Annual Report for the year
ended 31 January 2022
02. Chairman’s Statement
04. Board of Directors
05. Board Committees
05. The Farsons Foundation
05. Senior Management Board
06. The Brewhouse – an Icon Returns
08. A New Experience for Visitors
10. Group Chief Executive’s Review
35. Financial Statements
36. Directors’ Report
40. Statement by the Directors on
Non-Financial Information
47. Corporate Governance Statement
54. Remuneration Report
58. Statements of Financial Position
60. Income Statements
61. Statements of Comprehensive Income
62. Statements of Changes in Equity
64. Statements of Cash Flows
65. Notes to the Consolidated Financial Statements
96. Shareholder Information
97. Five Year Summarised Group Results
CONTENTS
1
ANNUAL REPORT
2021/22
It is my pleasure to present the 75th Annual Report of
Simonds Farsons Cisk plc for the year ending 31st January
2022 (FY 2022). Last year, if you recall, we reported on
the diculties we faced when confronted with the global
outbreak of COVID-19 and the measures which both
the authorities and we were forced to take to mitigate
the impact of the pandemic on our business and the
community. We reported how it aected our markets right
across our various business units and how our trading
performance was adversely impacted; Group turnover
fell by 29% and profits before taxation by 64% year on
year. Nonetheless, thanks to the early implementation of
remedial actions we still managed to report what was in
the circumstances a small but respectable profit for FY
2021. Cost cutting, strict inventory, receivables and capital
expenditure controls, as well as the government supported
job protection scheme all contributed towards managing
the COVID-19 induced impact on our business.
This year I am pleased to inform you that trading during the
year under review has much improved. Details of our sales
performance are well documented in the report by our Chief
Executive Ocer, Norman Aquilina. Group Turnover reached
€91.8 million, an increase of 26% over the €73 million
reported last year. Operating Profit increased by 137% to
€13.4 million (2021: €5.7 million), whilst Profit before Taxation
rose to €12.2 million from €4.4 million, an increase of 175%.
Trading during FY 2022 was clearly aected by the
measures taken to close bars and restaurants for the
months of January through to May 2021, and the additional
restrictions re-imposed in the latter part of the year. At
968,000 tourist arrivals in calendar 2021 were down by
65% over the peak year of 2019 when 2.7 million arrivals
were recorded. Whilst the tourist sector has clearly not
yet fully recovered, the beverage market was particularly
strong in the autumn months as infection numbers reduced
in response to the eective vaccine programmes. At the
time of writing this report, there are clear signs that the bars
and restaurant sector is back in business and most of the
restrictions have now been removed.
During the year much investment has been directed at
completing the redevelopment of the old brewhouse. I
remind you that the investment consists of converting
this iconic industrial complex into a visitor experience, a
brand store, a casual dining outlet, a brewpub, a ‘CISK’ Tap
bar, a microbrewery, oce space for rental, a board room
facility and events space for hire. It has been a particularly
complex restoration operation involving complicated
structural alterations. This project is being coordinated with
the Trident Park development being carried out by Trident
Estates plc and is to be named ‘The Brewhouse’.
A separate Board of Directors, which I chair, has been
appointed to oversee the management of The Brewhouse
operations. A programme of openings is currently being
finalised and all units will be opened over the course of
2022. We anticipate that this new subsidiary company
will be financially profitable in the short to medium term.
Moreover, we believe that The Brewhouse and its activities
will make a very positive contribution towards enhancing
the image of the Farson’s beer brands through the
stunning displays at the Farsons Visitor Experience and
the compelling story of our history and heritage and the
evolution of our very own iconic local brands.
Our CEO’s comprehensive report outlines the performance
of our various business sectors. All our units markedly
improved both turnover and profitability. Turnover of our
CHAIRMAN’S
STATEMENT
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SIMONDS FARSONS CISK PLC
Brewing and Beverage production sector increased from
€43.1 million in FY 2021 to €51.3 million (+18.8%) in the year
under review, whilst the segment’s profit more than doubled
from €4.9 million to €9.9 million (+103.7%). The Importation
of food and beverages sector increased from €26 million to
€31.9 million (+22.5%), again with profit from the segment
up substantially from a loss of €366,000 to a profit of €1.9
million (+631%). Turnover of our franchised food retailing
operations increased from €11.7 million to €15.7 million
(+34.4%) whilst the profit increased from €1.2 million to €1.6
million (+35.2%).
These are indeed impressive numbers. Furthermore,
EBITDA for the year reached pre-2019 levels at €22.7
million - up from €14.9 million in FY 2021. Net borrowings
at the balance sheet date are down to record low levels at
€10.3 million. In fact, our gearing percentage is at 50 year
all-time low of 12.6%. Given this all-round improvement in
performance your Board is pleased to propose a net final
dividend this year of €4 million payable in June of this year.
You will note that the Board of Directors is also proposing a
bonus issue to shareholders (on a pro rata basis) of 1 (new)
share for every 5 shares held. This bonus issue will be subject
to the approval of the shareholders at the forthcoming
Annual General Meeting. 6 million new shares of €0.30
each (fully paid up) will be created and will be funded by
the capitalization of €1.8 million from retained profits. A
resolution will also be brought before the Annual General
Meeting to increase the authorized capital of the Company.
Having fought our way through the severe immediate
impact of COVID, we are now facing the economic
aftermath. These global challenges have been gravely
exacerbated by the outbreak of war between Russia and
Ukraine. Business confidence is taking a hit from growing
inflationary pressures and significant supply chain issues.
Once again – but for dierent reasons - we are facing an
uncertain future. However, we are encouraged by the
resilience that our business has demonstrated when tested,
the strong revival of the on-premise sector and the growth
in tourist numbers being forecast.
We have plans to grow our restaurant business by opening
four new outlets in the coming months, and we are also
planning to build a new state of the art logistics centre for
our food business. Exports of our beverages reached record
levels last year and we aim to continue to grow this segment
in the years to come. Clearly, we shall continue to look at
market opportunities both in Malta and overseas.
It has been a challenging 24-months in facing the diculties
of COVID-19 and its impact on business confidence. As
always, I am very thankful to all the workforce for their
continued loyalty, hard work and commitment.
On 25 November 2021 we learnt of the shocking news of
the sudden passing away of our dear colleague Director, the
Baroness Christiane Ramsay Pergola.
She had attended a meeting of the Board two days before her
death and news of her death was even more poignant and sad.
She served on our Board for more than six years and was an
important representative of the Scicluna family who have
been a loyal and steadfast shareholder for nearly 75 years.
We shall miss her presence and engaging personality.
We are pleased to welcome her daughter, Baroness
Justine Pergola, on to the Board of Directors. We extend
our deepest sympathy to her for her tragic loss and look
forward to her participation for the years to come.
Our sincere thanks also go to the management team
ably led by Norman Aquilina. They have worked well and
with great determination under dicult and challenging
circumstances and have produced much improved results.
I am also most grateful to my fellow Directors who have
always shown their commitment to the tasks and issues that
the Company has had to face.
And finally, a word of thanks to our legal advisors and
auditors, Messrs Mamo TCV and PWC respectively.
Louis A. Farrugia
Chairman
25 May 2022
3
ANNUAL REPORT
2021/22
Baroness Christiane
Ramsay Pergola
up to 25 November 2021
Ms Antoinette Caruana
Company Secretary
Marquis Marcus John
Scicluna Marshall
Ms Marina Hogg
Baroness
Justine Pergola
from 13 January 2022
Dr Max Ganado
Mr Michael Farrugia
Mr Roderick
Chalmers
Mr Marcantonio
Stagno d’Alcontres
Vice–Chairman
Mr Louis A. Farrugia
Chairman
BOARD OF
DIRECTORS
4
SIMONDS FARSONS CISK PLC
BOARD
COMMITTEES
THE FARSONS
FOUNDATION
SENIOR MANAGEMENT BOARD
Corporate Governance Committee
Mr Roderick Chalmers – Chairman
Mr Michael Farrugia
Dr Max Ganado
Ms Marina Hogg
Baroness Christiane Ramsay Pergola up to 25 November 2021
Related Party Transactions Committee
Dr Max Ganado – Chairman
Ms Marina Hogg
Baroness Justine Pergola from 30 March 2022
Baroness Christiane Ramsay Pergola up to 25 November 2021
Mr Marcantonio Stagno D’Alcontres
Remuneration Committee
Mr Marcantonio Stagno d’Alcontres – Chairman
Mr Roderick Chalmers
Marquis M. Scicluna Marshall
Audit and Risk Committee
Mr Roderick Chalmers – Chairman
Ms Marina Hogg
Marquis M. Scicluna Marshall
Board of Administrators
Mr Louis A. Farrugia – Acting Chairman
Ms Antoinette Caruana
Mr Michael Farrugia
Mr Franco Masini
Mr Mark Miceli-Farrugia
Mr Arthur Muscat
Mr Norman Aquilina
– Chairman
Mr John Bonello Ghio – Group Head of Food Business - up to 16 January 2022
Mr Chris Borg Cardona – Head of Logistics & EcoPure Limited
Ms Antoinette Caruana – Company Secretary and Group HR Manager
Mr Eugenio Caruana – Chief Operating Ocer
Mr Michael Farrugia – Executive Director - Operations & Business Development
Mr Philip Farrugia – Head of IT and Business Services
Mr Gordon Naudi – General Manager Food Chain Limited - from 7 February 2022
Mr Sean Portelli – General Manager Quintano Food Limited - from 1 February 2022
Mr Pierre Stafrace – General Manager FBIC
Ms Anne Marie Tabone – Group Chief Financial Ocer
Ms Susan Weenink Camilleri – Head of Sales & Marketing
5
ANNUAL REPORT
2021/22
AN
ICON
RETURNS
After almost a decade of careful planning and preparation,
The Brewhouse is finally set to reopen its doors to the
public. Covering over 7,000 square metres of Grade 2
listed, industrial space, its restoration and rehabilitation
has been an epic undertaking, which will see one of Malta’s
most iconic and much-loved buildings transformed into
an exceptional mixed-use destination. From the launch of
the very first Cisk Bar, to the opening of a Farsons Brewery
Visitor Experience and Brand Store, a Microbrewery and
Brewpub, a Café, Bar and Bistro, multiple event spaces
and a range of unique industrial oce workplaces, The
Brewhouse is a landmark regeneration project, unlike
anything seen to date in Malta.
Designed by internationally renowned Ian Ritchie Architects
and taking cue from some of Europe’s leading industrial
conversions, the design philosophy has been to provide a
game changing perspective for industrial heritage in Malta,
which pays tribute to the pioneering vision and legacy
of the brewery and brands. As one of the first and finest
examples of a concrete reinforced building, great care has
been taken to sensitively retain the inherent high aesthetic
qualities and fabric of the Art Deco building, while in site
brewing machinery and equipment will provide a thematic
backdrop throughout the spaces, which have been flooded
with natural light from two large skylights and atriums
that now penetrate the building. Moreover, as part of the
redesign, large and colourful geometric shapes have been
introduced at every floor, providing a playful touch to the
ambience, as well as added light and cross ventilation.
Core to this redevelopment has been the conversion of
circa 2,000 square metres to house a range of unique
industrial workspaces for third party leasing. From the
conversion of the former malt stores and cellars to the
transformation of the former open fermentation vats,
a portion of which will be allocated to hot desk leasing,
The Brewhouse together with its neighbour Trident Park,
concurrently being developed by Trident Estates plc, will
oer an inspiring, campus type lifestyle. With a selection of
tenants already signed up and operating on site, a range of
amenities and event spaces for large and small workshops,
seminars and conferences will only add to the overall
outstanding environment and ambience.
Artist's Impression – The Brewhouse exterior Artist’s Impressions – The Brewhouse interior
6
SIMONDS FARSONS CISK PLC