Farsons registers pre-tax profits of €6.9 million, up 5.7%

The Farsons group registered another year of steady and profitable growth, with net profit before tax amounted to €6.9 million, an increase of 5.7% over the €6.5 million achieved last year.

Group turnover reached a record figure of €78.6 million, an increase of 1.9% over the previous year.

Group performance was influenced by a stable economic environment, another record year of tourist arrivals and the campaigning activities in the beginning of the year in the run-up to the general election held in March 2013.

Beer and water revenues exceeded the previous year’s figures, whereas soft drink volumes were flat. Exports of locally produced beverages increased further and now represent 6% of local production.  Importation of beers, wines, spirits and non-alcoholic beverages registered further impressive results.

The food importation business faced another challenging year. Market dynamics continue to affect performance as private label categories are prompting the need for new strategies.

The franchised food business registered another successful year with improved turnover and profitability. Performance at Burger King and KFC surpassed expectations.

The gross profit of €27.7 million for the group is on a par with last year, while the overhead costs compare favourably with last year. This resulted in an improved profit for the year of €356,000. The group’s statement of financial position remains strong and the net asset base continued to improve by over €3.3 million to reach €95.3 million (2013: €91.9 million).

Shareholders’ funds finance 63% (2013: 61%) of the group’s total assets, while EBITDA (earnings before interest, tax, depreciation and amortisation) stands at €14.2 million, an improvement of €267,000 over last year.

Farsons said that while the market environment in which the group operates within remains extremely competitive, a €27 million investment in a state-of-the-art beer packaging hall and its strong brand portfolio would lead to further development of its export business, to become a regional beverage producer supplying external markets such as Italy and North Africa.

“The excavation and construction works for this project have now commenced, and it is envisaged that the investment will be completed by April 2016. The board believes that the beverage importation arm has further potential to grow in the ‘take home’ and on-the-go channels, and shall continue to further consolidate its leading position in this sector,” Farsons said.

New Burger King drive-thru • Farsons Business Park

Farsons said that food importation continues to face considerable challenges.

“The franchised food outlets are experiencing growth, and it is believed that the local market can absorb an additional number of outlets in strategically located positions. The group will be opening its first Burger King drive thru this summer which will further strengthen the brand’s standing in the local market.”

Farsons said the summer World Cup event is one of several important factors which will influence the group's business performance.

Detailed studies on the ‘Farsons Business Park’ project have been carried out and an international firm of architects has been appointed to propose a masterplan. “Once this plan is complete, the board will, in due course, be presenting the options available to the shareholders for their consideration.”

Directors have recommended for approval at the AGM, out of tax exempt profits, a final net dividend of €1,500,000 that is €0.05 per ordinary share of €0.30, to be paid by not later than 19 June.

An interim net dividend of €1,000,000 that is €0.0333 per ordinary share was approved at the Board Meeting held on 25 September 2013 and distributed on 4 October 2013. Therefore, the total net dividend to the ordinary shareholders relating to the financial year ended 31st January 2014 amounts to €2,500,000 that is €0.0833 per ordinary share.