Farsons pre-tax profits increase by 30 per cent

The Farsons Group has announced a pre-tax profit increase of 30 per cent for the financial year ended January 31, 2011. While group turnover increased by 3.4 per cent to €67 million, profit before tax exceeded €4 million compared to €3.1 million in the previous financial year.

Norman Aquilina, Farsons CEO, attributed these improved results to increased international trading activities resulting in export sales, increases in sales of beer and imported beverages on the local market, lower costs of raw materials, overhead cost containment and improved productivity throughout operations.

Group indebtedness decreased considerably compared to the previous financial year end from €38.5 million to €31.8 million. EBITDA (Earnings before interest, tax, depreciation and amortisation) for the financial year under review amounted to €10.9 million, an improvement of almost €7 million for the year. The gearing ratio, that is, the ratio of debt on the total debt and equity at year end stood at 27.1 per cent, an improvement over the previous year’s 31.4 per cent.

Farsons’ directors, who approved the company’s financial results yesterday, commented on the outlook for the new financial year, and envisaged that the local economy will be influenced by events in the Mediterranean and North Africa, although they noted that consumer confidence and tourist arrivals at this stage are at normal levels.

“With increases in the costs of raw materials and energy costs, further cost containment remains a priority for the group,” the directors added.

“The Board of Directors remains confident that the group’s business model is proving to be based on a resilient strategy for continued growth and development, ensuring a competitive response in the fast changing and dynamic economy that the group is operating in.”

The directors shall be recommending a record total dividend to ordinary shareholders of €2 million at its annual general meeting on June 23, of which €400,000 has already been paid by way of an interim dividend in October 2010. A dividend of €0.0533 per each ordinary share of €0.30 will be paid by not later than June 24. An interim dividend of €0.0133 per ordinary share was distributed on October 22, 2010.

Works on the €14 million investment in a new brewhouse and water treatment facility are underway and test brews are envisaged to commence in April 2012. When completed, this project will free up the façade of the brewery for eventual re-development in due course. Furthermore, the management is continually reviewing plans to address future production requirements, the company said.