DONEGAL INVESTMENT GROUP PLC
ANNOUNCEMENT OF RESULTS FOR THE 6 MONTHS ENDED 29 FEBRUARY 2020
30 April 2020
Donegal Investment Group plc ('DIG') ('Company') ('Group') reports its interim results for the 6 months ended 29 February 2020.
FINANCIAL PERFORMANCE
· 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 our speciality dairy business as well as increased sales volumes in our produce seed potato businesses - with segmental trading profit €2.4m, a decrease of €0.5m on the prior period.
· Whilst our seed potato business experienced good volume growth during the first half of the year, margins reduced as a result of an increase in the level of supply into the wider market following better harvesting conditions. This was the key reason for the reduction of €0.5m in segmental trading profit, offsetting the growth in speciality dairy.
· Speciality dairy, which trades under the NOMADIC brand, continued to deliver to management expectation with double digit growth in a competitive marketplace.
· Profit after tax from continuing operations was €1.4m a decrease of €1.2m on the prior year.
· Basic EPS from continuing operations decreased by 20.8c to 34.3c.
FINANCIAL POSITION
· 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.
RETURN OF CAPITAL
· The Group purchased 507,620 shares of the Company during the six months ended 29 February 2020 at a cost of €6.6m. The Group currently has issued share capital of 4,760,807 with 1,165,626 of those shares held as treasury shares.
COVID 19
· The Group recognises the challenging and unprecedented trading conditions resulting from the Covid-19 pandemic. 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.
|
|
|
6 months ended 29 February 2020 |
6 months ended 28 February 2019* |
Change |
| Continuing operations - pre-exceptional |
|
|
|
|
| Segmental Trading profit |
€'000 |
2,385 |
2,916 |
-€0.5m |
| Profit before tax - continuing operations |
€'000 |
1,569 |
2,935 |
-€1.4m |
| Continuing operations |
|
|
|
|
| Revenue - continuing operations |
€'000 |
29,641 |
27,042 |
€2.6m |
| Operating profit |
€'000 |
1,506 |
2,827 |
-€1.3m |
| Profit after tax |
€'000 |
1,383 |
2,543 |
-€1.2m |
| Basic earnings per share |
Cent |
34.3c |
55.1c |
-20.8c |
| Cash at bank (net of overdraft) |
€'000 |
13,806 |
7,381 |
+€6.4m |
| Net cash/(debt) |
€'000 |
13,003 |
2,672 |
€10.3m |
| Investment property carrying value |
€'000 |
2,510 |
2,480 |
+€0.03m |
| Net asset value per share** |
€'000 |
€7.37 |
€7.76 |
-€0.39 |
* As restated to reflect the effect of presentation of certain activities as discontinued operations
**Net assets are total equity attributable to equity holders of the Company
Enquiries:
| Investors & Analysts Ian Ireland Managing Director Donegal Investment Group Plc Tel: 074 9121766 |
Media Paddy Hughes Drury Tel: 01 2605000 or 087 6167811 Email: paddyhughes@drury.ie
|
H1 2019/20 Performance Review
The Board is pleased with the first half performance of all businesses, with our produce seed potato business delivering a strong performance driven by increased sales volumes, while our speciality dairy business continued to deliver double digit revenue/volume growth.
Produce and Dairy
Group revenue increased by 9.6% (€2.6m) to €29.6m while segmental trading profit was €2.4m, a decrease of €0.5m on the prior period.
As anticipated yields of harvested crops for the 2019/2020 season were higher when compared to 2018. This resulted in our seed potato business delivering an improved sales performance with volumes 4% ahead of the prior year, but with margins tightening due to the increased level of supply in the wider market.
NOMADIC continued to deliver double digit volume and revenue growth becoming the number 1 yogurt brand in UK (GB&NI) Convenience and Impulse channel, overtaking Muller for the first time which is a significant milestone in NOMADIC's recent history.
Finance
The Group's financial position remains very strong with cash at bank (net of overdraft) of €13.8m at half year end. The Group's outstanding term debt of €4m was fully repaid in September 2019. Remaining loans and borrowing at 29 February 2020, relate primarily to the capitalised value of operating lease obligations under IFRS 16 (see note 5) as well as existing finance leases.
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. 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 our trading update on the 30 March 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 impact of UK and Irish Governments' policy restricting travel and movement has greatly reduced footfall in retail Food to Go channels. Whilst there is significant uncertainty surrounding the length of the current crisis the Group would still anticipate that together with the benefit of the first half's strong financial performance and potential mitigating actions that can be taken, that NOMADIC will make a positive, albeit significantly lower than 2019, contribution to full year Group financial performance and year-end cash position.
Our produce seed potato business to date is not significantly impacted by the ongoing restrictions being imposed worldwide. Our existing seed potato varieties are primarily focused on the table/ware potato sector which we anticipate remaining buoyant for the foreseeable future. We are committed to the ongoing development and marketing of new innovative seed potato varieties, with several new varieties due for release over the course of the year.
Relative to the scale of its operations and in particular it's aforementioned trading businesses the Group remains in a strongly capitalised position which includes significant levels of cash liquidity, with cash at bank (net of overdraft) of €13.8m at 29 February 2020.
The Group will continue to review all options available to ensure we continue to maximise long-term shareholder value.
AGM
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 our shareholders to attend as normal should the current restrictions be lifted.
Geoffrey Vance
Chairman
Donegal Investment Group plc
Condensed consolidated statement of profit or loss and comprehensive income
for the 6 months ended 29 February 2020
|
|
|
|
Unaudited |
|
|
Unaudited |
|
|
Audited |
|
|
|
|
Note |
Pre-Exceptional €'000 |
Note 11 Exceptional €'000 |
6 months ended 29 February 2020 Total €'000 |
Pre-Exceptional €'000 |
Note 11 Exceptional €'000 |
6 months ended 28 February 2019 Total* €'000 |
Pre-Exceptional €'000 |
Note 11 Exceptional €'000 |
12 months ended 31 August 2019 Total €'000 |
|
| Continuing operations |
|
|
|
|
|
|
|
|
|
|
|
| Revenue |
6 |
29,641 |
- |
29,641 |
27,042 |
- |
27,042 |
45,229 |
- |
45,229 |
|
| Cost of sales |
|
(18,840) |
- |
(18,840) |
(16,915) |
- |
(16,915) |
(28,845) |
- |
(28,845) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gross profit |
|
10,801 |
- |
10,801 |
10,127 |
- |
10,127 |
16,384 |
- |
16,384 |
|
| Other income |
|
78 |
- |
78 |
65 |
- |
65 |
110 |
- |
110 |
|
| Distribution expenses |
|
(4,034) |
- |
(4,034) |
(3,273) |
- |
(3,273) |
(4,621) |
- |
(4,621) |
|
| Administrative expenses |
|
(5,339) |
- |
(5,339) |
(4,003) |
(89) |
(4,092) |
(8,431) |
245 |
(8,186) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Profit/(loss) from operating activities |
|
1,506 |
- |
1,506 |
2,916 |
(89) |
2,827 |
3,442 |
245 |
3,687 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Finance income |
|
63 |
- |
63 |
83 |
- |
83 |
5 |
- |
5 |
|
| Finance expenses |
|
- |
- |
- |
(64) |
- |
(64) |
(266) |
(814) |
(1,080) |
|
| Net finance income/(expense) |
|
63 |
- |
63 |
19 |
- |
19 |
(261) |
(814) |
(1,075) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Profit/(loss) before income tax |
|
1,569 |
- |
1,569 |
2,935 |
(89) |
2,846 |
3,181 |
(569) |
2,612 |
|
| Income tax charge |
|
(186) |
- |
(186) |
(303) |
- |
(303) |
859 |
- |
859 |
|
|
Profit/(loss) for the period |
6 |
1,383 |
|
|
2,632 |
(89) |
2,543 |
4,040 |
(569) |
3,471 |
|
|
Profit/(loss) for the period - discontinued operations |
|
- |
|
|
990 |
- |
990 |
1,054 |
(30) |
1,024 |
|
|
Profit/(loss) for the period |
|
|
- |
1,383 |
3,622 |
(89) |
3,533 |
5,094 |
(599) |
4,495 |
|
|
* As restated to reflect the effect of presentation of certain activities as discontinued operations in 2019 |
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Donegal Investment Group plc Condensed consolidated statement of profit or loss and comprehensive income for the 6 months ended 29 February 2020 |
|
|
|
|
|
|
|||||
|
|
|
Unaudited |
Unaudited |
Audited |
|||||||
|
|
|
6 months ended 29 February 2020 Total €'000 |
6 months ended 28 February 2019 Total €'000 |
12 months ended 31 August 2019 Total €'000 |
|||||||
| Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
| Items that are or may be reclassified to profit or loss Foreign currency translation differences for foreign operations |
|
79 |
|
|
105 |
|
|
(29) |
|||
| Recycle of currency translation differences for foreign operations |
|
- |
|
|
- |
|
|
818 |
|||
| Total comprehensive income for the period |
|
1,462 |
|
|
3,638 |
|
|
5,284 |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Profit attributable to: |
|
|
|
|
|
|
|
|
|
|
|
| Equity holders of the Company |
|
|
|
1,319 |
|
|
3,477 |
|
|
4,222 |
|
| Non-controlling interest |
|
|
|
64 |
|
|
56 |
|
|
273 |
|
|
|
|
|
|
1,383 |
|
|
3,533 |
|
|
4,495 |
|
| Profit attributable to: |
|
|
|
|
|
|
|
|
|
|
|
| Continuing operations |
|
|
|
1,383 |
|
|
2,543 |
|
|
3,471 |
|
| Discontinued operations |
|
|
|
- |
|
|
990 |
|
|
1,024 |
|
|
|
|
|
|
1,383 |
|
|
3,533 |
|
|
4,495 |
|
| Total comprehensive income attributable to: |
|
|
|
|
|
|
|
|
|||
| Equity holders of the Company |
|
|
|
1,398 |
|
|
3,581 |
|
|
5,010 |
|
| Non-controlling interest |
|
|
|
64 |
|
|
57 |
|
|
274 |
|
|
|
|
|
|
1,462 |
|
|
3,638 |
|
|
5,284 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Donegal Investment Group plc Condensed consolidated statement of profit or loss and comprehensive income for the 6 months ended 29 February 2020 |
|
|
|
|
|
||||||
|
|
|
|
|
Unaudited |
|
|
Unaudited |
|
|
Audited |
|
|
Earnings/(loss) per share |
|
|
|
6 months ended 29 February 2020 Total €'000 |
|
|
6 months ended 28 February 2019 Total €'000 |
|
|
12 months ended 31 August 2019 Total €'000 |
|
| Basic earnings/(loss) per share (euro cent): Continuing |
|
|
|
34.34 |
|
|
55.13 |
|
|
76.63 |
|
| Discontinued |
|
|
|
- |
|
|
21.95 |
|
|
24.54 |
|
|
|
|
|
|
34.34 |
|
|
77.08 |
|
|
101.17 |
|
| Diluted earnings/(loss) per share (euro cent): Continuing |
|
|
|
33.12 |
|
|
52.76 |
|
|
74.18 |
|
| Discontinued |
|
|
|
- |
|
|
21.00 |
|
|
23.76 |
|
|
|
|
|
|
33.12 |
|
|
73.76 |
|
|
97.94 |
|
Donegal Investment Group plc
Condensed consolidated statement of financial position
As at 29 February 2020
|
|
|
Unaudited |
|
Unaudited |
|
Audited |
|
|
Note |
29 February 2020 €'000 |
|
28 February 2019 €'000 |
|
31 August 2019 €'000 |
| Assets |
|
|
|
|
|
|
| Property, plant and equipment |
9 |
6,562 |
|
8,694 |
|
3,158 |
| Investment property |
10 |
2,510 |
|
2,480 |
|
2,510 |
| Goodwill |
|
2,324 |
|
3,324 |
|
2,324 |
| Intangible assets |
|
288 |
|
321 |
|
301 |
| Investment in associates |
|
259 |
|
256 |
|
257 |
| Other investments |
|
747 |
|
9 |
|
591 |
| Total non-current assets |
|
12,690 |
|
15,084 |
|
9,141 |
|
|
|
|
|
|
|
|
| Inventories |
|
1,689 |
|
5,049 |
|
2,085 |
| Trade and other receivables |
|
12,063 |
|
27,419 |
|
10,239 |
| Cash at bank |
|
13,878 |
|
10,805 |
|
25,735 |
| Deferred tax asset Current financial instrument |
|
904 - |
|
- - |
|
958 - |
|
|
|
|
|
|
|
|
| Total current assets |
|
28,534 |
|
43,273 |
|
39,017 |
|
|
|
|
|
|
|
|
| Total assets |
|
41,224 |
|
58,357 |
|
48,158 |
|
|
|
|
|
|
|
|
| Equity |
|
|
|
|
|
|
| Share capital |
|
619 |
|
705 |
|
619 |
| Share premium |
|
2,975 |
|
2,975 |
|
2,975 |
| Other reserves |
|
(10,597) |
|
(7,476) |
|
(4,067) |
| Retained earnings |
|
35,315 |
|
36,145 |
|
33,996 |
| Total equity attributable to equity holders of the Company |
|
28,312 |
|
32,349 |
|
33,523 |
| Non-controlling interest |
|
872 |
|
621 |
|
838 |
| Total equity |
|
29,184 |
|
32,970 |
|
34,361 |
|
|
|
|
|
|
|
|
| Liabilities |
|
|
|
|
|
|
| Loans and borrowings |
|
563 |
|
4,657 |
|
41 |
| Deferred income |
|
273 |
|
309 |
|
300 |
| Deferred tax liabilities |
|
- |
|
588 |
|
- |
| Total non-current liabilities |
|
836 |
|
5,554 |
|
341 |
|
Loans and borrowings |
|
241 |
|
52 |
|
4,020 |
| Trade and other payables |
|
10,697 |
|
15,682 |
|
8,799 |
| Bank overdraft |
|
72 |
|
3,424 |
|
408 |
| Current financial instrument |
|
60 |
|
176 |
|
47 |
| Current tax |
|
134 |
|
499 |
|
182 |
|
|
|
|
|
|
|
|
| Total current liabilities |
|
11,204 |
|
19,833 |
|
13,456 |
|
|
|
|
|
|
|
|
| Total liabilities |
|
12,040 |
|
25,387 |
|
13,797 |
|
|
|
|
|
|
|
|
| Total equity and liabilities |
|
41,224 |
|
58,357 |
|
48,158 |
Donegal Investment Group plc
Condensed consolidated statement of changes in equity
for the 6 months ended 29 February 2020
|
|
Share capital €'000 |
Other un- denominated capital €'000 |
Share premium €'000 |
Trans- lation reserve €'000 |
Reserve for own shares €'000 |
Reval- uation reserves €'000 |
Fair value reserve €'000 |
Share option reserve €'000 |
Retained earnings €'000 |
Total €'000 |
Non- controlling interest €'000 |
Total equity €'000 |
| Balance at 1 September 2019 |
619 |
718 |
2,975 |
(1,911) |
(6,539) |
3,382 |
- |
283 |
33,996 |
33,523 |
838 |
34,361 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total comprehensive income for the period |
|
|
|
|
|
|
|
|
|
|
|
|
| Profit for the period |
- |
- |
- |
- |
- |
- |
- |
- |
1,319 |
1,319 |
64 |
1,383 |
| Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
| Foreign currency translation differences for foreign operations |
- |
- |
- |
74 |
- |
- |
- |
- |
- |
74 |
5 |
79 |
| Acquisition of non-controlling interest |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
| Other comprehensive income |
- |
- |
- |
74 |
- |
- |
- |
- |
- |
74 |
5 |
79 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total comprehensive income for the period |
- |
- |
- |
74 |
- |
- |
- |
- |
1,319 |
1,393 |
69 |
1,462 |
| Transactions with owners recorded directly in equity |
|
|
|
|
|
|
|
|
|
|
|
|
| Contributions by and distributions to owners |
|
|
|
|
|
|
|
|
|
|
|
|
| Acquisition of treasury shares |
- |
- |
- |
- |
(6,604) |
- |
- |
- |
- |
(6,604) |
- |
(6,604) |
| Dividend to equity holders |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(35) |
(35) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total contributions by and distributions to owners |
- |
- |
- |
- |
(6,604) |
- |
- |
- |
- |
(6,604) |
(35) |
(6,639) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance at 29 February 2020 |
619 |
718 |
2,975 |
(1,837) |
(13,143) |
3,382 |
- |
283 |
35,315 |
28,312 |
872 |
29,184 |
Donegal Investment Group plc
Condensed consolidated statement of changes in equity
for the 6 months ended 28 February 2019
|
|
Share capital €'000 |
Other un- denominated capital €'000 |
Share premium €'000 |
Trans- lation reserve €'000 |
Reserve for own shares €'000 |
Reval- uation reserves €'000 |
Fair value reserve €'000 |
Share option reserve €'000 |
Retained earnings €'000 |
Total €'000 |
Non- controlling interest €'000 |
Total equity €'000 |
|
| Balance at 1 September 2018 |
705 |
632 |
2,975 |
(2,699) |
(9,018) |
3,382 |
- |
283 |
32,228 |
28,488 |
1,173 |
29,661 |
|
|
Total comprehensive income for the period |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Profit for the period |
- |
- |
- |
- |
- |
- |
- |
- |
3,477 |
3,477 |
56 |
3,533 |
|
| Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Foreign currency translation differences for foreign operations |
- |
- |
- |
104 |
- |
- |
- |
- |
- |
104 |
1 |
105 |
|
| Acquisition of non-controlling interest |
- |
- |
- |
- |
- |
- |
- |
- |
440 |
440 |
(575) |
(135) |
|
| Other comprehensive income |
- |
- |
- |
104 |
- |
- |
- |
- |
440 |
544 |
(574) |
(30) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total comprehensive income for the period |
- |
- |
- |
104 |
- |
- |
- |
- |
3,917 |
4,021 |
(518) |
3,503 |
|
| Transactions with owners recorded directly in equity |
|
|
|
|
|
|
|
|
|
|
|
|
| Contributions by and distributions to owners |
|
|
|
|
|
|
|
|
|
|
|
|
| Acquisition of treasury shares |
- |
- |
- |
- |
(160) |
- |
- |
- |
- |
(160) |
- |
(160) |
| Dividend to equity holders |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(34) |
(34) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total contributions by and distributions to owners |
- |
- |
- |
- |
(160) |
- |
- |
- |
- |
(160) |
(34) |
(194) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance at 28 February 2019 |
705 |
632 |
2,975 |
(2,595) |
(9,178) |
3,382 |
- |
283 |
36,145 |
32,349 |
621 |
32.970 |
Donegal Investment Group plc
Condensed consolidated statement of cash flows
for the 6 months ended 29 February 2020 -
|
|
6 months ended 29 February 2020 |
|
6 months ended 28 February 2019 |
|
12 months ended 31 August 2019 |
|
|
€'000 |
|
€'000 |
|
€'000 |
| Cash flows from operating activities |
|
|
|
|
|
| Profit for the period |
1,383 |
|
3,533 |
|
4,495 |
| Adjustments for: |
|
|
|
|
|
| Depreciation |
393 |
|
471 |
|
933 |
| Amortisation of intangibles |
17 |
|
53 |
|
58 |
| Change in fair value of investment property |
- |
|
- |
|
(30) |
| Change in fair value of other investments |
(2) |
|
- |
|
- |
| Net finance (income)/expense |
(63) |
|
(127) |
|
1,075 |
| Loss on sale of subsidiary |
17 |
|
- |
|
30 |
| (Gain)/loss on sale of property, plant and equipment |
(11) |
|
7 |
|
(12) |
| Share-based payment transactions |
879 |
|
- |
|
586 |
| Income tax expense |
186 |
|
413 |
|
(859) |
| Change in inventories |
443 |
|
(1,333) |
|
(599) |
| Change in trade and other receivables |
(3,760) |
|
(6,266) |
|
(3,063) |
| Change in trade and other payables |
2,246 |
|
4,464 |
|
2,288 |
|
|
1,728 |
|
1,215 |
|
4,902 |
|
|
|
|
|
|
|
| Interest paid less refund |
32 |
|
(71) |
|
(122) |
| Income tax paid |
(188) |
|
- |
|
(646) |
|
|
|
|
|
|
|
| Net cash from operating activities |
1,572 |
|
1,144 |
|
4,134 |
|
|
|
|
|
|
|
| Cash flows from investing activities |
|
|
|
|
|
| Interest received |
2 |
|
2 |
|
4 |
| Dividends received |
1 |
|
- |
|
1 |
| Proceeds from sale of investment property, property, plant and equipment |
27 |
|
- |
|
30 |
| Proceeds from disposal of subsidiary undertakings, net of disposal costs |
(17) |
|
- |
|
16,708 |
| Proceeds from disposal of asset held for sale |
2,000 |
|
2,000 |
|
2,000 |
| Acquisition of other investments |
(154) |
|
- |
|
(582) |
| Acquisition of minority interest |
- |
|
(135) |
|
(135) |
| Acquisition of property, plant and equipment |
(2,914) |
|
(342) |
|
(785) |
| Acquisition of intangibles |
(4) |
|
(13) |
|
(30) |
|
|
|
|
|
|
|
| Net cash used in investing activities |
(1,059) |
|
1,512 |
|
17,211 |
Donegal Investment Group plc
Condensed consolidated statement of cash flows (continued)
for the 6 months ended 29 February 2020
|
|
6 months ended 29 February 2020 |
|
6 months ended 28 February 2019 |
|
12 months ended 31 August 2019 |
|
|
€'000 |
|
€'000 |
|
€'000 |
| Cash flows from financing activities |
|
|
|
|
|
| Repayment of borrowings |
(4,000) |
|
(500) |
|
(1,000) |
| Payment of lease liabilities |
(151) |
|
(23) |
|
(20) |
| Share based payments |
(1,310) |
|
- |
|
- |
| Acquisition of treasury shares |
(6,604) |
|
(160) |
|
(415) |
| Dividend paid to non-controlling interest |
(35) |
|
(34) |
|
(34) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net cashflow from financing activities |
(12,100) |
|
(717) |
|
(1,469) |
|
|
|
|
|
|
|
| Net (decrease)/increase in cash and cash equivalents |
(11,587) |
|
1,939 |
|
19,876 |
| Cash and cash equivalents at start of period |
25,327 |
|
5,314 |
|
5,314 |
| Effect of exchange rate fluctuations on cash held |
66 |
|
128 |
|
137 |
|
|
|
|
|
|
|
| Cash and cash equivalents at period end |
13,806 |
|
7,381 |
|
25,327 |
Donegal Investment Group plc
Notes to the unaudited preliminary condensed consolidated financial statements
for the 6 months ended 29 February 2020
(1) Reporting entity
Donegal Investment Group Plc (the "Company") is a company domiciled in Ireland. The unaudited condensed consolidated interim financial statements of the Group as at and for the six months ended 29 February 2020 ("the interim financial statements") comprise the Company and its subsidiaries (together referred to as the "Group") and the Group's interests in associates.
(2) Basis of preparation
These unaudited condensed consolidated interim financial statements have been prepared in accordance with international financial reporting standard (IFRS) IAS 34 Interim Financial Reporting as adopted by the EU. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated annual financial statements of the Group, prepared in accordance with IFRS as adopted by the EU ("EU IFRS") as at and for the period ended 31 August 2019. The financial information presented herein does not amount to statutory financial statements that are required by company law to be annexed to the annual return of the Company. The financial statements for the financial period ended 31 August 2019 are annexed to the annual return to be filed with the Registrar of Companies. The audit report on those EU IFRS financial statements was not qualified.
These interim financial statements are presented in euro, which is the Company's functional currency. All financial information presented in euro is rounded to the nearest thousand. They are prepared on the historical cost basis except that the following assets and liabilities are stated at their fair value: derivative financial instruments and investment property. These condensed consolidated interim financial statements were approved by the Board of Directors on 29 April 2020.
The interim financial statements have been prepared on the going concern basis. The Directors have reviewed the Group's business plan for the next 12 months which has been updated to reflect the potential impact of Covid-19 as currently understood and other relevant information and have a reasonable expectation that the Group will continue in operational existence for the foreseeable future.
(3) Changes in significant accounting policies
Except as described below, the accounting policies applied in these interim financial statements are the same as those applied in the last annual financial statements. The changes in accounting policies will also be reflected in the Group's consolidated financial statements as at and for the year ending 31 August 2019.
Adoption of IFRS 16 Leases
The Group has initially adopted IFRS 16 Leases from 1 September 2019. A number of other new standards are effective from 1 September 2019, but they do not have a material effect on the Group's financial statements.
IFRS 16 introduced a single, on-balance sheet accounting model for lessees. As a result, the Group, as a lessee, has recognised right-of-use assets representing its rights to use the underlying assets and lease liabilities representing its obligation to make lease payments. The Group has applied IFRS 16 using the modified retrospective approach. Accordingly, the comparative information presented for 2018 has not been restated - i.e. it is presented, as previously reported, under IAS 17 and related interpretations.
The adoption of IFRS 16 eliminated the classification of leases as either operating leases or finance leases and introduced a single lessee accounting model. The Group now assesses whether a contract is or contains a lease based on the new definition of a lease. Under IFRS 16, a contract is, or contains, a lease if the contract conveys a right to control the use of an identified asset for a period of time in exchange for consideration.
Donegal Investment Group plc
Notes to the unaudited preliminary condensed consolidated financial statements
for the 6 months ended 29 February 2020
(4) Estimates and judgements
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied in prior periods (in respect of the carrying value of goodwill, deferred tax, financial assets and liabilities).
(5) Impact of adoption of IFRS 16
The Group presents right-of-use assets in 'property, plant and equipment', in the same line item as it presents underlying assets of the same nature that it owns. The carrying amounts of right-of-use assets are as below.
|
|
Land and buildings |
Plant and equipment |
Fixtures and Fittings |
Motor Vehicles |
Total |
|
|
|
||||||
|
|
€'000 |
€'000 |
€'000 |
€'000 |
€'000 |
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
| At 1 September 2019 |
495 |
203 |
4 |
106 |
808 |
|
|
|
||||||
| A 29 February 2020 |
443 |
181 |
18 |
101 |
743 |
|
|
|||||||
The Group presents lease liabilities in 'loans and borrowings' in the balance sheet. The carrying amounts of lease liabilities are as below.
|
|
Current lease liabilities |
Non-current lease liabilities |
Total |
|
|
€'000 |
€'000 |
€'000 |
|
|
|
|
|
| At 1 September 2019 |
199 |
609 |
808 |
| A 29 February 2020 |
204 |
507 |
711 |
Under IFRS 16, a contract is, or contains a lease if the contract conveys a right to control the use of an identified asset for a period of time in exchange for consideration. The Group recognises a right-of-use asset and a lease liability at the lease commencement date.
The right-of-use asset is initially measured at cost, and subsequently at cost less any accumulated depreciation and impairment losses and adjusted for certain remeasurements of the lease liability. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, restoration costs and lease payments made at or before the commencement date less any lease incentives received. The right-of-use asset is depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Where the lease contains a purchase option the asset is written off over the useful life of the asset when it is reasonably certain that the purchase option will be exercised. Right-of-use assets are subject to impairment testing.
The lease liability is initially measured at the present value of certain lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The variable lease payments that do not depend on an index or a rate are recognised as an expense in the period in which the event or condition that triggers the payment occurs. The Group has elected to avail of the practical expedient not to separate lease components from any associated non-lease components.
The lease payments are discounted using the lessee's incremental borrowing rate as the interest rate implicit in the lease is generally not readily determinable.
Donegal Investment Group plc
Notes to the unaudited preliminary condensed consolidated financial statements
for the 6 months ended 29 February 2020
After the commencement date, the lease liability is subsequently increased by the interest cost on the lease liability and decreased by the lease payments made. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, a change in the estimate of the amount expected to be payable under a residual value guarantee, or as appropriate, changes in the assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised.
The Group has elected to apply the recognition exemptions for short-term and low-value leases and recognises the lease payments associated with these leases as an expense in profit or loss on a straight-line basis over the lease term. Short-term leases are leases with a lease term of 12 months or less.
Impacts on transition
On transition to IFRS 16, the Group recognised additional right-of-use assets and additional lease liabilities. On transition the right-of-use assets of €807,914 representing its rights to use the underlying assets equated to the lease liabilities of €807,914 representing its obligation to make lease payments, accordingly, no difference was recognised to opening retained earnings.
When measuring lease liabilities for leases that were classified as operating leases, the Group discounted lease payments using the lessee's incremental borrowing rate at 1 September 2019. The incremental borrowing rate used ranged from 2 - 6 %.
The lease liabilities as at 1 September 2019 can be reconciled to the operating lease commitments as at 31 August 2019 as follows:
|
|
|
|
€'000 |
|
|
|
|
|
| Operating lease commitments at 31 August 2019 |
|
|
855 |
|
|
|
|
|
| Leases exempt under IFRS16 |
|
|
(14) |
| Additional leases identified under IFRS16 |
|
|
23 |
| Impact of discounting |
|
|
(56) |
|
|
|
|
|
| Lease liabilities at 31 August 2019 |
|
|
808 |
Impacts for the period
In relation to those leases under IFRS 16, the Group has recognised depreciation and interest costs instead of an operating lease expense. During the six months ended 29 February 2020, the Group recognised €110,683 of depreciation charges and €16,861 of interest costs from these leases.
Donegal Investment Group plc
Notes to the unaudited preliminary condensed consolidated financial statements
for the 6 months ended 29 February 2020
(6) Segment Information
IFRS 8 Operating Segments requires operating segments to be identified on the basis of internal reports that are regularly reviewed by the chief operating decision maker (CODM) in order to allocate resources to the segments and to assess their performance.
As a result of the disposal of the Group's Agri business during the year ended 31 August 2019, the Group revised the basis on which it identifies its reportable operating segments which is in line with changes in its internal organisation.
The Group now comprises of one reportable business segment:
· Produce and dairy: The growing, sales and distribution of seed potatoes and organic produce, the manufacture, sale and distribution of dairy products and management of related property assets.
Information regarding the results of the reportable segment is included below. Performance is measured based on segment operating profit/(loss) as included in the internal management reports that are reviewed by the Group's CODM, being the Board. Segment operating profit is used to measure performance; as such information is the most relevant in evaluating the results of the Group's segments. Segment results, assets and liabilities include all items directly attributable to a segment. Segment capital expenditure is the total amount incurred during the period to acquire segment assets that are expected to be used for more than one accounting period.
Donegal Investment Group plc
Notes to the unaudited preliminary condensed consolidated financial statements (continued)
for the 6 months ended 29 February 2020
(6) Segment information (continued)
Business segments (continued)
|
|
|
Produce and Dairy |
Total - Group |
||||||
|
|
|
|
|
6 months ended 29 February 2020 |
6 months ended 28 February 2019 |
12 months ended 31 August 2019 |
6 months ended 29 February 2020 |
6 months ended 28 February 2019 |
12 months ended 31 August 2019 |
|
|
|
|
|
€'000 |
€'000 |
€'000 |
€'000 |
€'000 |
€'000 |
|
|
|
|
|
|
|
|
|
|
|
| Total revenues |
|
|
|
29,641 |
27,042 |
45,229 |
29,641 |
27,042 |
45,229 |
|
|
|
|
|
|
|
|
|
|
|
| Segment result before exceptional items & property devaluations Property devaluations Segmental result from continuing operations before exceptional items |
|
|
|
2,385 -
2,385 |
2,916 -
2,916 |
4,058 (30)
4,028 |
2,385 - _______
2,385 |
2,916 - _______
2,916 |
4,058 (30) _______
4,028 |
| Other exceptional items |
|
|
|
|
|
|
- |
(89) |
(569) |
| Net finance income/(expense) |
|
|
|
|
|
|
63 |
19 |
(261) |
| Income tax expense |
|
|
|
|
|
|
(186) |
(303) |
859 |
| Share-based payment transactions |
|
|
|
|
|
|
(879) |
- |
(586) |
|
|
|
|
|
|
|
|
|
|
|
| Profit for the period - continuing operations |
|
|
|
|
|
|
1,383 |
2,543 |
3,471 |
Donegal Investment Group plc
Notes to the unaudited preliminary condensed consolidated financial statements (continued)
for the 6 months ended 29 February 2020
(6) Segment Information (continued)
Business segments (continued)
|
|
|
Produce and Dairy |
Total - Group |
||||||||||
|
|
|
|
|
|
29 February 2020 |
28 February 2019 |
31 August 2019 |
|
29 February 2020 |
28 February 2019 |
31 August 2019 |
|
|
|
|
|
|
|
|
€'000 |
€'000 |
€'000 |
|
€'000 |
€'000 |
€'000 |
|
|
|
Segment assets |
|
|
|
|
26,442 |
47,552 |
21,465 |
|
26,442 |
47,552 |
21,465 |
|
|
| Cash at bank (unallocated) |
|
|
|
|
- |
- |
- |
|
13,878 |
10,805 |
25,735 |
|
|
| Current financial instrument (unallocated) Deferred tax |
|
|
|
|
904 |
- |
- 958 |
|
904 |
- |
- 958 |
|
|
|
|
|
|
|
|
|
|
|
|
41,224 |
58,357 |
48,158 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Segment liabilities |
|
|
|
|
11,104 |
16,490 |
9,281 |
|
11,104 |
16,490 |
9,281 |
|
|
| Bank overdraft (unallocated) |
|
|
|
|
|
|
|
|
72 |
3,424 |
408 |
|
|
| Loans and borrowings (unallocated) |
|
|
|
|
|
|
|
|
804 |
4,709 |
4,061 |
|
|
| Current financial instrument (unallocated) |
|
|
|
|
|
|
|
|
60 |
176 |
47 |
|
|
| Deferred tax (unallocated) |
|
|
|
|
|
|
|
|
- |
588 |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total liabilities |
|
|
|
|
|
|
|
|
12,040 |
25,387 |
13,797 |
|
|
| Capital expenditure |
|
|
|
|
3,771 |
355 |
815 |
|
3,771 |
355 |
815 |
|
|
| Depreciation and amortisation |
|
|
|
|
410 |
524 |
991 |
|
410 |
524 |
991 |
|
|
| Revaluation of investment property and other assets |
|
|
|
|
- |
- |
(30) |
|
- |
- |
(30) |
|
|
|
|
|
|
|
|
|
||||||||
Donegal Investment Group plc
Notes to the unaudited preliminary condensed consolidated financial statements (continued)
for the 6 months ended 29 February 2020
6) Segment Information (continued)
Entity-wide disclosures
Section 1: Information about products and service
The Group determines that the categories used in investor presentations can be used to meet the objective of the disaggregation disclosure requirement in paragraph 114 of IFRS 15, which is to disaggregate revenue from contracts with customers into categories that depicts how the nature, amount, timing and uncertainty of revenue and cashflows are affected by economic factors.
The following table illustrates the disaggregation disclosure by principal products and services to external customers.
Produce and Dairy
|
|
|
|
2020 |
Restated 2019* |
|
|
|
|
€'000 |
€'000 |
|
|
|
|
|
|
| Seed potatoes |
|
|
20,159 |
19,219 |
| Dairy products |
|
|
9,482 |
7,823 |
|
|
|
|
|
|
|
|
|
|
29,641 |
27,042 |
|
|
|
|
|
|
* As restated to reflect the effect of discontinued operations
Donegal Investment Group plc
Notes to the unaudited preliminary condensed consolidated financial statements (continued)
for the 6 months ended 29 February 2020
(7) Earnings per share
The calculation of basic and diluted earnings per share is set out below:
|
|
29 February 2020 |
28 February 2019 |
31 August 2019 |
|
|
€'000 |
€'000 |
€'000 |
| Profit for the period - continuing operations |
1,383 |
2,543 |
3,471 |
| Profit/(loss) for the period - discontinued operations |
- |
990 |
1,024 |
|
|
|
|
|
| Profit for the period |
1,383 |
3,533 |
4,495 |
|
|
|
|
|
| Profit attributable to ordinary shareholders |
1,319 |
3,477 |
4,222 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average number of ordinary shares In thousands of shares |
29 February 2020 |
28 February 2019 |
31 August 2019 |
| Weighted average number of ordinary shares in issue for the period |
4,761 |
5,425 |
4,923 |
| Weighted average number of treasury shares |
(920) |
(914) |
(750) |
|
|
|
|
|
| Denominator for basic earnings per share |
3,841 |
4,511 |
4,173 |
| Effect of share options in issue |
141 |
203 |
137 |
|
|
|
|
|
| Weighted average number of ordinary shares (diluted) at end of period |
3,982 |
4,714 |
4,310 |
|
During the six months ended 29 February 2020, the Group purchased 507,620 treasury shares at a total purchase price of €6,604,000 including transaction costs, in a number of transactions, intended to be used to settle the Group share option scheme. |
|||
|
|
29 February 2020 |
28 February 2019 |
31 August 2019 |
| Basic earnings/(loss) per share (euro cent) Continuing |
34.34 |
55.13 |
76.63 |
| Discontinued |
- |
21.95 |
24.54 |
|
|
34.34 |
77.08 |
101.17 |
| Diluted earnings/(loss) per share (euro cent) Continuing |
33.12 |
52.76 |
74.18 |
| Discontinued |
- |
21.00 |
23.76 |
|
|
33.12 |
73.76 |
97.94 |
Donegal Investment Group plc
Notes to the unaudited preliminary condensed consolidated financial statements (continued)
for the 6 months ended 29 February 2020
(8) Dividends
|
|
29 February 2020 |
28 February 2019 |
31 August 2019 |
|
|
€'000 |
€'000 |
€'000 |
| €0.00 per qualifying ordinary share (29 February 2020: €0.00) |
- |
- |
- |
|
|
|
|
|
A dividend is not declared in respect of 2020 or 2019.
(9) Property, plant and equipment
Additions and disposals
During the 6 months ended 29 February 2020, the Group acquired assets for €2,917,974 (28 February 2019: €342,000) in addition to recognition of €853,322 in right-of-use assets under IFRS 16 which was adopted on 1 September 2019. Assets with a net book value of €16,000 were disposed of during the 6 months ended 29 February 2020 (28 February 2019: €7,000), resulting in a gain on disposal of €11,000 (28 February 2019: loss of €7,000).
| (10) Investment property |
29 February 2020 |
28 February 2019 |
31 August 2019 |
|
|
€'000 |
€'000 |
€'000 |
| Balance at start of the period |
2,510 |
2,480 |
2,480 |
| Change in fair value |
- |
- |
30 |
|
|
|
|
|
| Balance at end of the period |
2,510 |
2,480 |
2,510 |
Investment property includes the Oatfield site in Letterkenny and development land in Donegal.
Additions and disposals
During the 6 months ended 29 February 2020, the Group did not acquire or dispose of any investment properties (28 February 2019:
Nil).
Donegal Investment Group plc
Notes to the unaudited preliminary condensed consolidated financial statements (continued)
for the 6 months ended 29 February 2020
(11) Exceptional items
Exceptional items are those that, in management's judgement, should be separately disclosed by virtue of their nature or amount. Such items are included in the statement of profit or loss and comprehensive income caption to which they relate and are separately disclosed in the notes to the Interim Financial Statements. The Group reports the following exceptional items:
|
|
|
29 February 2020 |
28 February 2019 |
31 August 2019 |
|
|
|
€'000 |
€'000 |
€'000 |
|
Restructuring costs |
a |
- |
(89) |
- |
| Award of other legal costs |
b |
- |
- |
245 |
| Non- cash recycle of currency translation differences |
c |
- |
- |
(814) |
| Exceptional costs - continuing operations |
|
- |
(89) |
(569) |
| Loss on disposal of subsidiaries |
d |
- |
- |
(30) |
| Total exceptional costs for the period |
|
- |
(89) |
(599) |
a) Restructuring costs include legal and professional advice in respect of costs associated with restructuring the Group.
b) Awarding of legal costs, accrued in previous periods, as a result of costs and damages awarded by the Courts in respect of other legal cases.
c) Non- cash recycle of foreign exchange translation reserves in respect struck off subsidiaries in 2019.
d) Loss on disposal of agri-activities, namely the Group's animal feeds business, disposed during 2019.
(12) Events after the balance sheet date
The Group recognises the challenging and unprecedented trading conditions resulting from the Covid-19 pandemic. 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 on the Food to Go sector. The Group is taking a number of mitigating actions including an increased focus on working capital management, reductions in capital expenditure budgets and certain targeted cost take out programmes. The Group has a live cashflow scenario planning process in place and the Directors expect that the Group will continue to have considerable financial resources available to it in all circumstances as currently foreseen.
There have been no other significant events subsequent to the period end, which would require adjustment to, or disclosure in, the interim financial statements.