Simonds Farsons Cisk plc - Interim Results

Wednesday, September 25th, 2013

On 25 September, Simonds Farsons Cisk plc published its half-year financial results covering the six months ended 31 July 2013.

Performance Overview 

The Farsons Group registered a marginal improvement in its performance compared to the first six months of the previous financial year. The Directors attributed this improvement to a number of factors with turnover increasing  across all of its main operating business units. The Directors explained that the Group results have been positively impacted by the increased activity from the political activities organised in the run up to the general election, another record year in terms of tourist numbers as well as increased export volumes and turnover. These elements offset the adverse impact emanating from the intense competition and lower demand for carbonated soft drinks and water due to lower than average temperatures in July. Furthermore, the food importation arm lost representation of key brands following consolidation by a foreign principal.

During the first half of the 2013/14 financial year, the Farsons Group registered a 2.7% increase in revenue to a record €40.7 million. The ‘Brewing, production & sale of branded beers & beverages’ registered a 0.6% increase in revenue to €22.67 million. Larger growth was recorded in the other two main operating units with turnover from ‘Importation & Distribution of food & beverages’ rising by 5.1% to €12.5 million and income from the ‘Operation of franchised food retailing establishments’ up by 8.2% to €5.4 million.

Given the increased turnover, cost of sales also increased by 2.9% to €25.3 million. Nonetheless, the Group’s gross profit for the six months ended 31 July 2013 still grew by 2.6% to €15.3 million with the gross profit margin  unchanged at 37.7%.

Administrative expenses also increased by 2.7% to reach €10.5 million but operating profit improved by 2.3% to a record €4.8 million. Meanwhile, the operating profit margin remain unchanged at 11.9% once again reflecting the intense competition in the markets in which the Group operates. It is also noteworthy to highlight that most of this increase in operating profit is attributable to the improvement in the franchised food business (+37.4% to €0.36 million) and importation unit (+3.2% to €1.1 million) which offset the 1.2% decline in the operating profit of the brewing segment to €4.1 million.

Net interest payable amounted to €0.79 million representing a marginal increase over the €0.75 million accounted for during the previous comparable six months.

As a result, the Farsons Group registered a record pre-tax profit of €4.1 million representing a 1.7% increase over the pre-tax profit registered in the six months ended 31 July 2012. After accounting for a tax expense of €0.24 million, the Group’s net profit amounted to €3.8 million representing a 1.1% increase over the previous comparable figure.

The Statement of Financial Position shows a 6.9% increase in total assets since 31 January 2013 (the latest financial year end) to €162 million. Similarly, in the six month period under review, total liabilities grew by 14.5% to €68.2 million whilst total equity only increased by 2% to €93.8 million. On annualised basis, the Group’s return on equity amounts to 8.3% whilst the return on assets is just above the 5% level.


The Directors declared a net interim dividend of €0.0333 per share (€1 million) out of tax exempt profits to all shareholders as at the close of trading on 1 October. This dividend will subsequently be paid on 18 October. Although the declared dividend is substantially higher than the €0.0133 declared (€400,000) in respect of the previous interim period, the Directors explained that this is merely a process of balancing the interim and final dividend. As such, the increase should not be construed to mean that the Board will be recommending a higher aggregate dividend than last year. 


Looking ahead, the Directors expect competition to remain acute causing further pressures on volumes and margins. Efficiencies (through investment and innovation) and growth (through exports) have been identified as the key drivers to offset the adverse effect of competition. Nonetheless, the Directors acknowledged that increased efforts need to be made in this respect.

As part of the Group’s investment plans, works are currently underway in connection with the consideration and study of a new state of the art beer packaging hall designed to produce the requirements for the local market and added capacity to exploit export market opportunities. The Board will be evaluating this investment towards the end of the current financial year.

The Group is also committed to pursuing the redevelopment of the brewery façade into a Farsons Business Park. Further development possibilities are expected to be presented during the forthcoming Annual General Meeting.


Simonds Farsons Cisk plc – Interim Report as at 31 July 2013.

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