Agri group to scrap dividend
In a trading update, the group – formerly Donegal Creameries – said subject to requirements it would look to return capital to investors by way of “the more tax efficient form of a share buy-back programme.”
“The timing and scale of any share buybacks depend on the requirements of the company’s businesses, completion of our non-core asset disposal programme as well as the finalisation of the Monaghan Mushrooms legal case,” the company said.
The disposal programme is ongoing and while Monaghan Mushrooms’ majority owner is set to buy DIG’s 30% stake in the company, the conclusion of the deal is dependent on a revaluation of the stake’s worth.
Donegal has, for the past number of years, paid investors an annual dividend of around 16c per share. However, its last payment – for 2016 – was reduced to 5c per share. The group has changed its financial year to the 12 months to the end of August. It is due to publish its annual report (albeit for the eight months to the end of last August) next week and report interim figures for the six months to the end of February at the end of this month. Yesterday, it said that all of its business divisions are performing to plan.
However, while the food-agri and speciality dairy lines are on track, management warned that growth remains challenged by post-Brexit referendum trading conditions and the resulting impact on sterling.
