Farsons registers positive results – challenging tight labour market and enforcement issues

The Farsons Group reported sound growth and a profitable performance for the six months ending 31 July, with increases in turnover and profits in all segments when compared to the same period last year.

Whilst Group turnover exceeded €49 million, representing an increase of 7.5% over the comparative period last year, profit for the period from continuing operations after taxation amounted to €5.7 million, and exceeded last year’s figure by 3.9%. Net profit margins have been compressed by extremely competitive market conditions and a very tight labour market.

In reviewing the performance of the Group’s business, Farsons Group Chief Executive Norman Aquilina said: “that the results are encouraging and reflect the efficiencies gained through the investments made by the Group”.

Nevertheless, he stated that “the challenges of operating in a relatively small economy are constant, and in order to achieve growth through other channels, the Group remains committed to ongoing innovation and further internationalising its business through exports.”

He further emphasized that “the ongoing national debate on waste management will present challenges which need to be addressed by all. What is now needed is effective enforcement which is visible and operative in order to ensure a level playing field for all. The current enforcement measures are far from ideal, thus creating disparity between operators. Any new measures intended to control packaging waste should not further aggravate the disparity caused by inadequate enforcement of regulations.”

Investment in the logistics centre is nearing completion. Simultaneously the investment in the administrative office block has reached its final stages. The new kegging plant is expected to be commissioned by the end of this financial year.

The Group’s Chairman, Louis A. Farrugia endorsed Mr Aquilina’s cautionary comments whilst noting with satisfaction the results achieved. He also stated that at the Annual General Meeting held on 27 June, the shareholders had approved the spin-off of the company’s shareholding in Trident Estates Limited.

He added that “following this approval, the necessary formalities for the transfer of the properties, the allotment of shares to existing Farsons shareholders, and the listing of the Trident Estates shares on the Malta Stock Exchange are all at an advanced stage, and are expected to be completed by the end of this year.”

The board of directors recommended an interim dividend of €1 million, similar to last year, and equivalent to €0.0333 per share. Such dividend will be paid on 18 October to those registered ordinary shareholders as at 4 October.