

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Belinda Cogswell

15-05-2018

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Warren Leitao

15-05-2018

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Stephanie Paterson

15-05-2018

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allanapplebee

15-05-2018

Peter Smith

15-05-2018

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Ian Hagen

15-05-2018

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Graeme Gillespie

15-05-2018

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Tiffany Christie

15-05-2018

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S Pollett

15-05-2018

Sarah Grimwood

15-05-2018

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Blake Young

14-05-2018

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SaraNewton

14-05-2018

Jeremy White

14-05-2018

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Joscelin Marchant

14-05-2018

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Yeun Thong

14-05-2018

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Martin Newkirk

14-05-2018

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Mary Russell

14-05-2018

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Ken Pearson

14-05-2018

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Clive D'sylva

14-05-2018

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Jonathon Wyatt

14-05-2018

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#gintime

14-05-2018

Michael Brockhoff

14-05-2018

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Natalie Bradley

14-05-2018

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Joanne Harding

14-05-2018

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Dougal Wallace

14-05-2018

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AL

14-05-2018

Sascha Engelter

14-05-2018

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Tim & Chris

14-05-2018

Dee

14-05-2018

CHONG F

14-05-2018

Ampersand 8

14-05-2018

Michael Doyle

14-05-2018

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Belinda

14-05-2018

Jane Macneall

14-05-2018

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Smgfan69

14-05-2018

Alricho

14-05-2018

Laurence

14-05-2018

eric baines

14-05-2018

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Gareth Thomas

14-05-2018

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Brendan Bow

14-05-2018

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Simon Edis

13-05-2018

Scott Blackmore

12-05-2018

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BJ

11-05-2018

Carrie Young

11-05-2018

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Katherine Porter

11-05-2018

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Virginia Christie

11-05-2018

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Barbara Kirk

11-05-2018

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Daniel Wallwork

11-05-2018

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Michelle Rankine

10-05-2018

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Elizabeth Carr

10-05-2018

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Andrew A

08-05-2018

Andrew Stewart

08-05-2018

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Roderick White

07-05-2018

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Jonathan Davies

06-05-2018

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Roddeh

05-05-2018

Paul Creighton ATF Creighton Holdings Trust

04-05-2018

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Greg Roberts

04-05-2018

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R Ralph

04-05-2018

Marc Hillary

04-05-2018

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Jonny Wilkinson

01-05-2018

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