Dairy and agri-business divisions increase Donegal Creameries profits
Profits rose from €3.86 million to €3.47m as revenues increased by 6.6% to just over €61m.
The company said its dairy division increased its turnover by 16% to €27.5m, producing an operating profit of €1.84m (up from €735,000 in 2006).
“This was achieved from a combination of organic growth, added value dairy products and an upturn in global dairy commodity prices. The division continues to improve the performance in its branded added value business,” the company’s chairman Geoffrey Vance said.
At its agri-business division profits increased from €586,000 to €1.1m as turnover rose by 14% to €32.2m. Donegal said it had made good progress in its seed potato export arm.
Donegal Creameries’ property investment business made a profit of €916,000 at the interim stage down from €2.15m in 2006.
“The division continues to be very proactive in maximising future returns from the group’s property portfolio. At the interim stage the board are reporting an increase in the value of some of our financial assets and investment properties of around €6m since year end,” the company said.
Looking ahead to the rest of the year, Mr Vance said the global environment for dairy commodities remains positive and outlook for the seed potato business remains positive.
He added that the company was also looking to improve the property and investment division.
Goodbody Stockbrokers yesterday forecast that the company’s full year earnings will rise by 36% if there is an improvement in property sales.
“At the interim stage they were e1.4m less, though the sale of assets may well be back-loaded this year,” the broker said.
Earnings per share for the first half rose by 14% to 27.8 cents and shareholders will get an interim dividend of 6.5c a share, an increase of 8% on last year.
Donegal Creameries’ net debt fell by 18.4% in the first half to €8.4m.
