Higher revenue, pre-tax loss at Donegal Creameries

IN A year when it sold its low-margin milk and agristores business, Donegal Creameries reported rising revenue but a pre-tax loss.

Following the disposal to Connacht Gold Co-Op, the company said it was now concentrating on growing several distinct and niche sectors.

“The disposal of our milk and stores businesses in 2011 was balanced by two important acquisitions – a controlling interest in Biogreen Limited, a niche yogurt business based in London, and the AJ Allan seed potato business, the Scottish-based grower and marketer of seed potatoes, which has significantly improved the group’s overall seed potato business,” said chairman Geoffrey Vance.

He added the company did not anticipate any major acquisitions or disposals in the current year.

Turnover from continuing operations increased by 13.6 per cent last year to €69.6 million, driven mainly by growth of 21.9 per cent in the produce division.

A smaller contribution from associate companies and finance costs dragged the company to a pre-tax loss of €3.18 million on continuing operations before exceptionals, compared with a like-for-like profit of €3.15 million in 2010.

The company said it had made further downward revaluations in its property holdings. These amounted to €6.7 million on group property holdings and €900,000 for its share in associates.

“The board has now valued the majority of development land within the group’s portfolio, as well as its share of associates’ development land, at agricultural values and therefore would not expect any further significant reductions in value going forward,” the company said in a statement.

Net debt increased from €23.2 million in 2010 to €32.9 million on the back of €4.5 million spent on acquisitions, and capital expenditure of €2.4 million.

However, following the completion of the disposals of the milk and agristores businesses, the company said borrowings had been reduced significantly and now stood just below €20 million.

It maintained its dividend payment per share at 16 cent.

“We’re still here, we’re very much a Donegal company, we are profitable, we employ 120 people in Donegal and we are growing,” managing director Ian Ireland added.