Simonds Farsons Cisk has registered an improved performance in its turnover as well as operational profitability across all its business segments.

It maintained its growth trend with group turnover increasing by 5% over the previous year to reach an all-time high of €99.8 million for the financial year ending January 31.

Farsons Group’s pre-tax profit, following the ‘spin off’ of Trident Estates in the previous financial year, reached €15.1 million - an increase of 10% from last year’s profit of €13.8 million.

Earnings before interest, tax, depreciation and amortisation (EBITDA) amounted to €23.2 million, an increase of 5% over last year.

The group’s net borrowings decreased by €6 million, resulting in a lower gearing ratio of 23.4% as compared to 28.8% in the previous year. Total equity of the group increased from €96.6 million to €108.3 million reflecting the profit generated, net of the dividends distributed during the year.

In spite of growing aggressive competition within the local beverage market, the company has registered growth in its locally produced products whilst also increasing its imported beer, spirits and wine portfolio in response to changing consumer preferences.

The group’s food importation business together with its franchised food business registered higher turnover resulting in improved contribution levels, despite on-going challenges on distribution costs.

Challenges ahead, notes CEO

Farsons group chief executive officer Norman Aquilina said that while such results were encouraging, the company would continue to face its fair share of challenges.

These included more aggressive competition across all business sectors, rapidly evolving consumer tastes and preferences, as well as environmental and health considerations and resultant legislative pressures.

There were also moral and business imperatives, Mr Aquilina said. A refund scheme for beverage containers - the Beverage Container Refund Scheme (BCRS) - is expected to come into force within a year and Farsons was fully aligned with the environmental objectives of the scheme, he said. 

The group believed that for the scheme to achieve its set objectives, effective enforcement across the board was an essential pre-requisite.

Commenting on the group’s performance, group chairman Louis A. Farrugia said innovation remained high on the group’s agenda.

Another growth pillar was internationalisation, with the group focused on further tapping a growing number of export markets.

For approval at the annual general meeting scheduled for June 24, the board is recommending a final dividend of €3 million (10c per share). Taken together with the net interim dividend of €1 million (3c33 per share) paid in October 2018, this will result in total dividends of €4 million being paid in respect of the year ended January 31.

This represented an increase of €400,000 (11%) over the dividends declared in the previous year.