2022

Annual report and consolidated financial statements

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Part 1

Group Profile

AX Group is a diversified group of companies, that operates across multiple sectors, including construction, development, healthcare, real estate, hospitality and renewable energy. We are committed to challenging the status quo, setting new industry standards, and exceeding expectations in all that we do.

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Who we are

From our humble beginnings, AX Group has grown steadily over the past four decades to become one of Malta’s most respected diversified corporations. Our reputation for excellence is built on a legacy of delivering innovative, high-quality projects that consistently enhance the value of the core sectors in which we operate.

Our mission

At AX Group we strive to leverage our entrepreneurial skills to deliver high-quality innovative developments. This is achieved by inspiring our people to learn from our past, and to embrace the future with courage and optimism.

our Values

Our values form the foundation of everything we do. They guide our decision-making, shape our company culture, and inspire us to strive for excellence in all our endeavors.

Creativity

We harness the creativity and ingenuity of our people to develop new solutions, identify different lines of business, and pursue new opportunities to move the business forward.

Determination

We endeavour to create projects with exceptional quality that exceed client expectations. We seek to remain at the forefront of innovation to inspire growth and progress in the industries we operate in.

Integrity

We deliver on what we promise by operating on a level of transparency and trust. We act ethically in the interest of the environment and communities we work in.

chairman’s statement

icon-quote With great satisfaction, I am pleased to share with you the progress and notable achievements of the AX Group during 2022. icon-quote

In my report for 2021, I had stated that this year would be a very busy year. It is evident to both myself and the AX Group’s management team that this year has not only been characterized by a significant level of activity, but also by a great
deal of strategic focus.

Part 3

Financials

AX Group, with the full backing of the family and the Board of Directors, look ahead to new growth, and further investment in its core businesses with optimism.

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Revenue

60,000
45,000
30,000
15,000
0
FY 2018 56,466,680
FY 2019 51,916,749
FY 2020 28,715,967
FY 2021 35,418,160
FY 2022 38,269,722
€’000
  • Revenue (€’000)
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Ebitda

22,000
16,500
11,000
5,500
0
FY 2018 20,944,011
FY 2019 16,634,324
FY 2020 2,620,189
FY 2021 6,779,181
FY 2022 7,220,246
€’000
  • Ebitda (€’000)

SEGMENTED REVENUE

0%
25%
50%
75%
100%
2022
Construction works, building materials and management services 18%
Healthcare 16%
Rental income 4%
Hospitality and entertainment 59%
Sale of property and real estate 3%
Dividends receivable 0%
2021
Construction works, building materials and management services 18%
Healthcare 16%
Rental income 4%
Hospitality and entertainment 39%
Sale of property and real estate 23%
Dividends receivable 0%
2020
Construction works, building materials and management services 21%
Healthcare 20%
Rental income 4%
Hospitality and entertainment 52%
Sale of property and real estate 3%
Dividends receivable 0%
2019
Construction works, building materials and management services 9%
Healthcare 11%
Rental income 1%
Hospitality and entertainment 74%
Sale of property and real estate 0%
Dividends receivable 5%
2018
Construction works, building materials and management services 15%
Healthcare 8%
Rental income 1%
Hospitality and entertainment 70%
Sale of property and real estate 4%
Dividends receivable 2%
  • Construction works, building materials and management services
  • Healthcare
  • Rental income
  • Hospitality and entertainment
  • Sale of property and real estate
  • Dividends receivable

SEGMENTAL GROSS OPERATING PROFIT

0%
25%
50%
75%
100%
2022
Construction works, building materials and management services 9%
Real estate and rental income 1%
Retirement Residences and nursing home 18%
Hospitality and entertainment 72%
2021
Construction works, building materials and management services 4%
Real estate and rental income 43%
Retirement Residences and nursing home 12%
Hospitality and entertainment 41%
2020
Construction works, building materials and management services 10%
Real estate and rental income 17%
Retirement Residences and nursing home 15%
Hospitality and entertainment 58%
2019
Construction works, building materials and management services 3%
Real estate and rental income 2%
Retirement Residences and nursing home 6%
Hospitality and entertainment 89%
2018
Construction works, building materials and management services 4%
Real estate and rental income 11%
Retirement Residences and nursing home 1%
Hospitality and entertainment 84%
  • Construction works, building materials and management services
  • Real estate and rental income
  • Retirement Residences and nursing home
  • Hospitality and entertainment

TOTAL AND NET ASSETS

360,000
270,000
180,000
90,000
0
FY 2018 332,030,926 223,228,769
FY 2019 351,788,326 239,115,438
FY 2020 348,657,388 217,448,572
FY 2021 374,099,250 237,142,681
FY 2022 422,759,390 248,222,647
€’000
  • Total Assets (€’000)
  • Net Assets (€’000)

Key accounting ratios

Key Accounting Ratios
2018
2019
2020
2021
2022
Return on Equity
13.9%
1.9%
-3.6%
0.6%
-0.1%
Return on capital employed
6.9%
5.0%
0.8%
1.9%
1.8%
Net Debt/EBITDA
3.60x
5.02x
39.79x
11.24x
14.75X
Interest Cover
6.97x
5.55x
0.76x
1.69x
1.75x
Gearing
25.3%
26.0%
32.5%
31.0%
37.5%
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CEO Review

icon-quote 2022 was a year of significant change and despite various challenges, we look back positively at what we achieved during the year. icon-quote

Our Brands

Business Functions

Beyond the Business

ESG Alliance

AX Group continues to embed strategic ESG goals across all of its business divisions.

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Pink October Initiatives

In support of Pink October, AX Head Office staff raised funds for local NGO Europa Donna Malta.

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Clean Up for Earth Day 2022 

To celebrate Earth Day in April, AX employees gathered for a widespread initiative to clean up several prominent areas around Malta

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Dar San Nikola 

Throughout October and November, a renovation project was held in collaboration with Fondazzjoni Sebħ at Dar San Nikola, a children’s residential home in Ħamrun. 

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AX Foundation

Since its inception, the Foundation has proactively identified gaps in the support services to affect change on a national level and help young people living with disabilities.

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board of directors

Angelo Xuereb

Chairman

Michael Warrington

Director / Chief Executive Officer

Denise Xuereb

Executive Director Construction and Development

Claire Zammit Xuereb

Executive Director Hospitality and Care

John Soler

Independent Non-Executive Director

Josef Formosa Gauci

Independent Non-Executive Director

Christopher Paris

Independent Non-Executive Director

Edmond Zammit Laferla

Company Secretary

Executive Management team

Michael Warrington

Director / Chief Executive Officer

Denise Xuereb

Executive Director Construction and Development

Claire Zammit Xuereb

Executive Director Hospitality and Care

Albert Bonello

Chief Financial Officer

Dr. David Wain

Chief Legal Officer

Lawrence Degabriele

Head of Information Technology

Josephine Grima

Head of Human Resources

Kevin Callus

General Manager Sliema and Valletta hospitality properties

Jocelyn Cuomo

Head of Marketing & PR

Joseph Vella

General Manager Qawra hospitality properties

Caroline Schembri

Head of Administration

AX Investments Board of Directors

Angelo Xuereb

Chairman

Michael Warrington

Executive Director

Chev. Phillip Ransley

Independent Non-Executive Director

Dr. Patrick Galea

Independent Non-Executive Director

Josef Formosa Gauci

Independent Non-Executive Director

Dr. Ian Vella Galea

Company Secretary

A TRANSFORMATIVE YEAR

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The AX Hotels brand has carved a unique status for itself in the local market as a hotel and hospitality operator that caters to a wide range of diverse tastes. Across our seven hotel properties located in Valletta, Sliema, and Qawra, as well as our many highly distinguished food and beverage outlets, we specialise in offering distinctive journeys to exacting standards.

EMERGING STRONGER

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With the appointment of new director Claire Zammit Xuereb, the past year has seen AX Care strengthen the foundations of each of its sub-brands in order to pave the way for greater growth and add greater value to our clients.

RESILIENCE

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AX Construction has continued to expand its unique position in the local market owing to its proficiency and expertise in complex civil engineering projects, architectural restoration, turnkey solutions & finishes, and project management services.

INNOVATIVE DESIGN, UNPARALLELED QUALITY

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Comprised of a highly accomplished team of architects, engineers, draughtspersons, and designers, AX Development remains focused on seeking out new avenues for growth which enable the Group to plan and conceive valuable property projects with foresight.

DIVERSE IN TALENT, UNITED IN PURPOSE

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Responsible for all facets of recruitment and employee engagement
within the Group, AX Careers faced an unprecedented year marked by an
extensive brand refresh, high-volume recruitment drives, new local outreach
initiatives, and a revamping of internal employee benefit structures.

OUR RESPONSIBILITY TO FUTURE GENERATIONS

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At AX Group we remain committed to sustainability in all its forms, and we especially recognise the importance of renewable energy in preserving our planet for future generations.

TRANSPARENCY BUILDS TRUST

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At AX Group, we are committed to keeping all our investors
updated with the latest and most reliable information
about our various projects.

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Since the Business Transformation Department’s inception, the Group
has embarked on a digital transformation journey with the main aim of
re-evaluating and challenging current practices and using technology to
streamline and standardise internal processes.

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The pandemic caused turmoil in the cruise industry over the past two oyears, but Valletta Cruise Port saw a rebound in 2022, with over 500,000 passengers arriving. The company expects passenger numbers to exceed 740,000 in 2023, and is currently undergoing a significant investment in extending their keys to accommodate larger cruise ships.

A DIVERSIFIED PROPERTY PORTFOLIO

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Overseeing a portfolio of in-house investment properties valued in excess of €233 million, AX Real Estate p.l.c. is charged with leasing Group’s six hotel properties and retirement village in addition to several warehouses, commercial off ices, and residential apartments located in
highly sought-after areas around Malta, to related and third parties.