Simonds Farsons Cisk yesterday announced a pre-tax profit of €895,000 for 2008, down by some €3.2 million over the previous year.

Group turnover stood at €66,441,000, marginally up from the previous year but profits still slid from the €4,146,000 posted in 2007.

After tax, this year's results translate into a profit of €451,000, compared to €3,054,000 in 2007.

The soft drinks business suffered most because of the costs incurred in the changeover from the returnable bottle to PET and cans. During the year under review, the company opened a new €25 million soft drinks packaging hall and a logistics centre. The company incurred hefty one-off costs during the initial changeover period, such as big write-offs of old stock, poor productivity during the initial learning phase and impairment write downs on redundant machinery.

A large proportion of the costs are one offs.

Group CEO Louis A. Farrugia said: "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".

The company also attributed the results to increasing costs of raw materials, such as malt and hops, and competition from a flood of parallel traded products, at times illicit, following the liberalisation of the market.

The group has, however, succeeded in reducing its cost base employing 50 fewer full-time equivalent employees. This initiative is ongoing and will help the group return to acceptable levels of profitability.

The board of directors is recommending the general meeting to approve a total dividend of €1 million and the issue of one bonus share for every six held.

The AGM is set for June 25.