Donegal Investment : Stock Exchange Release 28.02.23 Final

DONEGAL INVESTMENT GROUP PLC

ANNOUNCEMENT OF RESULTS FOR THE 6 MONTHS ENDED 28 FEBRUARY 2023 8 June 2023

Donegal Investment Group plc ('DIG') ('Company') ('Group') reports its interim results for the 6 months ended 28 February 2023.

FINANCIAL PERFORMANCE

• The Group's seed potato business delivered a satisfactory trading performance for the period ended 28 February 2023. Revenue increased by 14% (€2.7m) to €21.4m - with market demand returning to pre-COVID 19 levels. The business delivered a trading profit €1.9m, an increase of €0.7m on the prior period.
• Shortages in hard currency in certain markets has resulted in slower than expected payments for seed sold in the 2022/23 season. This has led to an increase in trade and other receivable of €8.8m year on year resulting in a closing cash at bank position of -€3.3m. Significant payments have been received over the last two months with a closing cash at bank position of +€0.4m on 31 May 2023. It should also be noted that period end 28 February represent a peak point for the working capital requirements of the Group in any given year.
• Following the sale of its speciality dairy business Nomadic Dairy ("Nomadic") on 5 November 2021 the Group recognised contingent consideration receivable of €2.4m, dependent on the financial performance of Nomadic for the period 1 January 2022 to 31 December 2022, inclusive. Following receipt of full years financial performance of Nomadic we have recognised an additional €0.7m in contingent consideration bringing the total contingent consideration receivable by the Group to €3.1m.

6 months ended

28 February 2023

Continuing operations - pre exceptional

6 months ended

28 February 2022

Change

Revenue

Segmental Trading profit

Operating profit

Profit before tax

Profit after tax

Cash at bank (net of overdraft)

Net cash/(debt)

Investment property carrying value

Net asset value per share*

€'000

€'000

€'000

€'000

€'000

€'000

€'000

€'000

€'000

21,436

1,970

1,970

1,708

1,507

(3,268)

(3,952)

595

€10.68

18,740

1,242

1,415

1,451

1,274

4,053

3,356

1,590

€9.66

+€2.7m

+€0.7m

+€0.6m

+€0.3m

+€0.2m

-€7.3m

-€7.3m

-€1.0m

+€1.02

*Net assets are total equity attributable to equity holders of the Company

Enquiries:

Investors & Analysts

Padraic Lenehan

Director

Donegal Investment Group Plc

Tel: [phone]

Email:[e-mail]

Anthony Farrell

Davy Corporate Finance

Tel: + 353 1 679 6363

Email:[e-mail]

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H1 2022/23 Performance Review

The Board is pleased with the trading performance of our seed potato business in the first six months of the year. Volumes sold returned to more normalised levels following the end of Covid-19 restrictions whilst management were successful in recovering inflationary input costs increases, ensuring profit margins were not eroded.

Revenue increased by 14% (€2.7m) to €21.4m while segmental trading profit was €2.0m, an increase of €0.7m on the prior period. The majority of seed sales occur in the months of October to February and have a material impact on the bottom- line performance of the Group in any twelve-month period.

As detailed earlier, shortages of hard currencies in certain markets resulted in slower than expected payment for the seasons seed sales. Thankfully this short-term issue has been resolved and we expect full payment from these markets over the next four weeks. This issue has impacted the wider industry and we are working with our customers to put contingency plans in place to avoid this re-occurring.

Outlook

The board believes our seed potato business remains on plan for the full year ended 31 August 2023 with sales to all markets virtually complete at this time of year. IPM Potato Group continue to bring new innovative seed potato varieties to market, and the board are pleased with the performance of several new varieties which were launched over the last three years.

The board also expect to receive payment of €3.1m in contingent consideration following the sale of Nomadic before end of this fiscal year.

AGM

The Group's AGM will be held at The Colab ATU Donegal, Port Road, Letterkenny, Co Donegal, on Thursday, 13 July 2023 at 11:30am

Geoffrey Vance

Chairman

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Donegal Investment Group plc

Condensed consolidated statement of profit or loss and comprehensive income for the 6 months ended 28 February 2023

			Unaudited			Unaudited		Audited
				6 months			6 months	12 months
	Note			ended 28			ended 28	ended 31
				February			February	August
		Pre-	Note 10	2023	Pre-	Note 10	2022	2022
		Exceptional	Exceptional	Total	Exceptional	Exceptional	Total	Total
		€'000	€'000	€'000	€'000	€'000	€'000	€'000
Continuing operations
Revenue	4	21,436	-	21,436	18,740	-	18,740	25,220
Cost of sales		(13,531)	-	(13,531)	(11,848)	-	(11,848)	(16,816)
Gross profit		7,905	-	7,905	6,892	-	6,892	8,404
Other income	5	16	-	16	230	-	230	278
Other expense	6	(2)	-	(2)	-	-	-	(34)
Distribution expenses		(3,405)	-	(3,405)	(3,065)	-	(3,065)	(3,434)
Administrative expenses		(2,544)	-	(2,544)	(2,642)	(780)	(3,422)	(5,410)

Profit/(loss) from operating activities

Finance income

Finance expenses

Net finance income

Profit/(loss) before income tax Income tax (charge)/benefit

1,970	-	1,970	1,415	(780)	635	(196)
0	-	0	86	-	86	121
(262)	-	(262)	(50)	-	(50)	(79)
(262)	-	(262)	36	-	36	42
1,708	-	1,708	1,451	(780)	671	(154)
(201)	-	(201)	(177)	-	(177)	(66)

Profit for the period - continuing	4	1,507	-	1,507	1,274	(780)	494	(220)
operations
Profit for the year - from discontinued		-	731	731	358	13,108	13,466	13,478
operations, net of tax
Profit/(loss) for the year		1,507	731	2,238	1,632	12,328	13,960	13,258

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Donegal Investment Group plc
Condensed consolidated statement of profit or loss and comprehensive income (continued)
for the 6 months ended 28 February 2023
		Unaudited		Unaudited		Audited
6 months ended 28 February 2023	6 months ended 28 February 2022	12 months ended 31 August 2022
		Total		Total		Total
		€'000		€'000		€'000
Other comprehensive income
Items that are or may be reclassified to profit or loss
Foreign currency translation differences for foreign operations	53	38	(40)
Recycle of currency translation differences for foreign operations	-		-		-
Total comprehensive income for the period	2,291	13,998	13,218
Profit attributable to:
Equity holders of the Company	2,270	13,958	13,314
Non-controlling interest	(32)		2		(56)
		2,238	13,960	13,258
Profit attributable to:
Continuing operations	1,507	494	(220)
Discontinued operations	731		13,466		13,478
		2,238	13,960	13,258
Total comprehensive income attributable to:
Equity holders of the Company	2,288	13,990	13,257
Non-controlling interest	3		8		(39)
		2,291		13,998		13,218

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Donegal Investment Group plc
Condensed consolidated statement of profit or loss and comprehensive income (continued)
for the 6 months ended 28 February 2023
		Unaudited		Unaudited		Audited
		6 months		6 months		12 months
		ended 28		ended 28		ended 31
		February		February		August
		2023	2022	2022
		Total		Total		Total
Earnings per share	€'000		€'000		€'000
Basic earnings per share
(euro cent):
Continuing	101.09	20.64	(7.83)
Discontinued	48.01		489.95		635.25
		149.10	510.59	627.42
Diluted earnings per share (euro
cent):
Continuing	101.09	20.64	(7.83)
Discontinued	48.01		489.95		635.25
		149.10		510.59		627.42

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