Foods group Donegal Creameries has reported an 11 per cent increase in pre-tax profits for 1999 to £3.46 million. Earnings per share rose to 29.3p from 26.2p. Profits from operations, the sale of fixed assets and joint ventures increased, but there was a significant drop in profits from the sale of investments.

Shareholders are to get a final dividend of 4p per share, bringing the total dividend for the year to 7p per share, up 29.6 per cent. Turnover at the group, whose operations include dairy processing, confectionery, potatoes and, most recently, compost and mushrooms with the addition of Carbury Mushrooms, was 35.5 per cent ahead at £78.7 million. Acquisitions added £5.9 million to revenue in 1999.

Group operating profits were 5.7 per cent higher at £2.2 million, attributed mainly to a strong performance by the agri-trading section. But operating margins fell, pulled back by the write-off of the £381,000 investment in Ennis Foods. When this was excluded, margins were marginally higher.

Donegal managing director Mr John Keon said that current performance indicated that the outcome for the year would be satisfactory.

Consolidation of the mushroom business in the UK should provide growth opportunities for Carbury, he added.

The company reported that a stronger sterling made milk from Northern Ireland more expensive, while volumes sold into that market were down due to intense price competition.

Agri-trading turnover jumped to £49.9 million from £29.6 million, with significant increases in animal feed and fertiliser sales reported through its 14 retail stores, though they made "only a small contribution to profits".