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Farsons reports a solid performance as Group pursues innovation and exports 28/06/2016

Farsons reports a solid performance as Group pursues innovation and exports

Farsons Group reported another set of satisfactory results for the financial year ending 31 January 2016 following consistent improvements both in the Group’s operational assets and its brands’ marketing strategies, as well as the large investments the Group has undertaken which led to more efficient, productive and creative packaging choices. This was stated by Mr Louis A. Farrugia, during his Chairman’s address at the 69th Annual General Meeting of Simonds Farsons Cisk plc held at Spinola Suite, Hilton Malta.

He said: “The newly built €27 Million state-of-the art Beer Packaging Facility is now complete, on time and on budget. This facility will enable Farsons to produce and pack beer and soft drinks in exportable packages, at competitive prices making it possible for the Group to embark on its vision of establishing itself as a regional player within the beverage sector. This major investment closely follows the €12.5 million investment in the new Brewhouse, completed in 2012. We have replaced most of our critical operational assets, and are well placed to benefit from these investments for years to come.”

Further important investments include the extension to Farsons Logistics Centre and the enlargement of the administration block – both projects due for completion over the summer of 2017. While the Logistics Centre project will facilitate the important storage and distribution functions, the office extension will enable the co-location of all executive, marketing, finance and administration staff, enabling the company to vacate the main brewery building, and paving the way for the planned Farsons Business Park project.

“It is the Board’s intention to put forward to shareholders the proposal of the intended spin-off of our non-operational property assets into a newly listed public limited company (plc) in 2017. Much work is underway in preparation for this important and complex transaction. We believe that the proposed plan of rehabilitating and converting the old brewery building into an office business park with an accompanying car park, visitors centre which will exhibit the Farsons Story, as well as food and beverage outlets to service the employees in the Mrieħel area, is a feasible investment which can benefit and enhance shareholder value,” he said.

In reviewing the performance of the Group’s business and brands, Farsons Group Chief Executive Mr Norman Aquilina said: “Focussing on innovation and exports in response to the competitive pressures, our twin strategy has delivered a very encouraging performance with improved year-on-year results. The Group registered €10.1 million in profit before tax, exceeding last year's record performance by almost 23%. EBITDA (earnings before interest, tax, depreciation and amortisation) increased by €1.5 million over the previous year to reach €18.7 million,” he said.

“In both areas of innovation and exports, we have made significant strides forward. Focal points for us were the upgrade of the brand imagery and packaging of our beer portfolio, and the launching of new products, such as Cisk Pilsner, which are being well received by both consumers and the trade. For the first time, new export markets in West Africa and South East Asia were successfully penetrated, serving as a basis for future growth. Positive sales momentum for Farsons beers was also experienced in Italy, while exports to other established markets in Europe, Asia and Australia continue to hold their own. In line with our long-term strategy, further growth is envisaged now that the new Farsons Beer Packaging Facility is fully operational,” noted Mr Aquilina.

During the AGM proceedings, Dr Max Ganado and Mr Roderick Chalmers were uncontested and re-elected as Directors.

All resolutions proposed at the Annual General Meeting were approved.

The Annual General Meeting approved the Board’s recommendation of a final net dividend of €2.2 million, bringing the total declared dividend for the year to €3.2 million.