Soaring prices for potatoes and seed potatoes drove double-digit profit growth at Donegal Investment Group for its 2019 financial year. The Letterkenny-based company saw its net profits more than double (+130%) to €4m last year.

The summer drought in 2018 caused significant damage to potato crops across Europe, which led to a major spike in the price of potatoes, as well as seed potatoes.

Donegal’s seed potato business, which trades as Irish Potato Marketing (IPM), has the proprietary rights for 36 potato varieties, including Rooster, Burren, Banba, Slaney, Nectar and Electra.

Exports to 40 countries

The business exports these varieties to over 40 countries around the world, including key markets in north Africa, the Middle East and the UK.

Donegal Investment Group (formerly Donegal Creameries) saw its turnover for the year grow by 11% to reach €45m. Operating profits doubled to €3.7m, as profit margins expanded from 4.5% in 2018 to a very healthy 8.2% in 2019. Pre-tax profits increased 57% to €3.2m.

Donegal’s speciality dairy business, which trades under the Nomadic brand, also performed strongly in 2019 and delivered double-digit sales growth.

In 2019, Nomadic consolidated its position as the number one yogurt brand in the convenience sales channel in Great Britain, according to Donegal managing director Ian Ireland.

At year-end, Donegal had a net cash position of €21.3m. During the year, Donegal agreed to sell its Smyths Daleside Animal Feeds business and Burke Shipping business to Northern Ireland-based Fane Valley Co-op in a deal worth €17.25m.

Smyths manufactures animal feed from its mill in Ballindrait, Co Donegal, and sells to farmers across the north and northwest of Ireland.

Burkes is an independent port agency business based at Lisahally Port and provides port agency, stevedoring, warehousing and customs clearance services to a range of clients involved in importing and storing feed and other bulk materials.