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Farsons registers improved interim results 9/29/2021

Farsons registers improved interim results

The Board of Directors of the Farsons Group has announced its interim unaudited results for the six months ended 31st July 2021. The six months under review were all influenced by COVID-19 related restrictions, albeit of a different nature and severity than those prevailing for the previous half year to 31 July 2020. During this period the Group was better placed to combat the many and varied challenges posed by the pandemic as a result of greater flexibility in production and distribution practices as well as the consistent adoption of cost containment measures. Government measures to protect employment and to help overcome the economic fallout caused by the pandemic were extended beyond the start of the year. These factors, together with the gradual return of tourists and the Group’s continued efforts in responding to the fast-changing dynamics of the local market have contributed to a growth in turnover as compared to the same period last year and have led to improved margins being achieved across all the Group’s business sectors.

The Group registered a turnover of €41.6 million during the first six months of the current financial year, a 13% improvement over the same period of last year, during which turnover totalled €36.8 million. Increased turnover was experienced across all business sectors, being most pronounced in the franchised food operations, where almost all outlets were closed for much of the prior year period. Profit before tax for the period amounted to €5.2 million compared with €1.6 million for the equivalent period last year, resulting from the improved turnover and operating margins. Earnings per share attributable to shareholders improved from €0.053c in the first half of financial year 2021 to €0.163c in the comparative period of financial year 2022.

During the period, the Farsons Group has also continued to monitor and curtail capital investments, retaining only those investments deemed essential for ongoing projects and product development to ensure that its innovative and competitive edge is retained. The major investment currently being undertaken by the Group is the restoration and rehabilitation of the Old Brewhouse which is a landmark regeneration project to be known as The Brewhouse. A gradual opening of the various facilities is planned for the start of the New Year.

Farsons Group Chief Executive Officer Norman Aquilina said: “The pandemic seems here to stay for a while; however, it is also clearer that both public health entities and businesses are now better equipped to deal with this unprecedented situation. We are learning to live with COVID-19 and this has led to a gradual improvement in business confidence and ultimately in our results. However, uncertainty remains, and continuing vigilance is required. Complacency and pandemic fatigue are real dangers and must not be allowed to set in. Nonetheless, there is room for us to be reasonably satisfied when one considers the context of the very challenging and complex environment in which we have had to operate over the past eighteen months.”

“Looking further forward, a looming threat is the growing evidence of sustained inflationary pressures building with significant price increases being experienced across a wide range of raw materials, products and services, including particularly sharp increases in shipping costs. We must remain focused, motivated to overcome these threats,” explained Mr Aquilina.

He also expressed due appreciation to the Group’s employees who have continued to support and collaboratively respond to the measures taken to mitigate the impact of the pandemic.

Commenting on the Group’s performance, Farsons Group Chairman Louis A. Farrugia said: “The uncertainty notwithstanding, the Board is cautiously optimistic that the gradual recovery of the food and beverage market in the local and tourism sectors currently being experienced will be sustained. The Board believes that the Group is well placed to achieve the anticipated profitability for the full year to 31st January 2022 as set out in the Financial Analysis Summary that was published on 21st July 2021.”

“The challenges posed by the pandemic had meant that the Board had not felt able to propose the payment of a dividend to shareholders since the interim dividend that was declared in September 2019. These shareholders have provided millions of euros of capital to the Group over the years. Although challenges remain, as a result of the marked improvement in the results for the first six months of this financial year, and the Group’s significant retained profits as well as its very solid gearing and liquidity positions, the Board has resolved to declare an interim dividend to shareholders from its retained profits of €1.5 million, equivalent to €0.05 per share,” he added.

Mr Farrugia also noted that the Board will continue to monitor trading results, and should these continue to improve, the Board will consider the declaration of a modest second interim dividend before the end of the current calendar year.