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COMPANY ANNOUNCEMENT: Approval of Annual Report and Consolidated Financial Statements 2021 5/26/2021

The following is a Company Announcement issued by Simonds Farsons Cisk plc (the “Company”) pursuant to Chapter 5 of the Listing Rules as issued by the Listing Authority in accordance with the provisions of the Financial Markets Act (Chapter 345 of the Laws of Malta) as they may be amended from time to time.


The Board of Directors of Simonds Farsons Cisk plc (the Company) has on Wednesday, 26th May 2021 met and approved the Annual Report and Consolidated Financial Statements of the Company and the Group for the year ended 31st January 2021 (FY 2021), and resolved to propose the same for the approval of the shareholders at the forthcoming Annual General Meeting.

The Board of Directors has also authorised for publication the said Annual Report and Consolidated Financial Statements for FY 2021, which is attached herewith and is available to the public on http://www.farsons.com/en/financial-statements.

In terms of Listing Rule 5.16.24, where any published information materially differs by ten per cent (10%) or more from (inter alia) any forecast or estimate published in the Financial Analysis Summary (the FAS), then the Company Announcement must contain an explanation for such a difference.

The 2020 FAS, prepared by Rizzo, Farrugia & Co (Stockbrokers) Ltd and published by the Company by way of a Company Announcement dated 23 September 2020, contained the forecasts for FY 2021 which, whilst taking account of the reduction in business and results as reported for the six months to 31 July 2020, also drew attention to the fact that the forecasts contained therein had been compiled on the best information that was available at that time, and included assessments by management and the Board of the forward impact on the Group’s business resulting from the ongoing Covid-19 pandemic. It noted that the business environment at the time of preparation gave rise to significant uncertainty and the lack of forward visibility.  The Board therefore cautioned readers of the FAS that they should take these uncertainties into account and appreciate that the forward-looking forecasts came with a lesser degree of confidence and assurance than would ordinarily be the case in normal business circumstances.

In the event, reported Group profit before taxation for FY 2021 amounted to €4.4 million, as compared with a forecast included in the FAS for the year of €2.3 million.  This difference resulted from a number of factors including (a) expenditure containment and related measures taken by management and the Board in response to the evolving situation resulted in cost savings at a higher level than originally anticipated, (b) government wage supplement and related job protection measures were extended beyond the period confirmed at the time of the preparation of the FAS and (c) whereas turnover at the Food Chain on-premise outlets was severely impacted over the year by extended periods of mandated closure, the drive-thru outlets and take home delivery service performed better than forecast.

The forecast tax charge for FY 2021 included in the FAS stood at €0.5 million.  In the event, the reported charge for the year amounted to €1.1 million, with the increase in the charge resulting from a partial de-recognition of the deferred tax asset arising from the uncertain economic outlook and more subdued forward-looking profit expectations caused by the pandemic and its expected ongoing impact on the tourist sector.

Given the cancellation of all dividends to shareholders over the past year, the Board would have liked to have been in a position to recommend the declaration of a modest final dividend for FY 2021 to the forthcoming Annual General Meeting.  However, the Board also believes that it would be prudent to await developments – and to see what happens over the coming summer months in Malta and across Europe – particularly in terms of the opening up of the tourist market – a sector that is so important to Malta’s economy and to the Group’s business.  If things go well, then the Board would consider favourably the declaration of an interim dividend at the time of the announcement of the half yearly results in September 2021 – by which time the Board would have had a better view as to how the business has performed over the important summer months. The situation will be kept under careful and constant review, and shareholders can rest assured that appropriate dividend distributions will be resumed as and when it is judged prudent to do so.

As stated in the Company Announcement issued on 3rd May 2021, the 74th Annual General Meeting of Simonds Farsons Cisk plc shall be convened remotely on Thursday, 24th June 2021 at 5.30pm.

Antoinette Caruana
Company Secretary