Farsons expecting to improve profitability following a tough year

Farsons' profitability is expected to improve as a result of remedial measures undertaken to manage costs and futher enhance efficiency and competitiveness, group CEO Louis A. Farrugia told shareholders during the annual general meeting yesterday evening.

He said that 2008 was a difficult year, characterised by a number of non-recurrent items and substantial increases in the cost of raw materials and utility costs.

Mr Farrugia referred to the construction of a new €12,500.000 Brew House as the final phase of the 1990’s master plan to renew its total plant and machinery. He told shareholders that planning design work and project management preparation were underway and a Mepa application would be submitted shortly to seek a permit to construct it, together with an additional floor and offices on top of the new Logistics Office Block. The decision on whether to start the project will be taken later this year.

“Trading conditions remain challenging. Group turnover has reduced marginally as compared to the same period last year, but the various measures of cost containment taken by management have made up for the shortfalls in revenues, and to date, targeted results are close to being attained. Subject to the performance of the early summer month sales, we remain optimistic that the operational profit for the six months to 31 July 2009 will be better than that reported for the same period last year,” said Mr Farrugia.

Company chairman Bryan A. Gera said that the group’s turnover reached €66.4 million. Group profit before tax amounted to €895,000.

The meeting approved the board’s recommendation of a total dividend of €1,000,000. Shareholders also endorsed its proposal regarding the allotment of one bonus share for every six shares held.