Donegal to switch stock listing to IEX

Donegal Creameries plans to switch its stock exchange listing to the alternative Irish Enterprise Exchange (IEX) in a bid to save money.

The company plans to call an extraordinary general meeting (egm) on September 5th to ask shareholders to pass a special resolution approving the change in listing.

The move means that Donegal will have to cancel its listing on the main market and seek admission to the IEX. If shareholders approve the change, the new listing will become effective on September 30th.

It will opt to use a fast-track system that allows companies seeking IEX admission to do so without producing an admission document on condition that they give 20 business days notice of their intention to do so.

In a statement yesterday, the board indicated that the move would save the company cash. It pointed out that complying with the regulations for firms with a full listing was becoming more expensive.

"Overall the regulatory regime to which the IEX companies are subject is better suited to companies of our size, giving us the ability to undertake transactions and meet the ongoing requirements of a quoted company, subject to the IEX rules, more quickly and in a more cost effective manner," it said.

With a market capitalisation at the close of business yesterday of €42.1 million, Donegal Creameries is one of the smallest companies on the Irish Stock Exchange's full list.

It accounts for just 0.1 per cent of the index.

Sources calculate that the savings for Donegal Creameries could be in the high six figures.

The statement also acknowledged that Donegal had gone through a number of difficulties in its businesses.

At its annual general meeting (agm) late last month, the company issued a profit warning.

In June the company reported that profits in 2005 plunged 55 per cent to €2 million.

However, at the agm, managing director Ian Ireland said that the company intended to explore new investment opportunities.