Availability of seed potatoes impact revenue at Donegal Investment Group
Donegal Investment Group, formerly Donegal Creameries, has seen its revenue decrease by €2.2m to €44.2m in the six months to February 28.
The decrease was largely due to the reduction in the availability of seed potato following lower than expected yields across Europe during the 2017 seed crop harvest, according to results from the company released today.
"Our seed potato business whilst performing well in all key markets was impacted by the availability of seed as well as continued difficult trading conditions in its South American markets," the company said.
However the net asset value per share increased by €2.22 per to share to €8.24 at 28 February, from €6.02 at 28 February 2017. The significant increase was primarily due to a €19.4m profit on disposal of the group's 30pc share in the Monaghan Middlebrook Mushrooms business.
Trading profits at the Dublin-listed company decreased by €0.2m to €3.2m, with adjusted operating profit decreasing by €0.7m for the period to €2.8m.
Following on from the disposal of a number of non-core assets including the Grianan Estate during the year ended 31 August 2017, and it interest in the Monaghan Middlebrook Mushrooms, the company said that its financial position "has changed significantly" in the past year, which it said reflects its successful monetisation of assets that generated low returns on capital or were not within majority ownership or control of the group.
The group, which has operations across Ireland, the UK, Holland, France and Brazil, saw its net cash increase to €46.1m at 28 February, following a negative cash position of €16.4m at the end of February 2016.
Meanwhile the board is to return up to €47.5m of capital to shareholders. Beneficiaries of the move will include about 1,900 farmers who have stakes in the firm.
Looking forwards and the group said that it noted that the market has responded positively to the significant changes in the group's portfolio of assets in the last six months.
The board said that it is optimistic that all businesses will remain on plan for the remainder of the year.
"The board will continue to progress its non-core asset disposal programme during the second half of the year, particularly in respect of its remaining property assets," Geoffrey Vance, chairman of Donegal Investment Group, said.