Revenues rise 17% to €80.5 million at Donegal Creameries

MARK HILLIARD

Donegal Creameries has announced a return to profitability in its first full year since the disposal of its liquid milk and agri-food businesses in 2011.

The company has posted a pre-tax profit of €4.65 million for 2012. Revenues grew by 16.9 per cent to €80.5 million.

Results reflect the full integration of AJ Allan Seed Potato Group, acquired in November 2011, and Biogreen Limited, in January 2011.

There is now a “continued focus on strategic growth areas and in particular our seed potato business, with further progress made in 2012 in developing new markets and new varieties”.

With operations in Ireland, the UK, Holland and Brazil, Donegal Creameries operates across agri-inputs, produce, property and other investments.

Last year its animal-feeds business benefitted strongly from increased demand due to poor winter weather.

Conversely, those same conditions resulted in a significant impact on produce which despite growth in turnover of 5.2 per cent saw profits reduced from €3.4 million in 2011 to €0.94 million in 2012.

"In 2012 we set out on a path with a new business model following the strategic disposal of our liquid milk and agri-stores businesses," chairman Geoffrey Vance said in his financial statement.

“The board planned 2012 to be a year of consolidation to get our resources aligned around those businesses we planned to build and develop for the future.

“Our two acquisitions in 2011, AJ Allan and Biogreen Dairy have been integrated into our structure and will play an important role in the growth of our Produce and Food-Agri businesses going forward.”

The directors are recommending a final dividend of 9 cent per share which, if approved, will be paid in August. This will bring the total dividend per share to 16 cent, maintaining the 2011 payment.

Total bank debt reduced from €32.9 million to €21.7 million, further reduced by post year-end receipt of €2.5 million in contingent earn-out payments from the disposal of the Group's liquid milk and agri-stores business to Connacht Gold.

Regarding future markets, Managing Director Ian Ireland said that progress has been made in South America and sub-Saharan Africa.

“In the coming years we will increase our global footprint to include Asian and South African territories,” he said.