Simonds Farsons Cisk plc - Full-Year Results

On 24 April, Simonds Farsons Cisk plc published its preliminary profit statement for the financial year ended 31 January 2013.

Performance Review

During the 2012/13 financial year, revenue of the Farsons Group grew by 8.9% to a record €77.2 million on the back of improved turnover across all four segments in which the Group operates. The Directors highlighted the growth in turnover in the importation of food and beverage division on the back of increased sales of spirits and energy drinks. This growth was attributed to the increase in tourism numbers on the Maltese Islands, the prolonged hot summer and the European football championships. In line with the increased demand for the Group’s products, cost of sales grew by 8.2% to €48.8 million leading to a gross profit of €28.4 million which in turn represents a 10.3% increase over the previous year’s comparable figure. Similarly the gross profit margin improved to 36.8% from 36.3% in the previous year.

Selling, distribution and administrative expenses increased by 5.5% to €20.4 million mainly reflecting higher impairment provisions on trade receivables in line with a more prudent Group-wide approach adopted in this respect. Nonetheless, operating profit still grew by 24.7% to just under €8 million and the operating profit margin reached a record 10.3%. Similarly, earnings before interest, tax depreciation and amortisation (EBITDA) was up 22.1% to €13.98 million with the EBITDA margin also improving to 18.1% from 16.2% in the previous financial year. The Directors noted that the ‘brewing, production and sale of beer and branded beverages’ registered the highest improvement in profitability as it was spearheaded by the performance of the Group’s own brands, Cisk and Kinnie. The franchise foods retail establishments also reported improved profits following higher turnover at all the three franchises operated by the Group.

After accounting for a net interest expense of €1.5 million, the Farsons Group registered a record pre-tax profit of €6.5 million representing a 27.6% increase over the previous year’s figure.

The tax expense amounted to €0.5 million compared to €0.4 million in the previous financial year leading to a net profit of just under €6 million which represents a 26.4% increase from the net profit registered during the financial year ended 31 January 2013. It is worth highlighting that the profitability registered during the period under review is only minimally below the record profit of €6 million of the financial year ended 31 January 2004 which was mainly influenced by a one-off €3.4 million tax credit.

The balance sheet as at 31 January 2013 shows total assets of €151.5 million (+2.5%) and shareholders’ funds of €91.9 million (+4.2%) which translates into a net asset value of €3.06 per share.

Outlook

The Directors explained that going forward the Group will continue to focus on further growth through more innovation and increased efforts on exports. Meanwhile, the Group will also undertake investments that should further strengthen its competitiveness largely through energy costs savings. Furthermore, the Group will also sustain its competitive advantage through continued change and investment to ensure that it remains in line with market developments and be able to take on new challenges and opportunities. In this respect, the recently completed brewhouse has already improved the competitive position of its beer production.

Dividend  

The Directors recommended a final net dividend of €0.07 per share representing a 31.3% increase from the previous year’s dividend. Shareholders as at the close of trading on 16 May will be entitled to this dividend which will be paid on 21 June 2013 subject to shareholder approval at the upcoming Annual General Meeting (AGM) scheduled to be held on 20 June.

Following the net interim dividend of €0.0133 per share paid in October 2012, the total net dividend for the financial year under review amounts to a record €0.0833 per share representing a 25% increase over the previous year’s dividend.

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Simonds Farsons Cisk plc – Preliminary Profit Statement for the financial year ended 31 January 2013