Simonds Farsons Cisk plc - Updated Financial Analysis Summary

On 24 July 2024, Simonds Farsons Cisk plc published an updated Financial Analysis Summary. The main highlights of the projected financial performance and position of Farsons for the 2024/25 financial year are as follows:

  • Revenues are expected to increase by 6.5% to a record of €141.5 million amid higher level of business across all business lines. In particular, revenue from the ‘Brewing, production importation and sale of beer & branded beverages’ is set to increase by 3.6% to €99.2 million whilst revenue from ‘Importation, wholesale of food & Operation of franchised food establishments’ is set to surge by 14.0% to €42.3 million.
  • EBITDA is anticipated to climb by 8.8% to an all-time high of €30.3 million (2023/24: € 27.9 million). In this respect, the EBITDA margin is anticipated to improve to 21.4% compared to 21.0% last year.
  • Net Finance costs are anticipated to decline by 28.6% to €0.93 million from €1.30 million last year as the outstanding bank loans at variable rates will be repaid in full by the end of the year. As such, the interest cover is anticipated to improve further to 32.6 times compared to 21.6 times in the previous financial year.
  • Total debt is projected to increase by 31.2% (or €8.9 million) to €37.2 million, when including €5.8 million in lease liabilities. The increase in debt relates to the drawdown of bank overdraft facilities which will be used to fund the construction of a new logistics centre and office block for the food business in Ħandaq as well as an automated returnable container facility for beverages in Mrieħel. The two major projects will involve a combined capital investment in excess of €30 million over two and a half years.
  • The gearing ratio (calculated as total debt divided by total debt plus equity) is anticipated to climb to 18.9% from 16.0% as at the end of January 2024. When accounting for the anticipated cash balance of €2.9 million as at 31 January 2025, the net debt is forecasted to amount to €34.3 million which translates into a net debt-to-EBITDA multiple of 1.1 times (31 January 2024: 0.7 times)
  • The financial analysis summary also included a reference to considerations for spinning off the food business into a separate listed entity. A proposal could be tabled before shareholders in the current financial year.