Farsons project 'on track and within budget'

A new soft drinks packaging hall and a logistics centre are set for completion by Farsons at the end of this year, confirming that a major investment project the company embarked upon a few years ago is "on track and within budget" shareholders were told at the 60th annual general meeting last week.

The project also includes a new brewhouse which will open by 2011.

Farsons Group CEO Louis A Farrugia said the soft drinks market was on the eve of a major packaging revolution, with the lifting, on January 1, 2008, of a derogation whereby soft drinks could only be sold in returnable glass bottles.

"In effect this will open up the market to more intensive competitive activity," Mr Farrugia said.

He explained that the investment programme by SFC had been designed to prepare the group for this development. When operational, the new facilities would guarantee a fresher product to consumers as well as improved service.

The investment programme would also release substantial shareholder value in properties that would be vacated at Wands in Qormi and at the Notabile Road façade of the Mriehel site, he said.

Company chairman Bryan A. Gera pointed out that group turnover rose by two per cent last year, from Lm26,189,000 to Lm26,721,000 and pre-tax profit doubled, from Lm487,000 to Lm969,000.

Listing reasons for this improved performance, Mr Gera mentioned increases in sales of beers and beverages throughout the year; a reduction in the headcount at the brewery operations; a reduction in selling and administration costs; the further improved results at Quintano Foods Limited; and the reduction in losses in the subsidiaries, Guido Vella Ltd and Vita Sana S.r.l.

Mr Gera said that in 2006 Farsons' trading performance improved in an even more competitive market place. "Three years after Malta joined the EU, we can proudly state that our products are competing well. Our market leaders such as Cisk and Kinnie remain strong, and this year we have seen increased interest in both these products from overseas markets. We expect that further export opportunities will grow in the years to come," he said.

Mr Gera said that, as from this new financial year (2007/2008), an interim dividend will be announced after the six monthly results are declared in September. This new practice will start in September 2007.

In view of the improved results, the board has proposing an interim dividend, already declared, of Lm75,000, and a final dividend of Lm425,000 bringing the total dividend to Lm500,000. Both payments are payable out of tax-exempt profits.

This dividend was subsequently approved by the meeting.