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Resilient Farsons reports recovery 5/25/2022

Resilient Farsons reports recovery

Simonds Farsons Cisk plc, in announcing its financial results for year ended 31 January 2022, reported a profit before tax of €12.2 million, reflecting an increase of €7.7 million over the previous year.  Group turnover amounted to €91.8 million, an increase of 26% compared with €73.0 million the previous year.   The recovery in turnover was registered across all segments of the Group’s businesses.

Earnings before interest, tax, depreciation, and amortization (EBITDA) rebounded back to pre-Covid levels and amounted to €22.7 million for the year as compared to €14.9 million last year. The Group’s net borrowings amounted to €10.3 million, representing a decrease of €8.3 million from the year before.  Gearing at the year-end stood at 12.6% as compared with 16.8% the previous year.  The reduction in indebtedness resulted from the strong focus on trade collections together with the VAT and tax payment deferral schemes that remained in place during the year. 

Farsons Group Chief Executive Norman Aquilina explained that “This year can best be described as a year of resilience and recovery during which we have delivered a good set of results in very challenging times.  This was attainable due to a strong focus on execution and a step-up in productivity, a proactive approach in both procurement and pricing along with the disciplined implementation of alleviating our expenditure.  The Group also maintained a dynamic and selective resource allocation policy”.

He further stated that “Our performance in the financial year ended 31 January 2022 has reaffirmed the strength of our brand portfolio and resilience of our business – our people, our operations, our financial strength.  While this has certainly been a highly challenging year, it has made us a stronger business, better prepared for a fast-changing world”.

Mr Aquilina concluded by stating that “though the outlook remains challenging, the Group’s strategic direction is to return to a growth mindset” and that “resilient and resourceful, the Group remains determined to push forward its ambitions for further profitable growth, whilst always balancing profit with purpose”.

Commenting on the Group’s performance, Farsons Group Chairman Louis A. Farrugia said: “Having fought our way through the severe immediate impact of COVID, we are now facing the economic aftermath.  The consequential global challenges have been 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.  Nonetheless, 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 forecasted.”

Mr Farrugia also referred to the major investment currently being undertaken by Farsons in the restoration of the Farsons Old Brewhouse.  With a cumulative investment to date of €14.5 million, it is planned that all facilities should be opened during this current year.  This historical industrial redevelopment project will comprise a Farsons Brewery visitor experience, a microbrewery, a brewpub, a Cisk bar, a restaurant, a retail brand store, and multiple indoor and outdoor event areas for both business and leisure activities. He also commented on the ongoing capital investment allocated to the development of additional outlets in the franchised food retailing businesses, and the launch of the new Boost Juice Bar franchise which will commence operations very shortly. 

Encouraged by the results achieved during the financial year under review, the Board of Directors will be recommending to the forthcoming Annual General Meeting, the declaration of a net final dividend for the financial year ended 31st January 2022, amounting to €4 million, which if approved will be paid to shareholders on the 24th June 2022. 

Furthermore, and in the light of representations made by a number of shareholders in the recent past, the Board will also be recommending the distribution of a bonus issue to shareholders (on a pro rata basis) of 1 share for every 5 shares held. This proposed bonus issue of 6 million shares of €0.30 each (fully paid up) will be funded by the capitalization of €1.8 million from retained profits. The distribution of the bonus issue of shares to shareholders will be subject to the approval of the shareholders at the forthcoming Annual General Meeting and date of allotment will be announced after the Annual General Meeting.  

The Farsons Group will be holding its Annual General Meeting remotely on the 23rd June 2022.