Food group Donegal Creameries is to delay the release of its 2004 financial results and restate its 2003 results because of problems in finalising results at its associate company Monaghan Middlebrook Mushrooms.
In a statement to the stock exchange after markets closed on Tuesday evening, Donegal said Monaghan had indicated that its results should be available during May. Donegal added that its results should therefore be available by the end of May and would be in line with market expectations.
The delay in finalising Monaghan's results arises from issues associated with the financial statements of Carbury Mushrooms for 2003. Donegal held a 52.5% stake in Carbury, which was merged with Monaghan during 2004. Following the merger, Donegal holds 23% of Monaghan.
The issues at Carbury include the write-off of a bad debt and understatements of money owed to creditors.
Had they been known, these would have had a negative profit effect of around €2.6m in Carbury's 2003 financial statements, Donegal's statement said. This in turn would have knocked just under €1.4m off Donegal's profits.
Donegal chairman Lexie Tinney said the company's directors regretted the delay in issuing the 2004 results and the emergence of an adjustment to its previously reported 2003 results. 'These issues are symptomatic of the wider issues that we experienced with our mushroom business in recent years and we can assure shareholders that, following the merger with Monaghan, the mushroom business is on a sounder footing and issues like these are not going to recur,' he added.
