Simonds Farsons Cisk : Approval of interim report and dividend 2023

COMPANY ANNOUNCEMENT

The following is a Company Announcement issued by Simonds Farsons Cisk p.l.c. (the "Company") pursuant to Chapter 5 of the Capital Market Rules as issued by the MFSA in accordance with the provisions of the Financial Markets Act (Chapter 345 of the Laws of Malta) as they may be amended from time to time.

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At a meeting held today 27th September 2023, the Board of Directors of the Company

approved the Group's unaudited financial statements and Interim Directors' Report for the

six months ended 31st July 2023.

A copy of these unaudited financial statements and Interim Directors' Report approved by the

Board of Directors on 27th September 2023 is attached herewith and is available to the public

onhttp://www.farsons.com/en/financial-statements.

The Board of Directors of the Company also resolved to distribute, out of tax-exempt profits, an interim dividend of €1,800,000 equivalent to €0.05 per ordinary share. This dividend will be paid on Wednesday, 18th October 2023 to the ordinary shareholders who will be on the Register of Members as at the close of business on Wednesday, 4th October 2023.

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Nadine Magro

Company Secretary

27th September 2023

Simonds Farsons Cisk plc

The Brewery, Mdina Road, Zone 2, Central Business District, Birkirkara CBD 2010, Malta

t [phone] f [phone] wwww.farsons.com

INTERIM REPORT

2022

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Simonds Farsons Cisk Plc

Interim Report SIX MONTHS ENDED

31 JULY 20232

SIMONDS FARSONS CISK PLC

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SIMONDS FARSONS CISK PLC

CONTENTS

Interim Report for the period ended 31 July 2023

03. INTERIM DIRECTORS' REPORT

05. CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

05. CONDENSED CONSOLIDATED INCOME STATEMENT

06. CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

06. CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

07. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

07. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

INTERIM REPORT

2023

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INTERIM DIRECTORS'

REPORT 31 JULY 2023

TRADING PERFORMANCE

The Board of Directors presents herewith the interim unaudited results of the Farsons Group for the six months ended 31 July 2023.

The first six months of the current financial year has seen a continuing growth in turnover across all business sectors. However (as was envisaged in the January 2023 Annual Report), at the same time the Group has witnessed sustained compression of margins resulting from a combination of the impact of higher input costs, a continuing tightness in the labour market (and accompanying wage inflation) as well as cost of living pressures on household budgets.

Group turnover for the six months was up 13.8% at €65.2 million (2022: €57.3 million). Profit before tax for the period amounted to €8.1 million (2022: €7.8 million) reflecting the pressure on margins referred to above. Turnover in the Franchised food operations was particularly strong, with an increase of 33% over the previous year. However, this sector is experiencing a significant change to its business model with a growing aggregator participation responding to higher delivery/take home demand. On the cost side the sector has seen higher than inflation input costs and real shortages in the labour market. Importation of food and beverages (including wines and spirits) has grown strongly with an increase in turnover of 13.3%, and a shift in sales amongst customer groups and sales mix has enabled margins to be maintained. Sales in the core brewing, production and sale of beers and branded beverages sector grew by 8.7%

in highly competitive market conditions along with ongoing concerns relating to illicit importation. This sector's results for the period have been impacted by the costs incurred during the initial start-up phases of the amenities housed in the Brewhouse.

In summary, whereas demand for the Group's products remains strong, assisted by a resurgent tourism sector - margin compression remains a challenge and a market reality. Management's focus has therefore been on

efficiency, innovation and cost containment measures. The Group is actively monitoring its operational procedures to control both production and administrative costs, with the goal of restoring margins. As was stated in the January 2023 Directors' Report, "market pressures are such that it is not possible (or indeed desirable) to pass on all increases to the consumer, where the higher cost of living is a reality that is driving choice."

Earnings per share attributable to shareholders improved by 7% from €0.195c in the first half of FY2023 to €0.209c in the comparative period of FY2024, based on the 36 million shares in issue.

INVESTMENTS

The Group celebrated a significant milestone in June 2023 with the inauguration of its latest major investment, the restoration of the former Farsons Old Brewhouse. The operational management of this substantial undertaking has been entrusted to a dedicated subsidiary, overseen by a committed and focused executive team.

This newly restored facility is a unique venue that not only serves as a functional operational space but also incorporates a Brewery Visitor Experience, offering a captivating journey through the storied history of the Farsons Group. All the food and beverage outlets and facilities within this venue are now open for business and have been receiving increasing patronage from both Malta's residents and visiting tourists alike. The expectation is that business levels in the Brewhouse amenities will ramp up gradually and will also benefit from the growing occupancy levels at Trident Park. Furthermore, the Brewhouse will support the standing and ongoing promotion of the Group's iconic brands.

With the successful completion of the major Old Brewhouse project, the Group is now turning its attention to addressing logistical and storage capacity constraints within its Beverages operations.

SIMONDS FARSONS CISK PLC

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In-depth studies have been undertaken to develop a fully automated returnable packages logistics facility within the existing footprint of the Mriehel production facility.

A planning application is currently in progress and this initiative represents another significant capital investment aimed at substantially improving the efficiency and cost-effectiveness of our Beverages operation. The Group is committed to enhancing its logistical capabilities to meet the growing demands of its beverage segment and ensure continued excellence in its services.

In addition to the ongoing projects, the Group has embarked on the planning process for a significant investment in the Foods sector. This endeavour involves the development of a new complex encompassing warehousing facilities, offices, and a state-of-the-art logistics center situated in Handaq, Qormi, utilizing land that already forms part of the Group's portfolio. The objective of this substantial investment is to furnish the food segment with specialized warehousing and logistics capabilities.

This infrastructure will play a pivotal role in enabling the segment to efficiently expand its existing portfolio and meet the growing demands of its operations.

BUSINESS OUTLOOK

The Group has demonstrated strong growth in turnover and a modest increase in profitability during the first six months of this financial year. As indicated above, the period was characterised by high demand that was accompanied by inflationary pressures, intensifying competition both domestically and internationally, a tight labour market, and ongoing pressures on consumer spending power. These factors are expected to continue shaping the commercial environment in which the Group operates through the second half of the financial year. Although supply chains are improving and inflation is moderating, the latter is doing so at an elevated level. Management's challenge is to respond positively to containing these cost pressures through enhanced operational and other efficiencies across all sectors, as well as responding positively to changing market demands by anticipating and adapting to evolving consumer preferences.

In this challenging environment, the Group's commitment to maintaining growth and delivering adequate profits to its shareholders is unwavering. The focus on adaptability and agility is key to navigating the complexities of the current economic landscape. The Board of Directors together with the management team, maintains a cautious yet optimistic outlook for the remainder of the current financial year.

DIVIDENDS

The Board of Directors, in light of the Group's sustained overall performance, has resolved to declare an interim dividend. This dividend, amounting to €0.05 per ordinary share, is equivalent to €1.8 million and will be distributed from tax-exempt profits. Shareholders who hold ordinary shares as of the close of business on Wednesday, 4 October 2023, will be eligible to receive this dividend. The distribution of the dividend is scheduled for Wednesday, 18 October 2023.

STATEMENT PURSUANT TO CAPITAL MARKETS RULE 5.75.3 ISSUED BY THE LISTING AUTHORITY

We hereby confirm that to the best of our knowledge:

The condensed interim financial information gives a true and fair view of the financial position of the Group as at 31 July 2023, and of its financial performance and cash flows for the period then ended, in accordance with International Financial Reporting Standards as adopted by the EU applicable to interim Financial reporting (IAS34); and

The Interim Directors' Report includes a fair review of the information required in terms of Capital Markets Rules 5.81 to 5.84.

Louis A. Farrugia	Marcantonio
	Stagno d'Alcontres
Chairman	Vice-Chairman
27 September 2023