DCC set to land €23m damages boost

MARKETING and distribution specialist DCC took a step closer to landing a €23 million windfall yesterday when a court in Taiwan ordered a local company to hand over damages awarded last year by a British judge.

But analysts warned shareholders not to hold their breath and predicted further delays before DCC gets its hands on the money, which is the equivalent of around 25c per DCC share.

DCC told the stock exchange yesterday that it had been successful in convincing the Taiwanese court to enforce the damages and costs awarded to it in relation to a contract dispute with Pihsiang Machinery, which once supplied DCC with motorised scooters and similar products.

The dispute, which began in 2002, hurt DCC’s British healthcare division as it was forced to source alternative products elsewhere.

The decision announced yesterday upheld the award made by the British court which originally adjudicated on the case in January 2004.

The court said that the company, together with its chairman and major shareholder Donald Wu and his wife Jenny, were jointly and severally liable to pay €20.5m in damages and costs, together with interest of €2.6m, to DCC.

But the court also gave them leave to appeal the decision. Davy Stockbrokers analyst Florence O’Donoghue said the decision was positive for DCC but that the affair had been drawn out and was likely to be further delayed by appeal.

Pihsiang Machinery, which is listed on the Taiwan Stock Exchange, has a market capitalisation of approximately €214m.

But DCC has decided against recognising the payment in its accounts until it is more certain that the money will eventually be handed over.

DCC shares were 2.5% lower yesterday.