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FARSONS ANNOUNCES IMPROVED PROFIT PERFORMANCE THROUGH INCREASED EXPORTS AND COST CONTAINMENT 20/04/2011

The Farsons Group has announced a notable improvement in its results for the financial year ended 31 January 2011.

While group turnover increased by 3.4% to €67 million, profit before tax exceeded €4 million compared to €3.1 million from continuing operations in the previous financial year, an increase of 30%.

Mr. Norman Aquilina, CEO, attributed these improved results to increased international trading activities resulting in export sales, increases in sales of beer and imported beverages on the local market, lower costs of raw materials, overhead cost containment and improved productivity throughout operations. 

Group indebtedness decreased considerably compared to the previous financial year end from €38.5 million to €31.8 million.  EBITDA (Earnings before interest, tax, depreciation and amortization) for the financial year under review amounted to €10.9 million, a notable improvement of almost €7 million for the year.  The gearing ratio, that is, the ratio of debt on the total debt and equity at year end stood at 27.1%, an improvement over the previous year’s 31.4%.

The directors also commented on the outlook for the new financial year, and envisaged that the local economy will be influenced by events in the Mediterranean and the North African front, although they note that consumer confidence and tourist arrivals at this stage are at normal levels.  With increases in the costs of raw materials and energy costs, further cost containment remains a priority for the group. 

Works on the €14 million investment in a new brewhouse and water treatment facility are underway and test brews are envisaged to commence in April 2012.  When completed, this project will free up the façade of the brewery for eventual re-development in due course. Furthermore, management is continually reviewing plans to address future production requirements.

The Board of Directors remains confident that the group’s business model is proving to be based on a resilient strategy for continued growth and development, ensuring a competitive response in the fast changing and dynamic economy that the group is operating in.

The directors shall be recommending a record total dividend to the ordinary shareholders of €2 million at its Annual General Meeting on 23 June 2011, of which €400,000 has already been paid by way of an interim dividend in October 2010.