DONEGAL CREAMERIES is unlikely to acquire Highland Radio from Denis O'Brien, the company told The Irish Timesyesterday.

"There were certain aspects of Highland that were attractive to us, but I don't think it is going to happen," said Tony Hanlon, Donegal Creameries' finance director.

It is understood it is not prepared to match the valuation placed on Highland. Communicorp, Mr O'Brien's radio investment vehicle, is believed to be seeking bids of €10 million or more for Highland, which it acquired in a €200 million deal with Emap that also included Today FM and FM104.

Mr O'Brien has since offloaded FM104 to UTV for €52 million. Mr Hanlon said Donegal Creameries looked at Highland in the context of diversifying its interests in Co Donegal. "We will look at local businesses and see if they can add value to our company," he said.

Donegal Creameries yesterday published full-year results, which showed that turnover rose by 12 per cent to €125.6 million in the year to the end of December, boosted by rising milk prices globally, and good results from its Irish Potato Marketing arm.

Its after-tax profit more than doubled to €10 million last year from €4 million in 2006. This included a gain of €7.3 million from property revaluations.

This gain was offset by a loss of €1.5 million from the disposal of its confectionery business. Mr Hanlon said its investment properties are valued on its balance sheet at €36.9 million. This includes its six-acre head office site in Letterkenny. It has applied for permission to build a three-storey retail and office complex on two acres of this site.

Donegal Creameries launched an estate agency business last year and increased its investment in Monaghan Mushrooms to 35 per cent. Dairy turnover rose by 22 per cent last year to €59.3 million, while profitability grew by €1 million. Revenues from its agribusiness unit increased by 4.1 per cent to €66.4 million.

Shares in Donegal Creameries, which are traded on the IEX , rose by 0.8 per cent yesterday to €6.10.