Frou-Frou aims for better performance

Alkis Hadjikyriakos Frou-Frou Biscuits Public Ltd., the island’s largest biscuit and cereals manufacturer reported a moderate increase in first half profit, which the company described as unsatisfactory, promising that corrective measures were being introduced to boost profits.

The company blamed a 7.5% increase in first half sales to CYP 5.97 mln as being mostly due to the slump in the retail sector as well as due to the chronic liquidity squeeze in the market, which despite the introduction of tougher laws on prompt settlement of overdue balances continues to face difficulties.

Increased competition, mostly from parallel importers played havoc with margins, with gross profit up 2.7% to CYP 2.6 mln with the margins declining to 43.66% from 45.7% before.

Other income was somehow better at CYP 91.500 as company received dividends on investments and after it booked more money from selling shares. While FBI managed to cut overall costs to CYP 669k from CYP 706k before, its sales and distribution costs increased to CYP 1.45 mln from CYP 1.3 mln.

Net profit was up by CYP 18.100 to CYP 489.555 in the first half of 2005 compared to CYP 471.455 a year ago. Earnings per share were up at 0.55 cent from 0.53 cent previously. Book value was marginally higher at 20.4 cent per share from 20 cent end of the year. In other timely statistics provided by the company, the number of debtor days fell to 80 from 84 previously, while an improvement was also noted in number of creditor days to 92 from 101. The more widely watched stock turnover days fell to 85 from 112 a year ago and 103 at the end of the year. The company’s own funds were CYP 2.6 mln from CYP 2.08 mln at the end of the year and more than sufficient to finance the construction of a brand new factory, adjacent to its central warehouse and offices in Kokinothrimithia.

The company forecast that its full year profits will be better than last year’s net profit that amounted to CYP 1.016.221 for an EPS of 1.13 cent per share.