Donegal shares jump 8pc on the back of 'robust' results
Shares in Donegal Investment Group (DIG) jumped almost 8pc yesterday after the agri-services business reported a 61pc increase in operating profit to €3.1m in the 12 months to 31 August.
DIG - which has operations across Ireland, the UK, Holland, France and Brazil - reported revenue of €45.2m for the year, an increase of 11pc year on year.
Elsewhere, adjusted earnings per share increased by 61.9cent to 89.3cent.
The performance was driven by the company's speciality dairy division, which continued to experience double digit volume and sales growth in both the UK and Ireland.
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Its seed potato business "while constrained by weather related seed availability" experienced revenue growth through increased demand which generated improved trading margins, the company said in its annual results.
Geoffrey Vance, chairman of Donegal Investment Group, said the board was "very pleased" with the agriculture company's performance.
"The group will continue its strategic review to assess all options available to the group to maximise shareholder value, and shareholders will be updated at the appropriate time," he said.
In August the company completed the sale of its Robert Smyths and Sons animal feeds business. Proceeds from the sale were €16.7m.
DIG had a cash position, net of debt, of €21.3m at year end compared to a €100,000 net position last year.
Patrick Higgins, analyst at Goodbody Stockbrokers, described it as a "robust update."
However, looking forward he said that supply and demand dynamics "will likely normalise in the wider seed potato market which we suspect will lead to a tightening of margins for DIG's produce business".
The company, formally known as Donegal Creameries, evolved following the amalgamation of a number of Dairy Co-ops in Donegal.
In 1997 it floated on the stock market in Ireland.