Upbeat DCC shares up 3%

David Clerkin

Chief executive Jim Flavin said the company had performed in line with expectations in the three months to June but that current trading patterns meant the full-year outturn would be at least 10% ahead of the previous year.

There was no comment at the AGM on the long-running alleged insider trading case taken by fruit importer Fyffes, which could cost DCC in the region of E80 million if it loses.

One shareholder questioned whether the company should provide for a potential bill in its accounts but was told the board had decided against such a move.

Mr Flavin predicted strong growth in DCC’s energy, healthcare, food and beverage and environmental divisions, but said the IT distribution unit would hold back the group’s overall performance.

But he was upbeat on the longer-term outlook for the division and said its second-half performance would show a return to profit growth. Sales volumes had held up, he said, but revenues were suffering from aggressive price cuts stemming from a price war between industry heavyweights HP and Dell.

The company also announced two acquisitions in Britain yesterday. It boosted its healthcare portfolio with an E8.5m deal to take a controlling interest in Physio-Med Services, a Derbyshire-based supplier of products used in physiotherapy that employs 70.

The company’s energy division also paid out E3.3m to acquire Brett Fuels, an oil distributor based in Newcastle.

Mr Flavin poured cold water on speculation that DCC would be a bidder for Shell’s network of petrol stations in Ireland.

Mr Flavin told shareholders that Britain, which accounts for 53% of profits, would be the main focus for acquisitions.

Ireland contributes 46% of the company’s bottom line. Mr Flavin said acquisitions in continental Europe were also on the radar but were considered more difficult to execute well. He also told shareholders there were no near-term plans to for corporate activity in America.