DCC’s Manor boost comes early

DCC is forecasting double digit growth in its adjusted earnings per share for the firm’s current financial year, which runs to the end of March.

Expectations have been revised upwards due to a higher than expected profit contribution from DCC's residential property associate company, Manor Park Homebuilders.

Manor Park, 49%-owned by DCC, made a significant profit on a transaction completed towards the end of last week, which DCC expected to take place in its next financial year.

Partly because of this Manor Park's profit contribution "may be" materially less during the year to the end of March 2007.

"Planning issues have delayed the commencement of certain housing developments by Manor Park, which will defer some profits to its next financial year," according to an updated trading statement, released yesterday by DCC.

"Based on DCC's current estimate of the profit contribution to the group from Manor Park, in the year to March 31, 2007, DCC's adjusted earnings per share for that year may be approximately 5% below market expectation," the statement continued.

According to DCC chief executive and deputy chairman, Jim Flavin: "The value of DCC's investment in Manor Park has significantly increased over the past year. Manor Park has a large landbank for housing development, and other projects in the pipeline, from which it should earn substantial profits in the future."

Mr Flavin said that he was not in a position to expand on the nature of those future projects, as Manor Park isn't a wholly-owned DCC subsidiary.

"It can be difficult getting your timing right, in terms of forecasts and financial expectations given the nature of the housebuilding and development sector," he added.

Manor Park prides itself on being something of a standard bearer for energy efficient housing in Ireland. Specialising in timber frame houses, it was the first developer to introduce solar panelling to the general house buying market.

The company is currently undertaking four residential development projects Pembroke Wood and Aston Village in Drogheda; Chapel Farm in Lusk and Ongar Village in Ongar, north-west Dublin.

In November, reporting a 4.4% fall in half-year earnings, DCC said that it expected double digit earnings growth in the second-half of its financial year.

The 4.4% drop for the first half-year, a better-than-expected result, was due mainly to tough trading conditions impacting on DCC's SerCom Distribution it's IT and entertainment products division.

The group's share price dipped slightly yesterday afternoon by 0.89% to €19.03.