Simonds Farsons Cisk plc - Full-Year Results

On 18 May 2023, Simonds Farsons Cisk plc published its Annual Report & Financial Statements for the year ended 31 January 2023.

Performance Overview

Revenues surged by 28.8% to a record of €118.2 million (FY2021/22: €91.8 million) which, in turn, is 14.2% higher than the record of €103.5 million posted in the 2019/20 financial year prior to the outbreak of the pandemic. Indeed, the Group generated a record level of income from each business segment. Revenue from ‘Brewing, production and sale of branded beers and beverages’ was 27.4% higher than the previous financial year and amounted to €63.1 million (representing 53.3% of total revenues). Moreover, sales generated by the ‘Importation, wholesale and retail of food and beverages’ segment climbed by 26% to €33.4 million while revenues at the ‘Operation of franchised food retailing establishments’ segment increased by 38.2% to €21.8 million.

On the expenditure side, total costs increased by 29.7% to €101.6 million reflecting higher costs in view of the increased level of business as well as higher administrative expenses. In this respect, Farsons explained that during the year the Group experienced significant inflationary pressures across international supply chains as well as increased salary costs amid severe shortages of skilled employees.

Given the sharper increase in revenues than costs in absolute terms, operating profit increased by 24.1% to €16.7 million (FY2021/22: €13.4 million, FY2019/20: €13.7 million). However, the operating profit margin eased to 14.1% from 14.7% in the previous financial year, albeit it remained higher than the 13.2% level achieved in FY2019/20. Excluding depreciation and amortisation charges, EBITDA increased by 16.5% to a record of €26.4 million and corresponds to a margin of 22.4% (FY2021/22: 24.7%, FY2019/20: 21.9%).

After accounting for finance costs of €1.37 million, Farsons reported a record profit before tax of €15.3 million compared to €12.2 million in the 2021/22 financial year. After taking into account a tax credit of €0.15 million, the Group posted a net profit of €15.4 million which translates into a return on average equity of 11.5% (FY2021/22: 10.0%).

The Statement of Financial Position shows a 7% increase in total assets to €215 million, largely reflecting the increases in trade and other receivables (+€7.4 million), property, plant, and equipment (+ €3.3 million), and inventories (+€ 7.5 million) which offset the reduction in cash balances (-€5.8 million). Total liabilities increased by 5.8% to €75.9 million as the marginal reduction in total debt to €33.4 million (when including lease liabilities amounting to €8.7 million) was offset by the increase in trade and other payables (+€5.4 million). As a result, the equity base of Farsons expanded by 7.7% to €139.2 million.

Dividend

Following the net interim dividend of €0.045 per share paid in October 2022, the Directors of Farsons resolved to recommend an additional final net dividend out of tax-exempt profits of €0.11 per share. The dividend will be paid on 16 June 2023 to shareholders as at close of trading on Tuesday 23 May 2023, subject to approval at the upcoming AGM to be held on Thursday 15 June 2022. The total dividend for the 2022/23 financial year thus equates to €0.155 per share.

Investments

The Chairman noted that The Brewhouse Project is completed and all the various outlets are open for business. Mr Louis A. Farrugia explained that this line of business is being run by its own management structure and is expected to result in a profitable business in the years ahead.

Meanwhile, the Chairman remarked that the Board is actively considering a number of projects that will keep the Group ahead in business in the future, including the construction of an automated returnable packages logistics facility and a new warehouse and logistics centre for the food business.

Strategic Review

The Board of Directors also announced that they are carrying out a strategic review of opportunities for the further expansion of the Group’s foods business and considering the potential structuring of the enlarged food operations in a separate listed entity.