Donegal Creameries has reported a 44 per cent increase in pretax profits in the first half of the year, citing strong organic growth and a healthy dairy business.
Pretax profit was €4.5 million in the six months to the end of June, up from €3.2 million in the same period last year.
Revenue meanwhile increased 6.6 per cent, to €61.2 million.
Analysts welcomed the results, describing them as strong, and NCB analyst Paul Meade raised his full-year earnings forecast for the group by 30 per cent. He is now forecasting earnings per share (eps) of 53 cent for the full year. In the first half, eps came in at 27.8 cent, a 14.4 per cent increase over the prior period.
"Given the strength of dairy commodity markets, the general improving prospects for agri-business and the very strong performance from continuing operations, we see scope for a further significant increase in the group's earnings, especially as the benefits of the disposal of the non-core confectionary business emerge," Mr Meade said in a note. The improvement in the group's balance sheet has left it well-placed to make future acquisitions, he added.
Turnover in the dairy business increased by 16 per cent, to €27.5 million, thanks to a combination of organic growth, the addition of new dairy products and an upturn in global dairy commodity prices.
