DONEGAL INVESTMENT GROUP PLC
ANNOUNCEMENT OF RESULTS FOR THE 6 MONTHS ENDED 28 FEBRUARY 2022
28 April 2022
Donegal Investment Group plc ('DIG') ('Company') ('Group') reports its interim results for the 6 months ended 28 February 2022.
FINANCIAL PERFORMANCE
· The Group's seed potato business delivered a satisfactory performance for the period ended 28 February 2022. Revenue decreased by 2% (€0.4m) to €18.7m - with as expected lower yielding seed crops across European growing areas impacting volumes available for sale. The business delivered a trading profit €1.2m, a decrease of €0.5m on the prior period.
· The Group completed the sale of its speciality dairy business Nomadic Dairy ("Nomadic") on 5 November 2021 with a profit on disposal of €13.1m. This includes for the recognition of 80% of contingent consideration receivable of €3.0m, based on the discounted fair value of the contingent consideration receivable dependent on the financial performance of Nomadic for the period 1 January 2022 to 31 December 2022, inclusive. Nomadic's financial performance for the period, together with the profit on disposal, is classified as a discontinued operation in this period's results.
· Profit after tax from continuing operations was €1.3m a decrease of €0.5m on the prior period.
FINANCIAL POSITION
· The Group has a cash position, net of debt, of €3.4m at 28 February 2022 compared to a €3.7m net position at 31 August 2021 following the completion of the sale of Nomadic and the subsequent return of capital on 14 February 2022. The Group received net proceeds following the disposal of Nomadic of €16.7m. Please note an additional €3.3m in cash was held as an asset held for sale at 31 August 2021 and was also retained by the Group.
RETURN OF CAPITAL
· Following approval at the EGM on 11 February 2022, the Group completed the conversion and redemption of 1,306,497 ordinary shares of the Company at a price of €15.30 on the 14 February 2022. This resulted in a return of capital of €20.0m to our shareholders. The Group currently has issued share capital of 1,589,461 with 67,168 of those shares held as treasury shares.
HEAD OFFICE
· As announced on 1 March 2022 the Group Head Office in Ballyraine, Letterkenny is being wound down which will see the Group incur a one off cash cost of €1.6m with an exceptional charge of €0.7m being provided for at 28 February 2022. This is the continuation of cost saving measures at a corporate level which when completed will have delivered annualised cost savings of €1m.
· The Board would also like to express its thanks to director Michael Griffin who retired from the board at 31 March 2022.
|
|
|
6 months ended 28 February 2022 |
6 months ended 28 February 2021 |
Change |
| Continuing operations - pre exceptional |
|
|
|
|
| Revenue |
€'000 |
18,740 |
19,098* |
-€0.4m |
| Segmental Trading profit |
€'000 |
1,242 |
1,751* |
-€0.5m |
| Operating profit |
€'000 |
1,415 |
1,790* |
-€0.4m |
| Profit before tax |
€'000 |
1,451 |
1,893* |
-€0.4m |
| Profit after tax |
€'000 |
1,274 |
1,756* |
-€0.5m |
| Cash at bank (net of overdraft) |
€'000 |
4,053 |
445 |
+€3.6m |
| Net cash/(debt) |
€'000 |
3,356 |
(234) |
+€3.6m |
| Investment property carrying value |
€'000 |
1,590 |
3,695 |
-€2.1m |
| Net asset value per share** |
€'000 |
€9.66 |
€6.79 |
+€2.87 |
* As restated to reflect the disposal of Nomadic Dairy
**Net assets are total equity attributable to equity holders of the Company
Enquiries:
| Investors & Analysts Ian Ireland Director Donegal Investment Group Plc Tel: 074 9121766 Email: ian.ireland@donegaligroup.com
Anthony Farrell Davy Corporate Finance Tel: + 353 1 679 6363 Email: anthony.farrell@davy.ie
|
H1 2021/22 Performance Review
The board is reasonably satisfied with the performance of our seed potato business in the first half of 2021/22. Revenue decreased by 2% (€0.4m) to €18.7m while the business delivered a segmental trading profit €1.2m, a decrease of €0.5m on the prior year period. As expected, yields of harvested seed crops in European growing areas for the 2021/2022 season were lower than originally planned. While pricing remained strong it was not sufficient to offset the reduction in tonnage sold due to the availability of seed.
Outlook
We anticipate a reasonable performance for the full year ended 31 August 2022. The seed industry is seeing marginally lower demand as a result of higher costs of production for potato producers and this will remain an issue in the 2022/23 season. Developing markets in Eastern Europe have been disrupted by the ongoing conflict in Ukraine and we have limited our sales to these regions as a result.
Finance
The Group's financial position remains strong with cash at bank (net of overdraft) of €4.0m at half year, notwithstanding the fact that the 6 months ended 28 February 2022 represents a near peak point in working capital requirements, due to the seasonal nature of our seed potato businesses. Remaining loans and borrowing at 28 February 2022, relate primarily to the capitalised value of leases.
AGM
The Group's AGM will be held at The Silver Tassie Hotel, Ballymaleel, Ramelton Road, Letterkenny, Co Donegal, on Wednesday, 22 June 2022 at 11:30am.
Geoffrey Vance
Chairman
Donegal Investment Group plc
Condensed consolidated statement of profit or loss and comprehensive income
for the 6 months ended 28 February 2022
|
|
Note |
Pre-Exceptional €'000 |
Unaudited
Note 10 Exceptional €'000 |
6 months ended 28 February 2022 Total €'000 |
Pre-Exceptional €'000 |
Unaudited
Note 10 Exceptional €'000 |
6 months ended 28 February 2021 Total* €'000 |
Audited 12 months ended 31 August 2021 Total €'000 |
| Continuing operations |
|
|
|
|
|
|
|
|
| Revenue |
4 |
18,740 |
- |
18,740 |
19,098 |
- |
19,098 |
26,090 |
| Cost of sales |
|
(11,848) |
- |
(11,848) |
(11,914) |
- |
(11,914) |
(16,865) |
|
|
|
|
|
|
|
|
|
|
| Gross profit |
|
6,892 |
- |
6,892 |
7,184 |
- |
7,184 |
9,225 |
| Other income |
5 |
230 |
- |
230 |
74 |
- |
74 |
199 |
| Other expense |
6 |
- |
- |
- |
(3) |
- |
(3) |
(412) |
| Distribution expenses |
|
(3,065) |
- |
(3,065) |
(2,861) |
- |
(2,861) |
(3,220) |
| Administrative expenses |
|
(2,642) |
(780) |
(3,422) |
(2,604) |
- |
(2,604) |
(4,248) |
|
|
|
|
|
|
|
|
|
|
| Profit/(loss) from operating activities |
|
1,415 |
(780) |
635 |
1,790 |
- |
1,790 |
1,544 |
|
|
|
|
|
|
|
|
|
|
| Finance income |
|
86 |
- |
86 |
125 |
- |
125 |
122 |
| Finance expenses |
|
(50) |
- |
(50) |
(22) |
- |
(22) |
(45) |
| Net finance income |
|
36 |
- |
36 |
103 |
- |
103 |
77 |
|
|
|
|
|
|
|
|
|
|
| Profit/(loss) before income tax |
|
1,451 |
(780) |
671 |
1,893 |
- |
1,893 |
1,621 |
| Income tax (charge)/benefit |
|
(177) |
- |
(177) |
(137) |
- |
(137) |
302 |
|
Profit for the period - continuing operations |
4 |
1,274 |
|
494 |
1,756 |
- |
1,756 |
1.923
|
|
|
|
|
|
|
|
|
|
|
| Profit for the year - from discontinued operations, net of tax |
|
358 |
13,108 |
13,466 |
696 |
- |
696 |
2,269 |
|
Profit/(loss) for the year |
|
1,632 |
12,328 |
13,960 |
2,452 |
- |
2,452 |
4,192 |
|
|
|
|
|
|
|
|
|
|
| * As restated to reflect the disposal of Nomadic Dairy
|
|
|
|
|||||
| Donegal Investment Group plc Condensed consolidated statement of profit or loss and comprehensive income (continued) for the 6 months ended 28 February 2022 |
|
|
|
|
|
|
||||
|
|
|
Unaudited |
Unaudited |
Audited |
||||||
|
|
|
6 months ended 28 February 2022 Total €'000 |
6 months ended 28 February 2021 Total* €'000 |
12 months ended 31 August 2021 Total €'000 |
||||||
| Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
| Items that are or may be reclassified to profit or loss Foreign currency translation differences for foreign operations |
|
38 |
|
|
55 |
|
|
4 |
||
| Recycle of currency translation differences for foreign operations |
|
- |
|
|
- |
|
|
- |
||
| Total comprehensive income for the period |
|
13,998 |
|
|
2,507 |
|
|
4,196 |
||
|
|
|
|
|
|
|
|
|
|
|
|
| Profit attributable to: |
|
|
|
|
|
|
|
|
|
|
| Equity holders of the Company |
|
|
|
13,958 |
|
|
2,336 |
|
|
3,877 |
| Non-controlling interest |
|
|
|
2 |
|
|
116 |
|
|
315 |
|
|
|
|
|
13,960 |
|
|
2,452 |
|
|
4,192 |
| Profit attributable to: |
|
|
|
|
|
|
|
|
|
|
| Continuing operations |
|
|
|
494 |
|
|
1,756 |
|
|
1,923 |
| Discontinued operations |
|
|
|
13,466 |
|
|
696 |
|
|
2,269 |
|
|
|
|
|
13,960 |
|
|
2,452 |
|
|
4,192 |
| Total comprehensive income attributable to: |
|
|
|
|
|
|
|
|
||
| Equity holders of the Company |
|
|
|
13,990 |
|
|
2,390 |
|
|
3,879 |
| Non-controlling interest |
|
|
|
8 |
|
|
117 |
|
|
318 |
|
|
|
|
|
13,998 |
|
|
2,507 |
|
|
4,196 |
| Donegal Investment Group plc Condensed consolidated statement of profit or loss and comprehensive income (continued) for the 6 months ended 28 February 2022 |
|
|
|
|
|
|||||||
|
|
|
|
|
Unaudited |
|
|
Unaudited |
|
|
Audited |
|
|
|
Earnings per share |
|
|
|
6 months ended 28 February 2022 Total €'000 |
|
|
6 months ended 28 February 2021 Total* €'000 |
|
|
12 months ended 31 August 2021 Total €'000 |
|
|
| Basic earnings per share (euro cent): Continuing |
|
|
|
20.64 |
|
|
62.90 |
|
|
72.90 |
|
|
| Discontinued |
|
|
|
489.95 |
|
|
19.70 |
|
|
64.17 |
|
|
|
|
|
|
|
510.59 |
|
|
82.60 |
|
|
137.07 |
|
|
| Diluted earnings per share (euro cent): Continuing |
|
|
|
20.64 |
|
|
62.90 |
|
|
72.90 |
|
|
| Discontinued |
|
|
|
489.95 |
|
|
19.70 |
|
|
64.17 |
|
|
|
|
|
|
|
510.59 |
|
|
82.60 |
|
|
137.07 |
|
|
Donegal Investment Group plc
Condensed consolidated statement of financial position
As at 28 February 2022
|
|
|
Unaudited |
|
Unaudited |
|
Audited |
|
|
Note |
28 February 2022 €'000 |
|
28 February 2021 €'000 |
|
31 August 2021 €'000 |
| Assets |
|
|
|
|
|
|
| Property, plant and equipment |
8 |
3,302 |
|
6,575 |
|
3,354 |
| Investment property |
9 |
1,590 |
|
3,695 |
|
1,500 |
| Goodwill |
|
500 |
|
2,324 |
|
500 |
| Intangible assets |
|
124 |
|
259 |
|
127 |
| Investment in associates |
|
408 |
|
261 |
|
261 |
| Other investments |
|
745 |
|
745 |
|
745 |
| Total non-current assets |
|
6,669 |
|
13,859 |
|
6,487 |
|
|
|
|
|
|
|
|
| Inventories |
|
1,131 |
|
1,716 |
|
392 |
| Biological assets |
|
- |
|
- |
|
1,024 |
| Trade and other receivables |
|
8,793 |
|
13,797 |
|
3,828 |
| Contingent consideration receivable |
|
2,400 |
|
|
|
|
| Cash at bank |
|
5,878 |
|
5,118 |
|
5,307 |
| Current Tax |
|
- |
|
- |
|
- |
| Asset held for sale |
|
- |
|
- |
|
14,388 |
| Deferred tax asset |
|
- |
|
500 |
|
- |
|
|
|
|
|
|
|
|
| Total current assets |
|
18,202 |
|
21,131 |
|
24,939 |
|
|
|
|
|
|
|
|
| Total assets |
|
24,871 |
|
34,990 |
|
31,426 |
|
|
|
|
|
|
|
|
| Equity |
|
|
|
|
|
|
| Share capital |
|
206 |
|
376 |
|
376 |
| Share premium account |
|
2,975 |
|
2,975 |
|
2,975 |
| Other reserves |
|
1,836 |
|
1,687 |
|
1,634 |
| Retained earnings |
|
9,690 |
|
14,180 |
|
15,721 |
| Total equity attributable to equity holders of the Company |
|
14,707 |
|
19,218 |
|
20,706 |
| Non-controlling interest |
|
(627) |
|
906 |
|
1,057 |
| Donegal Investment Group plc Condensed consolidated statement of financial position (continued) As at 28 February 2022
|
|
|
|
|
|
|
| Total equity |
|
14,080 |
|
20,124 |
|
21,763 |
| Liabilities |
|
|
|
|
|
|
| Loans and borrowings |
|
476 |
|
449 |
|
478 |
| Deferred income |
|
192 |
|
228 |
|
211 |
| Deferred tax liability |
|
54 |
|
|
|
54 |
| Total non-current liabilities |
|
722 |
|
677 |
|
743
|
|
Loans and borrowings |
|
221 |
|
230 |
|
253 |
| Trade and other payables |
|
7,666 |
|
9,188 |
|
3,926 |
| Bank overdraft |
|
1,825 |
|
4,673 |
|
890 |
| Liabilities directly associated with asset held for sale |
|
- |
|
- |
|
3,661 |
| Current financial instrument |
|
- |
|
53 |
|
- |
| Current tax |
|
357 |
|
45 |
|
190 |
|
|
|
|
|
|
|
|
| Total current liabilities |
|
10,069 |
|
14,189 |
|
8,920 |
|
|
|
|
|
|
|
|
| Total liabilities |
|
10,791 |
|
14,866 |
|
9,663 |
|
|
|
|
|
|
|
|
| Total equity and liabilities |
|
24,871 |
|
34,990 |
|
31,426 |
Donegal Investment Group plc
Condensed consolidated statement of changes in equity
for the 6 months ended 28 February 2022
|
|
Share capital €'000 |
Other un- denominated capital €'000 |
Share premium account €'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 2021 |
376 |
961 |
2,975 |
(1,864) |
(845) |
3,382 |
- |
- |
15,721 |
20,706 |
1,057 |
21,763 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total comprehensive income for the period |
|
|
|
|
|
|
|
|
|
|
|
|
| Profit for the period |
- |
- |
- |
- |
- |
- |
- |
- |
13,958 |
13,958 |
2 |
13,960 |
| Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
| Foreign currency translation differences for foreign operations |
- |
- |
- |
32 |
- |
- |
- |
- |
- |
32 |
6 |
38 |
| Other comprehensive income |
- |
- |
- |
32 |
- |
|
- |
- |
- |
32 |
6 |
38 |
| Total comprehensive income for the period |
- |
- |
- |
32 |
- |
- |
- |
- |
13,958 |
13,990 |
8 |
13,998 |
| Transactions with owners recorded directly in equity |
|
|
|
|
|
|
|
|
|
|
|
|
| Contributions by and distributions to owners |
|
|
|
|
|
|
|
|
|
|
|
|
| Share Redemption |
(170) |
170 |
- |
- |
- |
- |
- |
- |
(19,989) |
(19,989) |
- |
(19,989) |
| Derecognition of minority interest |
- |
- |
-
|
- |
-
|
- |
-
|
-
|
- |
- |
(1,692) |
(1,692) |
| Total contributions by and distributions to owners |
(170) |
170 |
- |
- |
- |
- |
- |
- |
(19,989) |
(19,989) |
(1,692) |
(21,681) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance at 28 February 2022 |
206 |
1,131 |
2,975 |
(1,832) |
(845) |
3,382 |
- |
- |
9,690
|
14,707 |
(627) |
14,080 |
Donegal Investment Group plc
Condensed consolidated statement of changes in equity (continued)
for the 6 months ended 28 February 2022
|
|
Share capital €'000 |
Other un- denominated capital €'000 |
Share premium account €'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 2020 |
376 |
857 |
2,975 |
(1,865) |
(1,273) |
3,382 |
- |
- |
11,965 |
16,417 |
872 |
17,289 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total comprehensive income for the period |
|
|
|
|
|
|
|
|
|
|
|
|
| Profit for the period |
- |
- |
- |
- |
- |
- |
- |
- |
2,336 |
2,336 |
116 |
2,452 |
| Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
| Foreign currency translation differences for foreign operations |
- |
- |
- |
54 |
- |
- |
- |
- |
-
|
54 |
1
|
55 |
| Other comprehensive income |
- |
- |
- |
54 |
- |
- |
- |
- |
- |
54 |
1 |
55 |
| Total comprehensive income for the period |
- |
- |
- |
54 |
- |
- |
- |
- |
2,336 |
2,390 |
117 |
2,507 |
| Transactions with owners recorded directly in equity |
|
|
|
|
|
|
|
|
|
|
|
|
| Contributions by and distributions to owners |
|
|
|
|
|
|
|
|
|
|
|
|
| Reclassification of redeemable shares |
- |
104 |
- |
- |
- |
- |
- |
- |
(104) |
- |
- |
- |
| Dividend to equity holders Share based payments Cash settlement of share options |
- -
- |
- -
- |
- -
- |
- -
- |
- 428
- |
- -
- |
- -
- |
- -
- |
- (403)
386
|
- 25
386 |
(83) -
- |
(83) 25
386 |
| Total contributions by and distributions to owners |
- |
104 |
- |
- |
428 |
- |
- |
- |
(121) |
411 |
(83) |
328 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance at 28 February 2021 |
376 |
961 |
2,975 |
(1,811) |
(845) |
3,382 |
- |
- |
14,180 |
19,218 |
906 |
20,124 |
Donegal Investment Group plc
Condensed consolidated statement of cash flows
for the 6 months ended 28 February 2022
|
Note
|
6 months ended 28 February 2022 |
|
6 months ended 28 February 2021 |
|
12 months ended 31 August 2020 |
|
|
€'000 |
|
€'000 |
|
€'000 |
| Cash flows from operating activities |
|
|
|
|
|
| Profit for the period |
13,960 |
|
2,452 |
|
4,192 |
| Adjustments for: |
|
|
|
|
|
| Depreciation |
361 |
|
535 |
|
1,077 |
| Amortisation of intangibles |
3 |
|
21 |
|
40 |
| Amortisation of capital grant |
23 |
|
11 |
|
23 |
| Reversal of provision against receivable from associate |
(150) |
|
- |
|
- |
| Change in fair value of investment property |
(23) |
|
(41) |
|
410 |
| Change in fair value of other investments |
- |
|
2 |
|
2 |
| Net finance income |
(49) |
|
(128) |
|
(96) |
| Interest charged in relation to IFRS16 |
13 |
|
16 |
|
31 |
| Gain on sale of investment property |
- |
|
- |
|
(81) |
| (Gain)/loss on sale of property, plant and equipment |
(2) |
|
3 |
|
(15) |
| Profit on sale of asset held for sale |
(13,108) |
|
- |
|
- |
| Share-based payment transactions |
- |
|
51 |
|
51 |
| Income tax expense |
199 |
|
233 |
|
20 |
| Change in inventories |
186 |
|
483 |
|
40 |
| Change in trade and other receivables |
(5,560) |
|
(8,329) |
|
(2,081) |
| Change in trade and other payables |
3,985 |
|
2,939 |
|
1,263 |
|
|
(162) |
|
(1,752) |
|
4,877 |
|
|
|
|
|
|
|
| Interest (paid)/refund |
(37) |
|
(1) |
|
14 |
| Income tax refund |
14 |
|
15 |
|
187 |
|
|
|
|
|
|
|
| Net cash from operating activities |
(185) |
|
(1,738) |
|
5,078 |
|
|
|
|
|
|
|
| Cash flows from investing activities |
|
|
|
|
|
| Interest received |
9 |
|
1 |
|
2 |
| Dividends received |
1 |
|
- |
|
- |
| Proceeds from sale of investment property |
- |
|
- |
|
1,834 |
| Proceeds from asset held for sale |
16,749 |
|
- |
|
- |
| Acquisition of property, plant and equipment |
(128) |
|
(821) |
|
(1,877) |
| Acquisition of intangibles |
- |
|
(9) |
|
(75) |
|
|
|
|
|
|
|
| Net cash used in investing activities |
16,631 |
|
(829) |
|
(116) |
Donegal Investment Group plc
Condensed consolidated statement of cash flows (continued)
for the 6 months ended 28 February 2022
|
Note |
6 months ended 28 February 2022 |
|
6 months ended 28 February 2021 |
|
12 months ended 31 August 2021 |
|
|
€'000 |
|
€'000 |
|
€'000 |
| Cash flows from financing activities |
|
|
|
|
|
| Payment of finance lease liabilities |
(158) |
|
(162) |
|
(344) |
| Settlement of share based payments Share redemption 12 |
- (19,989) |
|
(751) (9,990) |
|
(750) (9,990) |
| Dividend paid to non-controlling interest |
- |
|
(83) |
|
(134) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net cashflow from financing activities |
(20,147) |
|
(10,986) |
|
(11,218) |
|
|
|
|
|
|
|
| Net decrease in cash and cash equivalents |
(3,701) |
|
(13,553) |
|
(6,256) |
| Cash and cash equivalents at start of period |
7,750 |
|
13,974 |
|
13,974 |
| Effect of exchange rate fluctuations on cash held |
4 |
|
24 |
|
32 |
|
|
|
|
|
|
|
| Cash and cash equivalents at period end |
4,053 |
|
445 |
|
7,750 |
(Cash and cash equivalents at 31 August 2021 of €7.8m are inclusive of cash at bank (net of overdraft) of €4.42m and cash at bank classified as asset held for sale of €3.33m)
Donegal Investment Group plc
Notes to the unaudited preliminary condensed consolidated financial statements
for the 6 months ended 28 February 2022
(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 28 February 2022 ("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 interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting and should be read in conjunction with the Group's last annual consolidated financial statements as at and for the year ended 31 August 2021 ('last annual financial statements'). They do not include all of the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual financial statements.
The 28 February 2022 figures and the 28 February 2021 comparative figures do not constitute statutory financial statements of the Group within the meaning of the Companies Act, 2014. The consolidated financial statements of the Group for the year ended 31 August 2021, together with the independent auditor's report thereon, were filed with the Irish Registrar of Companies following the Company's Annual General Meeting and are also available on the Company's Website. The auditor's report on those financial statements was unqualified.
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 ongoing 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.
It should also be noted that the Group remains in a strong position with cash at bank of €4.1m at 28 February 2022 and the remaining operating business continuing to trade well while generating positive cash flows.
The Interim Financial Statements are presented in Euro, rounded to the nearest thousand, which is the functional currency of the Company and also the presentation currency for the Group's financial reporting.
The significant accounting policies applied in these interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ending 31 August 2021.
(3) 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 impairment of trade receivables, in respect of the carrying value of goodwill, recognition of deferred tax assets, measurement of financial assets and liabilities.
Donegal Investment Group plc
Notes to the unaudited preliminary condensed consolidated financial statements (continued)
for the 6 months ended 28 February 2022
(4) 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) which the Group has identified to the Board of Directors in order to allocate resources to the segments and to assess their performance.
Produce: The growing, sales and distribution of seed potatoes and rental and sale of related property assets.
Dairy: The manufacture, sale and distribution of dairy products. Information relevant to this segment, the activities of which are classified as a discontinued operation, is included in note 14.
The main factors employed in the identification of the single segment include:
• the Group's organisational structure
• the nature of reporting lines to the Chief Operating Decision Maker
• the structure of internal reporting documentation such as management accounts and budgets
• Segment performance is evaluated based on operating profit. Given that net finance costs, taxation, share based payments and exceptional income and costs are managed on a centralised basis, these items are not allocated to the operating segment for internal reporting purposes and in the segmental analysis below.
Donegal Investment Group plc
Notes to the unaudited preliminary condensed consolidated financial statements (continued)
for the 6 months ended 28 February 2022
(4) Segment information (continued)
Business segments (continued)
|
|
|
Produce |
Total - Group |
||||||
|
|
|
|
|
6 months ended 28 February 2022 |
6 months ended 28 February 2021 |
12 months ended 31 August 2021 |
6 months ended 28 February 2022 |
6 months ended 28 February 2021 |
12 months ended 31 August 2021 |
|
|
|
|
|
€'000 |
€'000* |
€'000 |
€'000 |
€'000* |
€'000 |
|
|
|
|
|
|
|
|
|
|
|
| Total revenues |
|
|
|
18,740 |
19,098 |
26,090 |
18,740 |
19,098 |
26,090 |
|
|
|
|
|
|
|
|
|
|
|
| Segment result before exceptional items Segmental result from continuing operations before exceptional items |
|
|
|
1,242
1,242 |
1,751
1,751 |
2,005
2,005 |
1,242
1,242 |
1,751
1,751 |
2,005
2,005 |
| Exceptional items, net of tax |
|
|
|
|
|
|
(780) |
- |
- |
| Change in fair value of investment property and other assets |
|
|
|
|
|
|
173 |
39 |
(410) |
| Share option expense not allocated to subsidiary business |
|
|
|
|
|
|
- - |
- - |
- (51) |
| Net finance income |
|
|
|
|
|
|
36 |
103 |
77 |
| Income tax (expense)/benefit |
|
|
|
|
|
|
(177) |
(137) |
302 |
| Profit for the period - continuing operations |
|
|
|
|
|
|
494 |
1,756 |
1,923 |
* As restated to reflect the disposal of Nomadic Dairy
Donegal Investment Group plc
Notes to the unaudited preliminary condensed consolidated financial statements (continued)
for the 6 months ended 28 February 2022
(4) Segment Information (continued)
Business segments (continued)
|
|
|
Produce and Dairy |
Total - Group |
||||||||||
|
|
|
|
|
|
28 February 2022 |
28 February 2021 |
31 August 2021 |
|
28 February 2022 |
28 February 2021 |
31 August 2021 |
|
|
|
|
|
|
|
|
€'000 |
€'000 |
€'000 |
|
€'000 |
€'000 |
€'000 |
|
|
|
Segment assets |
|
|
|
|
18,993 |
29,372 |
11.731 |
|
18,993 |
29,372 |
11,731 |
|
|
| Cash at bank (unallocated) |
|
|
|
|
|
|
|
|
5,878 |
5,118 |
5,307 |
|
|
| Asset held for sale |
|
|
|
|
|
|
|
|
- |
- |
14,388 |
|
|
| Deferred tax asset |
|
|
|
|
|
|
|
|
- |
500 |
- |
|
|
|
|
|
|
|
|
|
|
|
|
24,871 |
34,990 |
31,426 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Segment liabilities |
|
|
|
|
8,215 |
9,461 |
4,327
|
|
8,215 |
9,461 |
4,327
|
|
|
| Bank overdraft (unallocated) |
|
|
|
|
|
|
|
|
1,825 |
4,673 |
890 |
|
|
| Loans and borrowings (unallocated) |
|
|
|
|
|
|
|
|
697 |
679 |
731 |
|
|
| Deferred tax liability |
|
|
|
|
|
|
|
|
54 |
- |
54 |
|
|
| Liabilities directly associated with asset held for sale |
|
|
|
|
|
|
|
|
- |
- |
3,661 |
|
|
| Current financial instrument (unallocated) |
|
|
|
|
|
|
|
|
- |
53 |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total liabilities |
|
|
|
|
|
|
|
|
10,791 |
14,866 |
9,663 |
|
|
| Capital expenditure (inclusive of IFRS 16) |
|
|
|
|
237 |
885 |
1,575 |
|
237 |
885 |
1,575 |
|
|
| Depreciation and amortisation |
|
|
|
|
364 |
556 |
462 |
|
364 |
556 |
462 |
|
|
| Revaluation of investment property and other assets |
|
|
|
|
173 |
41 |
(410) |
|
173 |
41 |
(410) |
|
|
|
|
|
|
|
|
|
||||||||
Donegal Investment Group plc
Notes to the unaudited preliminary condensed consolidated financial statements (continued)
for the 6 months ended 28 February 2022
(4) 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
|
|
|
|
6 months ended 28 February 2022 |
6 months ended 28 February 2021 |
12 months ended 31 August 2021 |
|
|
|
|
€'000 |
€'000* |
€'000 |
|
|
|
|
|
|
|
| Seed potato |
|
|
18,740 |
19,098 |
26,090 |
|
|
|
|
|
|
|
|
|
|
|
18,740 |
19,098 |
26,090 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* As restated to reflect the disposal of Nomadic Dairy
Donegal Investment Group plc
Notes to the unaudited preliminary condensed consolidated financial statements (continued)
for the 6 months ended 28 February 2022
(5) Other income - continuing operations 6 months ended 6 months ended 12 months ended
|
|
|
28 February 2022 |
28 February 2021* |
31 August 2021 |
2019 |
|
|
|
€'000 |
€'000 |
€'000 |
€'000 |
| Income from investment property rentals |
|
33 |
35 |
88 |
80 |
| Reversal of provision against receivable from associate |
|
150 |
- |
- |
|
| Change in fair value of investment property |
|
20 |
39 |
- |
30 |
| Revaluation of PPE prior to transfer to investment property |
|
3 |
- |
- |
|
| Profit on disposal of investment property |
|
- |
- |
80 |
|
| Gain on disposal of property, plant and equipment |
|
2 |
- |
15 |
- |
| Government grant |
|
22 |
- |
16 |
|
|
|
|
230 |
74 |
199 |
110 |
* As restated to reflect the disposal of Nomadic Dairy
(6) Other expense - continuing operations 6 months ended 6 months ended 12 months ended
|
|
|
28 February 2022 |
28 February 2021* |
31 August 2021 |
2019 |
|
|
|
€'000 |
€'000 |
€'000 |
€'000 |
| Change in fair value of investment property |
|
- |
- |
(410) |
80 |
| Loss on disposal of property, plant and equipment |
|
- |
(3) |
- |
|
| Change in fair value of other investments |
|
- |
- |
(2) |
30 |
|
|
|
- |
(3) |
(412) |
110 |
* As restated to reflect the disposal of Nomadic Dairy
Donegal Investment Group plc
Notes to the unaudited preliminary condensed consolidated financial statements (continued)
for the 6 months ended 28 February 2022
(7) Earnings per share
The calculation of basic and diluted earnings per share is set out below:
6 months ended 6 months ended 12 months ended
|
|
28 February 2022 |
28 February 2021 |
31 August 2021 |
|||
|
|
€'000 |
€'000* |
€'000 |
|||
| Profit for the period - continuing operations |
494 |
1,756 |
1,923 |
|||
| Profit for the period - discontinued operations |
13,466 |
696 |
2,269 |
|||
|
|
|
|
|
|||
| Profit for the period |
13,960 |
2,452 |
4,192 |
|||
|
|
|
|
|
|||
| Profit attributable to ordinary shareholders |
13,958 |
2,336 |
3,877 |
|||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
| Weighted average number of ordinary shares In thousands of shares |
6 months ended 28 February 2022 €'000 |
6 months ended 28 February 2021* €,000 |
12 months ended 31 August 2021 €,000 |
|
||
| Weighted average number of ordinary shares in issue for the period |
2,802 |
2,896 |
2,896 |
|
||
| Weighted average number of treasury shares |
(68) |
(68) |
(68) |
|
||
|
|
|
|
|
|
||
| Denominator for basic earnings per share |
2,734 |
2,828 |
2,828 |
|
||
| Effect of share options in issue |
- |
- |
- |
|
||
|
|
|
|
|
|
||
| Weighted average number of ordinary shares (diluted) at end of period |
2,734 |
2,828 |
2,828 |
|
||
|
* As restated to reflect the disposal of Nomadic Dairy |
|
|||||
|
|
6 months ended 28 February 2022 |
6 months ended 28 February 2021* |
12 months ended 31 August 2021 |
|
||
| Basic earnings/(loss) per share (euro cent) Continuing |
20.64 |
62.90 |
72.90 |
|
||
| Discontinued |
489.95 |
19.70 |
64.17 |
|
||
|
|
510.59 |
82.60 |
137.07 |
|
||
| Diluted earnings/(loss) per share (euro cent) Continuing |
20.64 |
62.90 |
72.90 |
|
||
| Discontinued |
489.95 |
19.70 |
64.17 |
|
||
|
|
510.59 |
82.60 |
137.07 |
|
||
* As restated to reflect the disposal of Nomadic Dairy
Donegal Investment Group plc
Notes to the unaudited preliminary condensed consolidated financial statements (continued)
for the 6 months ended 28 February 2022
(8) Property, plant and equipment
Additions and disposals
During the 6 months ended 28 February 2022, the Group acquired assets for €128,000 (28 February 2021: €830,000) in addition to recognition of €109,000 (28 February 2021: €55,000) in right of use assets under IFRS 16. Assets with a net book value of €Nil were disposed of during the 6 months ended 28 February 2022 (28 February 2021: €6,000), resulting in a gain on disposal of €2,000 (28 February 2021: loss of €3,000).
| (9) Investment property |
28 February 2022 |
28 February 2021 |
31 August 2021 |
|
|
€'000 |
€'000 |
€'000 |
| Balance at start of the period |
1,500 |
3,365 |
3,365 |
| Reclassification from property, plant & equipment |
67 |
289 |
289 |
| Disposal |
- |
- |
(1,744) |
| Change in fair value |
23 |
41 |
(410) |
| Balance at end of the period |
1,590 |
3,695 |
1,500 |
Investment property includes the Oatfield site in Letterkenny along with other land and property assets.
Donegal Investment Group plc
Notes to the preliminary condensed consolidated financial statements (continued)
for the 6 months ended 28 February 2022
(10) 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:
|
|
|
28 February 2022 |
28 February 2021 |
31 August 2021 |
|||
|
|
|
€'000 |
€'000 |
€'000 |
|||
| Redundancy and restructuring |
a |
(699) |
- |
- |
|||
| Other legal costs |
b |
(81) |
- |
- |
|||
| Exceptional costs before tax - continuing operations |
|
(780) |
- |
- |
|||
| Income tax expense in respect of exceptional items |
|
- |
- |
- |
|||
| Exceptional costs after tax - continuing operations |
|
(780) |
- |
- |
|||
| Profit on disposal of asset held for sale |
c |
13,108 |
- |
- |
|||
| Exceptional profit from discontinued operations |
|
13,108 |
- |
- |
|||
| Total exceptional income for the year |
|
12,328 |
- |
- |
|||
a) Restructuring costs include redundancy costs of €699,000.
b) Other legal costs are costs in respect of the share redemption incurred during 2022.
c) Profit on disposal of asset held for sale, namely the Group's speciality dairy business, disposed on 5 November 2021
(11) Events after the balance sheet date
There have been no significant events subsequent to the period end, which would require adjustment to, or disclosure in, the interim financial statements.
Donegal Investment Group plc
Notes to the preliminary condensed consolidated financial statements (continued)
for the 6 months ended 28 February 2022
(12) Share Capital
|
|
|
Ordinary Shares |
Redeemable Ordinary Shares |
Deferred Shares |
Total |
|||
|
|
|
Number |
€'000 |
Number |
€'000 |
Number |
€'000 |
€'000 |
| Authorised |
|
|
|
|
|
|
|
|
| Balance at 1 September 2021 |
|
50,000,000 |
6,500 |
800,000 |
104 |
800,000 |
104 |
6,708 |
| Amendment to capital in the period |
|
- |
- |
507,190 |
66 |
507,190 |
66 |
132 |
| Balance at 28 February 2022 |
|
50,000,000 |
6,500 |
1,307,190 |
170 |
1,307,190 |
170 |
6,840 |
|
|
|
|
|
|
|
|
|
|
| Issued, called up and fully paid |
|
|
|
|
|
|
|
|
| Balance at 1 September 2021 |
|
2,895,958 |
376 |
- |
- |
- |
- |
376 |
| Converted in the period |
|
(1,306,497) |
(170) |
1,306,497 |
170 |
- |
- |
- |
| Redeemed in the period |
|
- |
- |
(1,306,497) |
(170) |
- |
- |
(170) |
| Balance at 28 February 2022 |
|
1,589,461 |
206 |
- |
- |
- |
- |
206 |
As approved by shareholders at the Extraordinary General Meeting held on 11 February 2022, the authorised share capital of the Company was increased from €6,708,000 to €6,840,000 by, inter alia, the creation of an additional 507,190 Redeemable Ordinary Shares of €0.13 each and 507,190 Deferred Shares of €0.13 each.
The Ordinary Shares and the Redeemable Ordinary Shares rank pari passu. A Deferred Share has no rights other than a right to participate in any surplus arising on the winding up of the Company up to the nominal amount paid up on the Deferred Share.
Share redemption
As approved by shareholders at the Extraordinary General Meeting held on 11 February 2022, the Company was authorised to redeem up to 1,307,190 Redeemable Ordinary Shares. 1,306,497 Ordinary Shares (approximately 46.21 per cent of each Shareholder's total holding of Ordinary Shares) as at the conversion date of 14 February 2022 were converted into Redeemable Ordinary Shares and redeemed at €15.30 per share. On redemption these shares were cancelled from the issued share capital of the Company with €170k being credited to the Company's Other Undenominated Capital. €19,989,000 was paid during the period in relation to the redemption of Redeemable Ordinary shares.
As part of the share redemption, a member could notify the Company before the conversion of his Ordinary Shares of his unwillingness to have some of his Ordinary Shares converted into Redeemable Ordinary Shares. The directors could convert up to 1,307,190 of the existing Ordinary Shares into Redeemable Ordinary Shares. Whereby a member notified the Company in accordance with section 83 of the Companies Act 2014 of his unwillingness to have any of his Ordinary Shares converted into Redeemable Ordinary Shares, that percentage of his Ordinary Shares which would have been converted into Redeemable Ordinary Shares shall instead be converted into Deferred Shares. No such notifications from members were received in advance of the redemption.
Following the Return of Capital, the Company's issued Ordinary Share Capital is 1,589,461.
Donegal Investment Group plc
Notes to the preliminary condensed consolidated financial statements (continued)
for the 6 months ended 28 February 2022
(13) Related party transactions
Details of related party transactions in respect of the year ended 31 August 2021 are contained in Note 34 to the Consolidated Financial Statements of the Group's 2021 Annual Report. The Group continued to enter into transactions in the normal course of business with its associates and other related parties during the period. The Group entered into consultancy agreements with former executive directors Mr. Ian Ireland and Mr. Padraic Lenehan, which the board believe to be fair and reasonable. There were no other transactions with related parties in the period or changes to transactions with related parties disclosed in the 2021 Consolidated Financial Statements that had a material effect on the financial position or the performance of the Group.
(14) Discontinued operations
During the period, the Group disposed of its speciality dairy business, Nomadic Dairy and therefore the trade for the period is presented as discontinued operations.
The profit incurred in respect of its dairy operations in the period prior to its disposal on 5 November 2021 was €358,000 and the 2021 results have been restated on a comparable basis as required for the six-month period. The revenue, results and cashflows of the Group's discontinued operations were as follows:
|
|
28 February 2022 |
28 February 2021 |
|
|
€'000 |
€'000 |
| Revenue |
3,557 |
7,307 |
| Cost of sales |
(2,318) |
(4,874) |
| Gross profit |
1,239 |
2,433 |
| Other income |
3 |
223 |
| Distribution expenses |
(369) |
(704) |
| Administrative expenses |
(451) |
(1,169) |
| Profit from operating activities |
422 |
783 |
| Finance income |
- |
9 |
| Finance expense |
(42) |
- |
| Net finance (expense)/income |
(42) |
9 |
| Results for the period before taxation and exceptional |
380 |
792 |
| Income tax |
(22) |
(96) |
| Exceptional item |
- |
- |
| Results for the period after taxation |
358 |
696 |
| Profit on disposal of discontinued operations |
13,108 |
- |
| Profit for the period on discontinued operations |
13,466 |
696 |
|
|
|
|
| Cashflow |
|
|
| Net cash from operating activities |
(26) |
1,097 |
| Net cash from investing activities |
(33) |
(271) |
| Net cash from financing activities |
- |
(284) |
| Net (decrease)/increase in cash and cash equivalents |
(59) |
542 |
|
|
|
|
Donegal Investment Group plc
Notes to the preliminary condensed consolidated financial statements (continued)
for the 6 months ended 28 February 2022
(15) Disposal of subsidiary
|
|
|
2022 |
2021 |
|
|
|
€'000 |
€'000 |
|
|
|
|
|
| Profit on disposal of asset held for sale, net |
|
13,108 |
- |
On 5 November 2021, the Group announced that it has completed the disposal of its 80 per cent owned subsidiary, Nomadic Dairy Limited (Nomadic).
The overall transaction value for 100 per cent share capital of Nomadic comprises of (1) €26.1m of cash consideration (including existing Nomadic cash of €3.1m) on completion (Initial Consideration), subject to customary completion accounts adjustments, and (2) a further contingent consideration of up to a maximum of €6m dependent on the financial performance of Nomadic for the period 1 January 2022 to 31 December 2022, inclusive. The Group has an 80 per cent interest in Nomadic with its share of the Initial Consideration being €20.9m and a further €4.8m being its potential share of the maximum contingent consideration. At 28 February 2022, the discounted fair value measurement of the potential contingent consideration is €2.4m, dependent on the financial performance of Nomadic for the period 1 January 2022 to 31 December 2022.
The carrying value of net identifiable assets disposed of amounts to €11,084,000 resulting in a profit on disposal of €13,108,000 after accounting for the non-controlling interest of €1,692,000.
The net assets of the businesses disposed of were as follows:
|
|
|
|
2022 |
|||||||||||||||||||||||||||||
|
|
|
|
€'000 |
|||||||||||||||||||||||||||||
|
|
|
|
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.