DCC trading ahead of budget

Support services group DCC has reiterated its full-year guidance after benefiting from “a solid start” to its current financial year.

In a trading update issued yesterday to coincide with the group’s AGM in Dublin, DCC said overall trading was “ahead of budget” in its first quarter, which comprises the three months to the end of June.

The company said it achieved good operating profit growth, on a constant currency basis, for its first quarter.

It also said DCC Energy — the group’s largest division which accounts for 45% of overall profits — benefited from more favourable weather conditions than in the previous year, something which allowed the unit to generate good organic volume growth and trade ahead of both the prior year and budget.

In May, DCC reported a set of full-year financial figures to the end of March showing its first profit decline since it became a public company in the mid-1990s.

Despite that, shareholders yesterday voted in favour of a 5% increase in annual dividend payment, which management said was a reflection of its confidence in the business.

Chairman Michael Buckley told shareholders yesterday that the board is “determined to get back to a strong long-term growth path this year”, adding that the business is in a “very strong” cash position.

Chief executive Tommy Breen said DCC’s strategy hasn’t changed and that it will continue to extend its geographical footprint through acquisition.

He said the energy part of the business is in better shape than it was a year ago.

Management is anticipating an increase of 15% in both operating profit and earnings per share — on a constant currency basis — in its current financial year.