Farsons group improves its financial results

by a staff reporter

The Farsons Group has registered an improvement in its financial performance for the year ending 31 January 2000. This was announced by the chairman of Simonds Farsons Cisk plc, Bryan A. Gera, during the company's 53rd annual general meeting held last week. The company reported a 5.7 per cent increase in turnover from Lm20.1m to over Lm21.2m, and an improvement in net profit before tax from Lm407,000 to Lm907,000 - an increase of 82 per cent.

"Our improved performance was the result of increased efficiency and a reduction in raw material prices," said Mr Gera. The group's operating profit has increased to Lm1.425m before net interest payable of Lm321,000. Profit before tax amounted to Lm1.054m.

Mr Gera referred to the fact that Farsons maintained the beer volumes which are locally brewed, while it has also increased its share of the imported sector mainly through significant increases in sales of Budweiser, Guinness and Becks.

During the year, Farsons redeemed the Lm1.2m 8.5 per cent preference shares from the company's operational cashflows. "Despite this repayment, we still managed to achieve a reduction in group borrowings from Lm8.87m to Lm8.13m. We expect this trend to continue and should enable us to embark in new capital investment in plant and machinery in our beer and soft drinks businesses in the near future," said Mr Gera.

In his address to shareholders, managing director Louis A. Farrugia gave an overview of the re-engineering of systems and processes which have resulted in an improved performance. New products, such as Breakers, Schweppes Tangerine, and Tetley's English Ale, were successfully launched, while the totally revamped Farsons website played a part in various brand promotions.

Regarding exports, Farsons has expanded its distribution in Australia to cover the five major cities with a strong Maltese-Australian community, namely Melbourne, Sydney, Adelaide, Brisbane, and Perth. In another interesting development, Mr Farrugia reported that Farsons has also established a business foothold for Kinnie in North Africa.

Referring to its fine wines and spirits importing subsidiary, Wands Limited, Mr Farrugia stated that its performance surpassed all targets, especially in the context of the fiercely competitive market in which it operates. As regards KFC, Burger King and Pizza Hut, the companies that make up Food Chain, a subsidiary company, the last financial year was one of further consolidation and development. The managing director described the Farsons Group as possessing unrivalled capabilities and resources in technical, human and marketing areas.

"Led by a strong entrepreneurial spirit, we are convinced that there is a sound potential for developing the business further," said Mr Farrugia. "Overall, we remain confident in our ability to forge a better future for the Farsons Group. We are also committed to shape events as leaders in the sectors in which we operate."

The annual general meeting approved an ordinary dividend of 1c5 per share of tax.