Donegal Investment Group has reported profit after tax of €1.4m for the six months ending February 29, 2020, a fall of €1.2m on the previous year.
In a statement issued today, it said that the Group recognises “the challenging and unprecedented trading conditions resulting from the Covid-19 pandemic.”
And it added that “the trading performance in the second six months of the financial year ending 31 August 2020, primarily in speciality dairy business NOMADIC, will be materially impacted by reduced sales volume resulting directly from the impact of Covid-19 restrictions on the Food to Go category.”
The Letterkenny headquartered company has operations in Ireland,the U.K., Holland, France and Brazil, Donegal Investment group and continues to manage a diverse portfolio of companies to drive independent success through shared synergies wherever possible.
Its companies include IPM Potato Group, Ireland’s leading seed potato company, and the Nomadic Dairy Company, in Killygordon, makers of traditional small batch yogurts.
Donegal Investment Group own 22.4% of the North West Livestock Holdings and its property interests include Oatfield Sweets site in Letterkenny,
The Group's three key areas are:
Produce: Growth, sales and distribution of seed potatoes and organic produce.
Food-Agri: Manufacture, sale and distribution of dairy products and rental and sale of food-agri property assets.
Associates: Comprising investments in North Western Livestock Holdings.
Its seed potato business experienced good volume growth, but margins were reduced as a result of an increase in the level of supply into the wider market following better harvesting conditions.
The Group’s Produce and Dairy segment delivered a satisfactory performance during the first half of the year.
Group revenue increased by 9.6% (€2.6m) to €29.6m - driven by continued double-digit volume and revenue growth in its speciality dairy business as well as increased sales volumes in its produce seed potato businesses – with a segmental trading profit €2.4m, a decrease of €0.5m on the prior period.
The Group’s cash position, net of debt, was €13.0m at half year end compared to a net position of €2.7m at 28 February 2019.
The Group purchased 507,620 shares of the Company during the six months ended 29 February 2020 at a cost of €6.6m.
It currently has issued share capital of 4,760,807 with 1,165,626 of those shares held as treasury shares.Outlook
Prior to the outbreak of the Covid-19 pandemic, the Group was highly optimistic about the outcome for the full year ended 31 August 2020.
It said: “Our speciality dairy business had recently undertaken a significant capital expenditure programme which has doubled its manufacturing capacity and with continued volume growth being achieved during the first half of the year, it was expected that NOMADIC would have continued to deliver year on year growth in both revenue and profits for the full financial year.”
As noted in its trading update on March 30 2020, NOMADIC is now seeing significant reductions in its sales volumes directly related to the Covid-19 pandemic.
A material part of NOMADIC’s business is in the Food to Go category in the UK with its key customers having a presence in large urban centres as well as in high footfall transport hubs such as airports and rail stations.
The Board of Directors is currently reviewing options to convene an AGM over the coming months. The Board would favour the AGM taking place at a time which would allow its shareholders to attend as normal should the current restrictions be lifted.
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