DCC trading statement positive

DCC share forecasts were upgraded yesterday after the firm issued a very positive trading statement.

Davy analyst Florence O’Donoghue said that the positive news from DCC in recent days prompted Davy to revise its forecasts upwards for the year to the end of March 2005.

“Firstly, there was the group’s acquisition of Bottle Green, which marks its entry into the UK wine market. Secondly, there was the positive AGM trading update. The stock has enjoyed a decent run since its results in May, although it has only performed in line with the Irish market over the last 12 months.

“We still think that the share price has further to run. This is reflected in our €17 price target which implies upside of almost 15% from current levels.

“This price target is more than backed up by a conservative discounted cash flow analysis. Further positive newsflow - acquisition activity being the most obvious - can drive the stock towards the €17 mark by the end of the year,” Mr O’Donoghue predicted.

Marketing and distribution group DCC said it that had performed well in its first quarter and was well-positioned to meet market expectations for its financial year to the end of March 2005.

In its annual statement the company, which has IT, healthcare, food & beverages, and energy divisions, also said it was “aggressively pursuing” organic and acquisition growth.

DCC, which had sales last year of €2.2 billion, said it had achieved particularly strong growth in its IT distribution, healthcare and environmental divisions.

Its food and beverages unit had achieved “modest profit growth”, it said, while its homebuilding and supply chain management operations were well ahead of the same period the previous year.

DCC CEO Jim Flavin, who set up the Dublin-based company in 1976 after working as a venture capitalist, also said the company plans to make “a number of acquisitions” in its current financial year.