DCC posts 8.8% profit rise despite earnings fall

Ian Guider

The company said yesterday that profits for the year ended March 31 were E131.5 million.

This figure excludes the 16m hit the company took in January for the restructuring of its SerCom printing division. DCC closed SerCom's Dublin facility with the loss of 220 jobs.

DCC chief executive Jim Flavin said all but one of the company's divisions energy, healthcare, food, environment and IT distribution had seen sales grow during the year.

However, severe price deflation in the computer market hit results at its IT distribution arm. This knocked profits by almost 12% to E27.5m, even though sales rose 2.2% to E878m.

Group sales for the year were up by nearly 25% to E2.7 billion. At pre-tax level, DCC made E99.9m, up just E300,000 on the previous year.

The largest division, fuel distribution, saw its sales grow by 47% to E1.24bn with operating profits rising by 12% to E47.2m.

Sales at its healthcare arm rose 14.6% to E170.7m with operating profits growing 18% to E16.1m.

The food and beverage arms, which include Robt Roberts coffee, Kelkin health foods, Kylemore cafés and wine distribution, enjoyed a 42% boost in sales to E243m and a 21% surge in profits to E13.2m.

The environmental business, which consists of water waste and chemical treatment plants, saw a 7% rise in turnover to E25.8m and profits up by E500,000 to E5.5m.

Manor Park Homebuilders, in which DCC has a 49% stake, contributed E19m to operating profits.

DCC spent heavily on legal fees last year, fighting the insider dealing action taken again the company by Fyffes and on a successful lawsuit it brought against a former supplier in Taiwan.

The company did not detail how much it spent on the Fyffes case, which has been going on since last December. The case is expected to continue until the end of the legal year in July. A ruling by Ms Justice Mary Laffoy is not expected before October.

Shareholders will see the dividend rise by 15% to 37.26 cent per share. Mr Flavin also held out the prospect of further share buy-backs by the company this year.