Donegal Creameries has announced a 12.6 per cent rise in pre-tax profit to £2.3 million from £2 million in the six months to June 30th, 2000. The increase is primarily attributed to a first-time contribution from Carbury Mushrooms, offset to some extent by a reduction in profits in the company's potato operations due to the seasonal nature of that business.

The profit at the operating stage fell to £1.61 million from £1.64 million. Group sales rose to £38.9 million from £37.3 million. Earnings per share grew from 17.4p to 19.2p. The interim dividend is being increased by 16.7 per cent to 3.5p.

On the future, the company said it had experienced production problems at one of Carbury Mushroom's UK sites. This will involve part-closure of the site, leading to "substantial one-off costs in the second half". Nevertheless, it still remains confident of a "positive out-turn" in the second six months.