Malta-based M&Z plc registered a profit before tax of €2.5 million during 2023, an increase of 13.4 per cent over the €2.2 million recorded in the previous year, despite mounting competition and cost of living pressures.
The results were published in the fast-moving consumer goods (FMCG) company’s Annual Report for the financial year ended 31st December 2023.
M&Z is a company that specialises in the global sourcing, importation, distribution, and marketing of products for the retail and catering industry. It has become one of the leading food companies in Malta, with food brands comprising a major part of its brand portfolio.
During the year, M&Z’s turnover amounted to €31.3 million, up by 10.3 per cent from 2022’s €28.4 million. This increase was primarily attributed to the company’s organic growth initiatives.
However, despite this increase, the company has also faced a number of challenges, particularly in terms of inflation and cost of living pressures, as well as increased competition within the FMCG sector, all elements which are expected to remain present in the coming months. Additionally, given M&Z’s portfolio is highly dominated by UK heritage brands, such as Flora, Bovril, and Sure, among others, the company has continued to face the ongoing cost of Brexit. Such products are subject to tariff charges, and given market pressures, it may not always be possible to “pass on all cost increases to the consumer.”
“We will continue in our efforts both with our suppliers and with the authorities to hopefully begin to minimise the effect that Brexit has had on our costs,” M&Z’s Directors stated.
In fact, cost of sales for the year amounted to €24.7 million, an increase of 9.3 per cent of 2022’s €22.6 million.
The company incurred €3.7 million in administrative expenses in 2023 (2022: €3.3 million), primarily due to an increase in the loss allowance in relation to trade receivables attributed to the challenges the local FMCG sector is facing. These include market saturation, the introduction of heavy discounters in the industry, high operating costs, and evolving consumer preferences, all factors which have “intensified the financial strain on the sector.”
Net finance costs amounted to €360,067 (2022: €257,061) which represents an increase of 40 per cent when compared to 2022, with this being a result of higher bank interest and charges due to higher interest rates.
During 2023, the company further diversified its revenue stream through the addition of pet care distribution to its portfolio of clients.
M&Z’s total asset base stands at €19.4 million (2022: €19 million), with current assets making up €15.2 million of that figure.
The Board of Directors recommended the payment of a final net dividend of €873,840, equivalent to €0.01986 per share. This is over and above the €396,000 interim net dividend that was paid to shareholders in August 2023. The final dividend is set to be paid by no later than 28th June 2024 to all shareholders who are on the shareholders’ register as of 21st May 2024.
Over the course of 2023, the FMCG sector has continued to encourage consolidation in the supply chain, and this trend is “expected to continue in the months to come.”
Looking ahead, while M&Z’s Directors acknowledge the prevailing uncertainties, they are still projecting a “moderate increase in revenues,” driven by strategic market positioning and continued innovation across its product offering.
“The company will continue working hard to enhance cost efficiencies through rigorous cost-saving initiatives,” the Directors added.
