An improvement in the performance of Donegal Investments Group plc’s seed potato business saw interim operating profits increase to €3.5m.

In a trading announcement this week for the six months to 28 February 2017, the group's seed potato business recorded a profit of €2.5m – an increase of €2m on the six months to 29 February 2016.

Group revenue decreased by €3.5m, with the majority of this reduction resulting from the cessation of certain potato trading activities in its AJ Allan business.

While a significant portion of the group’s revenue is sterling-based, the negative impact of the weakness in sterling post-Brexit has in the main been offset by margin recovery and the group’s management of its sterling exposure during the period.

Group ‘satisfied’ with first-half performance

The board of Donegal Investments Group has said it is very satisfied with the first-half performance, with all businesses on or ahead of plan for the first six months of the year.

The group's food-agri businesses and in particular its speciality dairy business, while continuing with further strong volume growth, remained challenged by trading conditions post-Brexit as a result of the weakness in sterling.

The group’s net debt at 28 February 2017 was €16.4m, a decrease of €1.6m on 29 February 2016.

The board is aware of speculation regarding the Grianan Estate and confirmed the sales process continues and an offer has been received which may or may not result in a completed sale.

Monaghan Mushrooms

Exceptional costs of €300,000 were recorded by the company for the period, which are related to the ongoing legal case with respect to the Group’s shareholding in Monaghan Middlebroook Mushrooms.

While the mushroom company is expected to be sold this year, Donegal Investments is involved in an ongoing legal case regarding the valuation of its shareholding in the company.