Creamery back in black

A restructuring of its core business helped Donegal Creameries return to profit last year.

The group — which re-positioned itself as a broad agri-services business via the sale of its liquid and trade milk and agri-stores businesses in 2011 — had earmarked 2012 as a year of consolidation.

Annual results, published yesterday, show that the Letterkenny-headquartered group posted pre-tax profits — before exceptional items — of €4.65m in 2012; up from a pre-exceptional/tax loss of €2.79m in 2011.

Exceptional charges amounted to €901,000 in 2011, boosting that year’s re-stated losses to just under €3.7m. The figures for 2012 show exceptional costs of just over €3m, resulting in a post-exceptional pre-tax profit of €1.63m.

Group revenue for 2012 increased by almost 17% to just over €80.5m and basic earnings per share of 14.19c were recorded, compared to a loss per share figure of 2.5c in 2011.

There was a strong €4.5m profit contribution from the Monaghan Middlebrook Mushrooms business, which Donegal partly owns, but adverse weather conditions saw profits drop from €3.4m to €940,000 in the group’s produce business, although the division saw revenue grow by over 5%.

The company has maintained its full-year dividend of 16c per share and said it managed to reduce its net debt by over €11m — from €32.9m to €21.7m — with a further reduction coming via a post year-end receipt of €2.5m in earn-out payments from the sale of assets to Connacht Gold.

Donegal’s shareholders will vote on the dividend at the group’s AGM in July. If approved, the payment will be made in August.

Management said the two 2011 acquisitions of London-based yoghurt business, Biogreen and Scottish-based potato producer, AJ Allan, have been fully integrated into the broader business and progress has been made in growing the group’s presence in South America and Africa.

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