By Geoff Percival
Speciality dairy business, Donegal Investment Group, is eyeing a number of strategic options, including taking the company private and selling further assets.
The company, formerly Donegal Creameries, yesterday reported a 12.5% fall in first-half pre-tax profits, to €2.8m, for the six months to the end of February, with revenue falling by €2.2m, to €44.2m.
The majority of Donegal’s sales are generated in the first half of the year, due to the seasonal nature of its seed-potato business.
However, the group has also proposed the return of up to €47.5m in cash to investors, by way of a share buyback programme. That cash became available from a number of asset sales, including the group’s 30% stake in Monaghan Mushrooms and its Grianan Estate landbank.
Shareholders are due to vote on that proposition at an EGM, directly following Donegal’s AGM on May 16.
“If, as expected, shareholders approve the proposed return of capital, this will result in further significant change. The board recognises this and, as such, is undertaking a strategic review to assess all suitable options for the purpose of maximising long-term shareholder value,” Donegal said in its interim-results presentation.
All options are on the table, including further asset sales and changing the group’s ownership structure and plc status.
Donegal’s shares fell over 1% yesterday. Investment firm, Pageant — which holds stakes in a number of companies, including Datalex and Providence Resources — upped its stake in Donegal to just under 7% at the beginning of this year.