Simonds Farsons Cisk plc - Interim Results

On 4 October 2006 Simonds Farsons Cisk plc published its financial results for the six months ended 31 July 2006.

Commenting on the results, Group Chief Executive Mr. Louis Farrugia stated, “Given the poor tourist season these results are encouraging and put Farsons back on the right track. They have been achieved through increased sales during the summer months, helped by prevailing high temperatures.  We have also managed a reduction in our operating and administrative costs and lower interest costs due to better management of our working capital and funding costs.  Quintano Foods Limited once again is reporting a further improvement in turnover and profitability, while both Guido Vella Ltd and Vita Sana Srl registered improved results”.

During the six month period ended 31 July 2006, turnover of the Farsons Group increased by 2.9% to Lm13.96 million (2005: Lm13.57 million) mainly as a result of a 6.1% rise in turnover generated from brewing, production and sale of branded beers and beverages through increased sales during the key summer months and the elevated summer temperatures. On the other hand, revenue generated from the importation, wholesale and retail of food and beverages fell marginally by 1.6% to Lm3.9 million and a 2.5% fall to Lm1.5 million in the operation of franchised food retailing. Turnover generated from the property management segment improved marginally to Lm49,000 (2005: Lm43,000).

The gross profit of Farsons’ Group during the six months ended 31 July 2006 amounted to Lm3.4 million, representing a 2.9% rise over the first half of 2005. The Group generated an operating profit of Lm901,000 (46.5% higher than in the comparative period) as a result of a drop in operating and administrative costs. The Group’s operating margin increased to 6.5% from 4.5% in July 2005. The segmental analysis included in the half-yearly report reveals that the rise in operating profits is mainly attributable to a 32.4% increase generated from the brewing, production and sale of branded beers and beverages and a 14.9% rise in profits from the area of importation, wholesale and retail of food and beverages and wines segment. On the other hand, further losses were again generated from franchised food retailing and property management.

After accounting for fair value gains from investment property of Lm35,000 and a 13% reduction in interest payable, the Farsons Group generated a profit before tax of Lm590,000 in the six months to 31 July 2006 (2005: Lm248,000). Taxation and losses from discontinued operations of Lm64,000 resulted in a Group profit for the interim period of Lm467,000, significantly higher than the Lm187,000 generated in the comparative period. The earnings per share from continuing operations stands at 2c1 compared to 0c9 last year.

The consolidated balance sheet shows Group total assets of Lm37.8 million as at the end of July 2006. Shareholders’ funds of Lm15.6 million result in a book value per share of Lm0.61. In the first half of 2006 the Group achieved an annualised return on equity of 5.9% and an annualised return on assets of 3.1%.

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