Annual Report 2016/17
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Simonds Farsons Cisk plc Annual Report 2016/17 FOR THE YEAR ENDED 31 JANUARY 2017 WorldReginfo - 12a91afc-4cb1-4554-b808-a67b354befe9 Farsons Group Brand Portfolio WorldReginfo - 12a91afc-4cb1-4554-b808-a67b354befe9 02 40 02. Chairman’s Statement 04. New Beer Packaging Facility Inauguration 06. Directors, Board Committees, 41 59 Group Executives & Senior Management 58 65 08. Group Chief Executive’s Review 38. Trident Estates 59. Statements of Financial Position 61. Income Statements/Statements of Comprehensive Income 41. Financial 63. Statements of Changes in Equity Statements 65. Statements of Cash Flows 42. Directors’ Report 45. Corporate Governance Statement 52. Remuneration Report 66 54. Independent Auditor’s Report 98 66. Notes to the Consolidated Financial Statements 97. Shareholder Information Simonds Farsons Cisk plc 98. Five Year Summarised Annual Report 2016/17 Group Results Contents WorldReginfo - 12a91afc-4cb1-4554-b808-a67b354befe9 Simonds Farsons Cisk plc 2 CHAIRMAN’S STATEMENT I AM PLEASED TO ONCE AGAIN REPORT programme, that includes the recently inaugurated Beer ANOTHER YEAR OF PROfiTABLE GROWTH Packaging Facility, as well as several other projects such FOR THE FARSONS GROUP. GROUP as the addition of 4,000 new pallet spaces to our logistics TURNOVER HAS REACHED A RECORD OF operation, the development of an additional 1,700 square ¤88,119,000, AN INCREASE OF 2.4% OVER metres of new and modern office space for all our office THE PREVIOUS fiNANciAL YEAR. GROUP employees, the addition of three new loading bays servicing PROfiT FOR THE YEAR FROM CONTINUING our logistics centre specifically designed to facilitate our OPERATIONS AMOUNTED TO ¤11,858,000, export and import operations, the investment in a new REPRESENTING AN INCREASE OF 8% kegging line and a new vehicle parking facility able to OVER LAST YEAR. GROUP PROfiT FOR accommodate our expanding truck fleet. All these projects THE YEAR INCLUDING THE PROfiT FROM are being undertaken concurrently and are being overseen DiscONTINUED OPERATIONS AMOUNTED by our own management teams. TO ¤12,132,000, AN INCREASE OF 8% FROM LAST YEAR’S RESULT OF ¤11,223,000. As I have previously reported to you over the last few years, our recent operational investments have all occurred to the As described within the Directors’ and Chief Executive’s south of the original brewery building. These investments report accompanying these audited results, this strong have allowed us to free up the 1950 building whilst we have performance has been achieved as a result of a series of been working on plans to convert the partly scheduled favourable factors namely, the growth of the economy, an building into a business park and the old Brewhouse into a improved beer portfolio that was possible thanks to the Farsons visitor’s centre including retail, office and catering investment in new beer products and packages, the sustained space. This Annual Report documents the images of this new management and staff efforts aimed at enhancing our major real estate development. operational productivity and efficiencies, and the improved performance of our food sector. This Annual Report highlights Over the years, the group has acquired a significant base of the results achieved across the group’s activities through the real estate. Although most of our real estate portfolio is utilised determined effort of all group employees led by a committed within the group’s core brewing and beverage operations, this management team whose primary focus has been to grow the portfolio also includes properties that offer clear scope for business mainly through innovation and export initiatives. re-development. On 14 June 2014, the company announced that the Board felt it appropriate to seek the implementation The successive good results achieved over the last few years of a ‘spin-off’ of these properties. Your Board is now seeking have allowed us to pursue an aggressive capital expenditure your approval, at the forthcoming Annual General Meeting, WorldReginfo - 12a91afc-4cb1-4554-b808-a67b354befe9 3 Annual Report 2016/17 to implement this proposal. The spin-off is intended to be DECLARED DIVIDENDS OVER effected by way of a distribution of the shares in Trident THE PAST FIVE YEARS Estates Ltd to the shareholders pro rata to the shares held by • PROFIT ATTRIBUTABLE TO SHAREHOLDERS them in Simonds Farsons Cisk plc at the time of issue of such • DIVIDENDS (INTERIM + FINAL) shares. In order for the financial implications of the spin-off to 14,000 3,500 3,400 be clearly understood, a circular containing the details of this 3,000 3,200 12,132 12,000 3,000 transaction is being included with this Annual Report. Trident 11,223 Estates Ltd intends to file an application with the Listing 10,000 2,500 Authority for admission to listing of its shares on the Malta 2,500 2,500 8,009 Stock Exchange, thus Trident Estates Ltd will become a public 8,000 2,000 limited company. If approved, the resolution will permit the 6,325 5,969 Board to take all the measures that it may deem necessary to 6,000 1,500 implement the said spin-off. 4,000 1,000 The list of properties forming part of the spin-off have 2,000 500 been revalued by a firm of professional architects to reflect current market values, and are included within the statement 0 0 FY–JAN 13 FY–JAN 14 FY–JAN 15 FY–JAN 16 FY–JAN 17 of financial position as at 31st January 2017. This revaluation has resulted in a surplus net of deferred tax of ¤4,666,000 credited to reserves and ¤375,000 to the profit for the year sharing their own valuable experiences whenever difficult in accordance with current accounting standards. decisions must be taken. The Board committees recently appointed, and particularly the Audit Committee, play an I would like to also emphasise the acceptable gearing ratio important function in the vital governance measures put in registered this year despite the heavy capital expenditure place by the Board. undertaken. The ratio stood at 22% at the year-end compared to 18% last year. Earnings before interest, taxation, I would also like to thank Norman Aquilina, our Group depreciation and amortisation (EBITDA) for the year reached CEO, together with all the members of the group’s senior ¤20,662,000, an increase of ¤1,982,000 over last year. As management, who are responsible for the delivery of these stated above, this strong cash flow generation has allowed impressive results. During these past years, I have been close us to approve a relatively intensive capital expenditure at hand attending to the day to day need of the business. programme. Your Board is now evaluating the current debt However, as part of the necessary process of succession structure for the group including the possibility to redeem the planning, I am striving to hand over more executive existing Bonds and issue new Bonds over the coming months. responsibilities over time. Given our performance, and also recognising the capital We have restructured the Group Executive Board, which expenditure programme currently under way, your Board I have regularly chaired, into a Senior Management Board is recommending the payment of a total dividend of under the direction of the CEO. I shall maintain regular ¤3,400,000, of which ¤1,000,000 has already been paid as contact with senior management and keep abreast of an interim dividend in October 2016. Your Board is naturally developments whilst at the same time fulfilling my role as pleased that the market capitalisation of the Farsons Group Chairman of the company. over the last five years has quadrupled in value. I wish to sincerely thank all Farsons Group employees for As I write this report, the market value of the group has their continued and relentless commitment and dedication, reached ¤223,200,000. We have always been prudent without which these results, would not have been possible. in our approach to investment and risk taking, and the Farsons Group has clearly based its business values on a I must now thank you, our shareholders, for your continued solid footing. We take pride in being a model, law abiding support throughout and for having confidence in the Farsons corporate entity and actively participate in community Group. We are about to enter a new phase in Farsons’ proud activities by supporting social, cultural and sporting history and I am confident that we shall continue to build the initiatives. The Farsons Foundation, chaired by our ex- company on even more solid ground. Chairman Mr Bryan Gera, has been very active with such support. Furthermore, our Business Park and old Brewhouse Also, once again our thanks and gratitude are due to project is sensitive to the heritage value of the brewery our legal advisors, Mamo TCV, as well as our auditors, building and consideration is being given in order to carefully PricewaterhouseCoopers, for their continued valid and preserve the artefacts together with the architectural and learned advice. historical value of the building. I pay tribute, and extend my gratitude, to my fellow colleague Board members who have always acted in the best Louis A. Farrugia Chairman interest of the group by tendering their wise counsel and also 4 May 2017 WorldReginfo - 12a91afc-4cb1-4554-b808-a67b354befe9 Simonds Farsons Cisk plc 4 NEW BEER PACKAGING FAciLITY INAUGURATION On 7 September 2016, during a memorable event presided by the Prime Minister of Malta, blessed by His Grace the Archbishop of Malta, and attended by the group’s principal partners, dignitaries and guests, the new Beer Packaging Facility was inaugurated. This important milestone heralded a new chapter in Farsons’ history. Mr Louis A. Farrugia unveils the new range Soprano Gillian Zammit entertains guests during the opening ceremony.