Pre-tax profits almost doubled at Dublin-listed Donegal Investment Group in the six months to the end of February, despite a decline in revenues.
The food group, which rebranded from Donegal Creameries in 2013, recorded profits of €2.3 million during the reporting period, as against €1.2 million a year earlier. Turnover fell by €3.5 million to €46.4 million, primarily as a result of the cessation of some trading activities in the group's AJ Allan business.
Donegal said while a significant portion of group revenue was sterling based, the negative impact in the currency following the Brexit vote had been largely offset by margin recovery and management of exposure.
The group, which operates across agri-inputs, produce, property and other investments, has operations in Ireland, the UK, Holland and Brazil.
The company recorded exception costs of €300,000 during the six-month period due to a legal case related to its stake in Monaghan Middlebrook Mushrooms, which is expected to be sold shortly.
Donegal began to reduce its stake in Monaghan Mushrooms in 2015 but has been involved in a court case over the valuation of the shareholding.
“The board is very satisfied with the first-half performance, with all businesses on or ahead of plan for the first six months of the year,” the company said.
“Our produce seed potato business is now benefitting from the initiatives introduced during 2015 and early 2016. Our food-agri businesses, and in particular our speciality dairy business, while continuing with further strong volume growth remained challenged by trading conditions post-Brexit as a result of the weakness in sterling,” it added.
The group’s net debt at the end of February stood at €16.4 million, a decrease of €1.6 million versus the same period a year earlier.
Donegal said that as the majority of sales generated by the group typically occur in the first half of its financial year, it expected this to represent a significant chunk of its full-year performance.
The company is making continued progress in respect of its non-core asset disposal programme with the sale of the Griann Estate under way.
“The board is optimistic that all businesses will remain on plan for the remainder of the year,” it said.
