Simonds Farsons Cisk plc on Tuesday reported profit before tax fell to €895,000 for the financial year ended January 31, down from €4.15 million in the previous year.

Group turnover amounted to €66.44 million, marginally up from the previous year.

The board has recommended that the annual general meeting of June 25 approves a dividend of €1 million and the issue of one bonus share for every six held.

The group's assets stood at €151.14 million (FY 2008: €154.1 million).

Profitability was mostly affected in its soft drinks business. Substantial costs were incurred in the changeover from the returnable bottle to PET and cans. The company last year also inaugurated a €25 million soft drinks packaging hall and a logistics centre.

The company incurred large one-off costs during the initial changeover period, such as large write offs of old stock, poor productivity during the initial learning phase, and impairment write downs on redundant machinery.

A large proportion of these costs are one-offs.

"When effecting changes as fundamental as the ones that Farsons has just undertaken, it is not unusual that the learning curve is steep and costly," group chief executive officer Louis Farrugia said.

Other factors contributed to the disappointing results, including substantial increases in costs of raw materials like malt and hops, and competition from a flood of parallel traded products, at times illicit, following the liberalisation of the market.

However, the group said it had succeeded in reducing its cost base by employing 50 less full-time equivalent employees. This initiative is ongoing and will help the group return to acceptable levels of profitability.