Farsons pre-tax profit up 77 per cent

Farsons has expressed concern over the level of imported beverages sold on the market without payments being made for eco contribution and other taxes, group chief executive officer Louis Farrugia told Simonds Farsons Cisk plc's annual general meeting .

Mr Farrugia said Farsons would continue to press for a level playing field.

"While Farsons has always believed in the considerable value and importance of competition for a healthy economy, we shall remain vigilant on this issue," Mr Farrugia said.

"We can meet the legitimate challenge with appropriate strategies of low priced beverages but we must expect and insist that all traders should pay their fiscal dues."

Chairman Bryan Gera announced a six per cent increase in the group's turnover from €62.2 million to €66.1 million. Group profit before tax increased from €2.2million to €4 million, up 77 per cent.

The positive results were attributed to the group enjoying a better tourist year and economic climate. Subsidiaries Quintano Foods Ltd and Food Chain Ltd performed particularly well.

The board is recommending an improved and record dividend: apart from the €233,000 interim dividend declared in September 2007, the board has proposed a final dividend of €1,367,000, bringing the total dividend to €1,600,000. This represents an increase of 37 per cent over last year's dividend. Both payments are payable out of tax-exempt profits.

The board has approved a revaluation of its land and buildings, which is being reflected in the consolidated balance sheet. The revaluation amounts to €55.5 million and is based on the independent valuations by two architectural firms commissioned by the directors. The net surplus after providing for deferred taxation of €11.1 million, amounts to €44.4 million. This has been credited to reserves and so is part of shareholder equity.

The board has explored the best use that should be made of these properties, the long- term objective being that of ensuring new income streams to the group with added returns to the shareholders.

A board committee, chaired by Roderick Chalmers, has been appointed for this purpose. Mr Chalmers explained the board's proposal of transferring these properties to Trident Developments Limited. This company already owns various other group properties that are either being used by the subsidiary companies, rented to third parties, or retained as investment properties. The directors are also proposing that Trident Developments Limited is renamed Trident Properties plc and, as a separate public company, would be listed on the Malta Stock Exchange.

Once Trident Properties is set up, all Farsons shareholders will be allotted shares in Trident Properties plc on a pro-rata basis to their shareholding in Simonds Farsons Cisk plc.

Trident Properties plc will be managed by a separate CEO with expertise in the property sector. This will enable the company to attract strategic investors with a view to developing certain properties such as the Wands and Mrieħel sites.

Once segregation of the core food and beverage business and the property business occurs, the market will be in a better position to value the group's business. The Farsons board believes that this will result in added shareholder value.

Last year saw Farsons on the move in many aspects: new products, new packaging, a new production line, new centralised warehousing set up, new distribution channels and new export initiatives.

Referring to the construction of a new brew house as the final capital project of the company's investment programme, Mr Farrugia informed shareholders that preliminary design works have already been carried out. The board will be considering commencement of works for 2009 with completion targeted for 2011. Once this is done, Farsons would have undergone a total renewal of its operations for the third time in its 80 year history being celebrated this year.