‘Past year was predominantly marked by growing competitive pressures,’ says Farsons CEO

CEO Norman Aquilina has remarked that the past year has been characterised by increased competition within Farsons Group’s operating markets.

His comments came in the group’s Annual Report for the financial year ended 31st January 2024 (FY23-24), released on Wednesday. During FY23-24, Farsons Group’s revenue surged upwards by 12.4 per cent to €132.9 million (FY22-23: €118.2 million), driven by an improved performance in its beverage and food operating segments.

However, cost of sales was also on the rise, going up to €83.4 million (FY22-23: €74 million), while selling and distribution costs and administrative expenses stood at €14 million and €17.5 million, respectively. While much of this increase was related to volume growth, it was also impacted by higher employee costs and the first full year of costs for the start-up of The Brewhouse.

As a result, Farsons Group’s pre-tax profit amounted to €16.1 million, a 4.9 per cent increase from the €15.3 million reported in FY22-23.

Total assets as at the end of the reporting period amounted to €212.3 million, and the Board of Directors resolved to recommend the distribution of a final net dividend of €3,960,000, equivalent to €0.11 per ordinary share of €0.30.

In his review, Mr Aquilina noted that while there are growing concerns on climate change together with macroeconomic and geopolitical volatility, “this year saw no major hinderances to global trade.”

“On the local front, the year was predominantly marked by growing competitive pressures, a changing market landscape, and a generally challenging environment,” he added.

He affirmed that against this backdrop, Farsons Group “made significant progress” in sharpening its strategic positioning and in strengthening its culture, thus “delivering positive results.”

Mr Aquilina said that this was primarily done through continued investment in the group’s brands and capabilities, with the aim of holding on to its competitiveness.

While the approach prompted a minimal gross margin compression, he remarked that it also strategically helped Farsons Group hold on to its “competitive positioning” which in turn resulted in significant growth in group turnover.

“This progressive improvement of our volume-mix led by a strong commercial drive, is indeed encouraging,” he continued.

“The past few years have been extraordinary and challenging, temporarily calling for short-term focus. Going forward, we are now well set on further building on the positive momentum gained over the years, even if the trajectory is not short of challenges, particularly of a competitive nature,” Mr Aquilina stated.

He said that Farsons Group remains “well placed” and has “no problem in engaging with growing competitive pressures,” yet he called for authorities to “weed out both sprouting and rooted operators that continue to thrive on their ability to operate off both the fiscal and regulatory radars.”

“Good corporate citizenship is something we should all be promoting and not penalising due to inaction in ensuring a level playing field,” he stressed.

Mr Aquilina concluded by expressing gratitude to Farsons Group’s workforce, management, and the Board of Directors, specifically Chairman Louis A. Farrugia, who is marking his 50th year with the group. “He [Mr Farrugia] has been, and continues to be, a guiding light and his sense of vision and foresight are nothing short of remarkable,” Mr Aquilina affirmed.

Established in 1928, Farsons Group is engaged in the brewing, production, sale and distribution of branded beers and beverages, the importation, wholesale and retail of food and beverages, the operation of franchised food retailing establishments, as well as property development.