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Farsons Group registers increased turnover 27/04/2005

The Farsons Group turnover reached Lm26.8 million during the past financial year (which ended on 31 January 2005) – an increase of 8% over the previous year.

The increase in turnover resulted mainly from the consolidation of newly acquired businesses – particularly Quintano Foods Ltd which started operating in April 2004.

The Group Profit before taxation and minority interests for the year amounted reached Lm826,000.

Commenting about the financial results Mr Louis A. Farrugia – Farsons Group Chief Executive – said that the increase in turnover was not reflected in the profitability of the Group.  The decrease in profitability was mainly due to increased competition in the market place. However, Mr Farrugia reiterated that the Group has responded with appropriate strategies to strengthen its activities.

The results were affected by a difficult economic environment with pressure on disposable income; lower temperatures in the key summer months and resultant lower volume sales, a higher than expected initial loss from the newly formed Guido Vella Ltd, increased turnover and profits from the newly formed Quintano Foods Ltd and a change in accounting policy on the valuation of investment properties.  This change increased shareholders reserves by Lm1,138,000 net of deferred tax.

In a fully liberalized beer market, the Company managed to package 2% more volume than the previous year, as a result of the agreement which the Company had concluded with Anheuser Busch to bottle Budweiser in Malta. This was part of the strategy of the Group to optimize its resources and minimize the impact of a fully liberalized beer market on the Company’s operations.

Mr Farrugia stated that “We are also very much focused on the investment plan which we have recently announced.  Through this investment of Lm14 million over a period of six years,  we would be upgrading and restructuring all our production facilities in the most efficient way possible given the changes in market conditions and packaging regulations on soft drinks”

“The past financial year’s trading environment has been dominated by the opening up of the local market place to free trade as well as by the general economic difficulties which the economy is facing. We are however confident that the strategies adopted to face the challenges are the right ones and the steps taken by Management will give the required returns in the years ahead” concluded Mr Farrugia.