Donegal Investment Group has reported a slight dip in profits in the six months to the end of February.
According to its interim results for the six months ended 28 February, Group revenue decreased by €2.2 million 'largely due to the reduction in the availability of seed potato following lower than expected yields across Europe during the 2017 seed crop harvest.'
Trading profits from the Group’s businesses decreased by €0.2 million to €3.2 million, with adjusted operating profit decreasing by €0.7 million for the period to €2.8 million.
"Our seed potato business whilst performing well in all key markets was impacted by the availability of seed as well as continued difficult trading conditions in its South American markets," the group said in a statement.
The report indicated that following on from the disposal of a number of non core assets including the Grianan Estate during the year ended 31 August 2017 and the Group’s interest in the Monaghan Middlebrook Mushrooms business in the period ended 28 February 2018, the Group’s financial position has changed significantly in the past 12 months which reflects the Group’s successful monetisation of assets which generated low returns on capital or were not within majority ownership or control of the Group.
The group reported an 'improvement' of €62.5 million in the past 12 months to a net cash position of €46.1m at 28 February 2018.
Return Of Capital
The Board is proposing to 'return up to €47.5m of capital to shareholders by way of a pro-rata conversion and redemption of up to 53.7% of all shareholders ordinary shares on the conversion record date of 17 May 2018 (6.00pm) if approved at the proposed EGM of 16 May 2018.'
"The Board has noted that the market has responded positively to the significant changes in the Group’s portfolio of assets in the last six months. Following our announcement of 16 February 2018 and if as expected shareholders approve the proposed return of capital this will result in further significant change. The Board recognises this and as such is undertaking a strategic review to assess all suitable options for the purpose of maximising long term shareholder value," said Geoffrey Vance, chairman, Donegal Investment Group.
"The Board is optimistic that all businesses will remain on plan for the remainder of the year and the Board will continue to progress its non-core asset disposal programme during the second half of the year, particularly in respect of its remaining property assets."
© 2018 Checkout – your source for the latest Irish retail news. Article by Donna Ahern. Click subscribe to sign up for the Checkout print edition.