{"text":[[{"start":12.43,"text":"The auditor of one of the UK’s largest fine wine investment companies has warned that its future could be in “significant doubt” without further funding, underlining a sector-wide slump made worse by US tariffs. "}],[{"start":27.48,"text":"The warning came in the latest accounts of Cult Wines, the business co-founded by Tom Gearing, a former finalist on the UK version of The Apprentice, that revealed pre-tax losses of £5mn in 2024. "}],[{"start":44.28,"text":"While that was an improvement on the £6.4mn Cult lost in the 2023 financial year, the accounts also showed a 43 per cent drop in turnover and an increase in net liabilities to £21.6mn from £17.1mn a year earlier. "}],[{"start":63.11,"text":"Azets, the auditor, pointed to the liabilities in its warning that Cult could end up with a financial shortfall if it failed to meet management’s forecast that it would generate cash consistently this year. "}],[{"start":76.85,"text":"“These conditions indicate a material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern without further funding,” the UK accounting firm said. "}],[{"start":91.47999999999999,"text":"Cult’s difficulties come during a tough period for the fine wine industry, which is starting to emerge from a lengthy bear market that has hit the prices for top-end Burgundy, Bordeaux and vintage Champagne."}],[{"start":105.16999999999999,"text":"Wine prices dropped 2.5 per cent last year, according to wine exchange Liv-ex’s Fine Wine 100 index, with US President Donald Trump’s tariffs on EU imports hitting the sector hard. They were up 0.6 per cent in the first two months of this year."}],[{"start":125.1,"text":"But Gearing told the FT that steps to stabilise the business, including reducing its headcount from around 65 full-time staff to about 35, were already showing signs of success despite “such a difficult” market. "}],[{"start":142.39,"text":"He described the auditor’s comments as being “fairly boilerplate language” and said last year’s revenue numbers, which are yet to be formally released, were higher than in 2024."}],[{"start":154.27999999999997,"text":"“We’ve had to navigate a really tough market,” he said. “We were bloated at our peak, but now we’re operating much more efficiently.”"}],[{"start":163.41999999999996,"text":"Cult, which helps investors build portfolios of fine wine, has developed a trading platform called CultX, which provides real-time bid and offer prices. Founded in 2007, the firm became one of the biggest buyers of new Bordeaux wines before they are bottled, the so-called en primeur market."}],[{"start":185.30999999999995,"text":"But it has struggled in recent years as investors have opted for booming markets such as US tech stocks and gold rather than fine wine. US tariffs deterred American buyers, while demand from those in China has weakened."}],[{"start":201.44999999999993,"text":"The decline has reversed a bull market during the coronavirus pandemic, when buyers with time on their hands, cash to spend and easy access to cheap borrowing drove prices to records in late 2022."}],[{"start":218.13999999999993,"text":"Cult said waning sentiment and lower prices had led to higher-than-normal customer exits, cutting assets under management — the total value of client wines and cash — to £205.7mn as of December 2024, from £260mn a year earlier. Gearing said they had fallen further to about £185mn."}],[{"start":242.61999999999992,"text":"The firm also restated its 2023 figures, widening its loss that year due to the omission of a purchase invoice for more than £890,000. Gearing said that it was common in the wine industry to make purchases where the order was placed in one year and the invoice arrived in another. "}],[{"start":266.0999999999999,"text":"“An error in the audit resulted in an invoice being incorrectly allocated to the wrong year,” he said."}],[{"start":283.4699999999999,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1775800864_6563.mp3"}