Simonds Farsons Cisk plc - Full-Year Results
On 29 April, Simonds Farsons Cisk plc published its preliminary statement of results for the financial year ended 31 January 2015.
Performance Overview
During the financial year under review, the Farsons Group registered yet another record revenue figure of €79.2 million representing a 1.1% increase over the previous year’s comparable figure. The growth in turnover is attributable to improved domestic consumption, record tourist arrivals and expenditure, a positive performance by the Group’s key beverage brands, new product launches as well as encouraging growth in the Group’s franchised food retailing business especially following the opening of a new Burger King drive-thru restaurant in July 2014.
On the expenditure side, the Group registered a 1.9% drop in cost of sales to €49.7 million reflecting overhead cost containment and significant reductions in raw material prices. This led to a gross profit figure of €29.5 million, up 6.6% from the previous year’s comparable figure with the gross profit margin similarly improving by 1.93 percentage points to 37.25%.
Meanwhile, selling, distribution, administrative and other operating expenses increased by 2.9% to €19.8 million. Nonetheless, operating profit still improved by 15.2% to €9.7 million with the operating profit margin rising by 1.5 percentage points to 12.2%. Excluding the depreciation charge from the above figures, the Group’s earnings before interest, tax, depreciation and amortisation (EBITDA) amounted to €15.9 million representing a 12% improvement over the previous year’s figure.
After accounting for net finance costs of €1.46 million (FY Jan 2014: €1.54 million), the Group’s pre-tax profit from continuing operations amounted to a record €8.2 million. The Group recognised a €5.2 million tax credit, largely reflecting the recognition of further deferred tax credits, as opposed to a tax charge of €0.36 million in the previous financial year. As a result, the Group’s net profit from continuing operations for the twelve months ended 31 January 2015 amounted to €13.45 million compared to €6.5 million in previous financial year.
During the past financial year the Board has confirmed its intent to hive off the property interests from the other business activities and eventually spin-off this segment into a separate and distinct public company. As a result, the assets and liabilities of the aforementioned property interests have been reclassified as held for sale and its result reclassified as a discontinued operation. The results of this segment for the financial year under review are a loss of €5.4 million (compared to a loss of €0.18 million in the previous financial year) largely reflecting the downward adjustment of €5.2 million (net of deferred tax) to the property values to reflect a number of changes, including the scheduling of the brewery façade by MEPA, since the last property revaluation back in 2007.
Overall, the net profit for the year under review amounted to just over €8 million representing a 26.6% increase over the previous year’s comparable figure.
The Statement of Financial Position shows a 1.2% drop in total assets to €148.76 million which was offset by a 12.2% decrease in total liabilities to €48.5 million leading to an overall 5.2% increase in total equity to €100.235. This translates into a net asset value per share of €3.34 (FY Jan 2014: €3.18).
Dividend
The Directors recommended a final dividend (out of tax exempt profits) of €0.0666 per share representing a 33.2% increase over the final dividend previous financial year. This dividend will be paid on 26 June 2015 to all shareholders as at the close of trading on 25 May subject to shareholder approval at the upcoming Annual General Meeting scheduled to be held on 25 June.
Coupled with the interim dividend of €0.0333 per share, the total net dividend declared in respect of the financial year ended 31 January 2015 amounted to €0.0999 per share representing a 19.9% increase over the previous year’s dividend.
Farsons Business Park
A company announcement will be issued in this respect before the forthcoming Annual General Meeting.
Outlook
Looking ahead, the Directors noted that the market within which the Group operates remains highly competitive with constant pressures on volumes and margins. As such, the Group will maintain it focus on attaining further efficiency improvements through planned investment, product innovation, application of technology, cost containment, review of internal processes and exports growth with the ultimate aim of growing the local and international business in order to establish the Group as a regional player within the food and beverage sector.
The development of the new €27 million beer packaging facility is progressing on schedule and expected to be completed by April 2016. The completion of this investment shall strengthen the Group further and enable it to penetrate the targeted overseas markets more aggressively.
Furthermore, the franchised food business shall expand further through the opening of two new restaurants by the end of the current financial year. Meanwhile, an action plan is currently in place in order to improve the performance of the food importation arm which continues to face intense competition.