UK and Turkey both raise interest rates to control economy

Both the UK and Turkey have announced increases in the rate of borrowing in moves to stabilise the economy but sparking British fears of a recession

The Bank of England raised borrowing costs by more than expected in a move which will hit borrowers hard and has sparked fears the British economy may be heading for recession.

The half-point increase is the bank’s 13th hike in a row and twice what economists predicted.

Figures on Wednesday showed UK inflation unexpectedly holding steady at 8.7 per cent, fuelling concerns over the outlook for prices after predictions for a modest decline to 8.4 per cent. 

Meanwhile, Turkey’s central bank has nearly doubled its main interest rate in a major reversal from the unconventional economic policies originally promoted by President Recep Tayyip Erdogan.

The bank hiked its key rate to 15 per cent from 8.5 per cent after it had promised to “simplify and improve” policies that past Erdogan governments used to try and weather Turkey’s worst economic crisis since the 1990s.

It added that this was only the start of a process aimed at bringing Turkey’s annual inflation rate of nearly 40 per cent to single figures “as soon as possible.”

Turkey’s annual inflation rate reached 85 per cent late last year and the central bank burned through most of its reserves trying to prop up the lira which was down 90 per cent against the dollar over 10 years.

Malta:

Malta’s revised €328m Recovery and Resilience Plan, including €69.9 million REPowerEU initiatives, approved by EC

Malta’s revised Recovery and Resilience Plan is one of the first updated plans approved by the European Commission in 2023.

Since the adoption of the Recovery and Resilience Plan in 2021, the European Commission launched its REPowerEU Plan, highlighting the need for European-wide action needed with respect to clean energy, energy security of support and storage.

Today, the European Commission endorsed Malta’s plans under the REPowerEU initiative which will aim to contribute towards supporting energy security of supply, through the strengthening and widening of the electricity grid and battery storage, as well as reforming the permitting process with a view to accelerate permitting timeframes and encourage the uptake of renewable energy.

Actions will be implemented through non-repayable financial support for REPowerEU, for a total amount of circa €69.9 million.

Malta’s economic GDP growth and thereby the positive economic performance led to the revision of this RRP. The revised plan retains its strong focus on green and digital initiatives with over 68% of funds dedicated to climate actions and over 26% earmarked for enhancing digital solutions. 

Parliamentary Secretary for European Funds Chris Bonett stated that “The approval of the revised RRP will enable Malta to strengthen its efforts in implementing important reforms and investments, including in the energy sector for the benefit of citizens and businesses alike. The swift approval of the plan is also indicative of the constructive collaboration between the European Commission, national authorities and local stakeholders on the use of EU Funds to shape Malta’s development over the next decade.”

Minister for the Economy, European Funds and Lands Silvio Schembri welcomed the approval by the Commission and urged businesses to grasp the opportunity and apply for funds to become more sustainable and resilient to future challenges while also contributing to the recovery and development of our country.

“This is a positive signal for various stakeholders, including businesses and the population at large whereby it demonstrates a commitment to address various challenges. But the success of such plans ultimately depends on the uptake of applicants,” Minister Schembri highlighted.

Within four weeks, the Council is required to endorse the Commission’s assessment allowing Malta to start claiming funding under the REPowerEU initiative. Since 2021, Malta has already received over €93 million in pre-financing and the first payment claim under the RRP.

Simonds Farsons Cisk plc generated a turnover of €118.2 million last year

Simonds Farsons Cisk plc held its 76th Annual General Meeting physically after three years of remote meetings. The Company welcomed its shareholders to the newly formed Trident Park Conference Hall. Louis A. Farrugia, Chairman of Farsons said that the Group returned to reasonable levels of profitability in the financial year ended 31 January 2023, following the challenging period of the Covid-19 pandemic.

Profit before tax of €15.3 million was achieved as the Group generated a turnover of €118.2 million, an increase of 28.8% over the previous year’s figure of €91.8 million.

The Group reported that after a decade of careful planning and preparation it was thrilled to open the newly refurbished ‘1950’ Brewhouse housing a number of food and beverage outlets as well as The Farsons Brewery Experience, illustrating a near century of history. The project has now transformed the non-productive space into a revenue-earning facility which is establishing itself as a landmark location.

Group Chief Executive Norman Aquilina said that despite the macro-economic turbulence, Farsons Group delivered on its financial projections and achieved solid growth with an operational profit margin of 14.1% through cost containment measures and revision of work practices. He reported focus and commitment on the Group ESG responsibilities with progress made on waste management, water usage, renewable energy, and emissions reduction. Despite the significant challenges, Farsons Group is building on the momentum of the latest financial results and is taking on the future with renewed ambition and confidence in its strategy. 

Further to the approval of the Financial Statements and Directors’ and Auditors’ Reports for the year ended 31 January 2023, PricewaterhouseCoopers were reconfirmed as the Company’s Auditors. The Remuneration Report for the year ended 31 January 2023 was approved by way of an advisory vote. The shareholders also approved the Board of Directors’ proposal for a dividend of €0.11 per ordinary share of €0.30, representing a final net dividend of €3,960,000 to be paid to the shareholders of the Company registered on its Register of Members as at close of trading on 25 May 2023. The Board of Directors was also reconfirmed.

 

Malta Company Announcements:

PG p.l.c

Shareholders as at close of trading on Monday 3^rd July 2023 will be entitled to receive a dividend of €0.41667 net, which is payable on Wednesday 12^th July to all shareholders.

Tigne’ Mall p.l.c

The Board of directors are recommending the payment of a final net dividend of €0.0136 per share. The final dividend is payable on 12^th July 2023 to all shareholders as at close of trading 20^th June 2023.

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