Simonds Farsons Cisk plc - Full-Year Results

On 15 May 2019, Simonds Farsons Cisk plc published its Annual Report & Financial Statements for the year ended 31 January 2019.

Performance Overview

During the period under review, Farsons registered a 5.1% increase (or +€4.82 million) in revenues to just under €100 million as the Group’s three operational segments posted improved results amid favourable dynamics of the local economy and despite the ever-increasing level of competition in the market. Furthermore, the growth was also supported by management initiatives aimed at creating efficiencies and enhanced productivity, as well as positive results achieved from the Group’s various investments in the production processes.

Total costs also increased by just over 5% (or +€4.15 million) to €84.5 million, largely reflecting the growth in the business as well as the upward pressure on specific expenditure such as HR. Nonetheless, operating profits still increased by 4.6% to €15.3 million (FY2017/18: €14.7 million). Excluding depreciation and amortisation, EBITDA grew by 5% to €23.2 million whilst the EBITDA margin climbed to just above 23%. The EBITDA is also 3.6% higher than previously anticipated in the Financial Analysis Summary dated 16 July 2018. Meanwhile, net finance costs increased marginally to €1.24 million compared to €1.21 million in the previous comparable period.

Overall, Farsons reported a near 5% growth in pre-tax profits to €14.1 million (FY2017/18: €13.5 million). After taking into account a tax credit of €1.04 million, the Group posted yet another record net profit of €15.1 million which, in turn, is 5% higher than the net profit from continuing operations registered in the previous financial year. The return on equity also improved to just under 15% compared to 12.5% in the 2017/18 financial year.

The Statement of Financial Position shows a 4.6% increase in total assets to nearly €171 million, largely reflecting higher deferred tax assets, inventories and cash balances. Conversely, total liabilities contracted by 6.2% to €62.7 million as Farsons reduced its total amount of borrowings by 5% (or -€2.14 million) to €40.7 million, and also reduced its amount of trade and other payables by 9.5% to €19.5 million. As a result, total shareholders funds’ grew by 12% to €108.3 million compared to €96.6 million as at the end of January 2018. Moreover, in view of the increase in the Group’s capital base, coupled with the reduction in debt as well as the growth in profitability, the gearing ratio slipped to 27.3% whilst the net debt to EBITDA multiple improved to 1.5 times.

Dividend

The Directors of Farsons are recommending a final net dividend (paid out of tax exempt profits) of €0.10 per share, representing a 15.4% increase over the final net dividend paid out in respect of the previous financial year (€0.0867 per share). The dividend will be paid on 25 June 2019 to all shareholders as at close of trading on 22 May 2019 and subject to shareholders’ approval at the upcoming Annual General Meeting scheduled to be held on 24 June 2019.

Coupled with the unchanged interim dividend of €0.0333 per share paid out in October 2018, the total net dividend declared in respect of the 2018/19 financial year amounts to €0.1333 per share, representing an 11.1% increase over the total net dividend distributed in the previous comparable period (€0.12 per share).

Investments

The Directors’ Report explains that during the 2018/19 financial year, Farsons invested a further €6.6 million to complement the major plant investments carried out in previous years. Furthermore, a new packaging plant for the filling of kegs and returnable water bottles was commissioned whilst additional investments were undertaken on the PET and packaging lines. Farsons also completed an extension to the existing logistics warehouse and also commissioned a new truck depot. Meanwhile, works on the restoration and rehabilitation of the Farsons Old Brewhouse are gathering speed and this project is now scheduled to be completed in Q1 2021.

Outlook

Looking ahead, Farsons noted that it will continue to build on its two growth pillars – namely innovation and internationalisation. As such, the Group expressed its cautious optimism that it will continue to deliver positive results but changing trends in tourism and visitor spend patterns require careful attention. Moreover, legislative changes implementing the Beverage Container Refund Scheme necessitate that the Group retains its competitive edge by focusing on product development, ensuring high levels of efficiency while also enhancing its export drive in order to further sustain the positive trend in profit growth reported over the past years.

Download

Simonds Farsons Cisk plc – Annual Report & Financial Statements for the year ended 31 January 2019.