Donegal Investment Group has reported €2m in half-year post-tax profits, up €900,000 versus 2014, despite a €100,000 dip in group revenue.
The Dublin-listed firm, which rebranded from Donegal Creameries in 2013, says an increase in revenue from its speciality dairy business was offset by the cessation of ware potato trading in its Donegal Potatoes business in 2014.
“The board is satisfied with the first-half performance,” said Donegal chairman Geoffrey Vance.
“The revenue of the group remained flat for the first six months of 2015 with operating profit increasing from €0.3m to €0.7m, reflecting in the main continued growth in our speciality dairy business.
“The board remains optimistic that our produce division should see continued recovery in bottom line performance and that our speciality dairy will, in the near term, continue to deliver double digit growth under its new Nomadic brand.”
An interim dividend of 7.0c per share will be paid on December 4 to shareholders.
Business analysts Davy said the group’s adjusted operating profit was €0.7m, up €0.3m on the first half of 2014. Davy is predicting a stronger second half of 2015.
Davy states: “Donegal notes trading in its key produce division remained tough but it expects improved market dynamics for seed potato markets in the second half; seed potato prices were severely impacted by the Russian trade embargo.
“Feed and dairy performed in line with expectations. Our full year forecasts call for profitability to rebound to 2013 levels. This will require improved pricing in the seed potato market in the second half and no further adverse events.”
Revenue in Donegal’s produce division was down by €1.2m to €12.3m, with a segmental loss of €0.5m before the positive impact of foreign exchange gains; the group gained from euro-sterling exchange. Donegal predicts markets will return to more normalised levels in the last quarter of 2015.
“The key determinant of performance in the second half, and for the year overall, will be the contribution from the produce division,” said Mr Vance.
“The board is optimistic the performance of the produce division will return to levels of profits more consistent with the business historically, as a result of expected improvements in market dynamics.”
The group’s net debt at June 30 was €13.9m a rise of €0.9m on June 2014.
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