DCC records a 14% profit rise in year

DCC, the Irish multi-industry distribution and support services group, has given an upbeat outlook for its current financial year after reporting a 14.2% profit rise and a 40% leap in revenues for the 12 months to the end of March.

The group, which seemingly has its fingers in every pie from healthcare and waste management to the distribution of food products and computer game consoles, saw pre-tax profits rise to €181.7 million and group revenue jump to €5.53 billion for its 2007/08 financial year.

Operating profits rose by 21.8%, on a constant currency basis, to €167.2m and adjusted earnings per share grew by 15% to 56.67c. The traditionally stronger second half of the year saw good performances from each of the group’s five divisions of energy, healthcare, Sercom (its IT wholesale arm), food and beverage and environmental.

At yesterday’s results presentation, DCC executive chairman, Jim Flavin, said that the group has made an excellent start to its financial year and is well positioned to grow further through additional acquisitions — more than likely in the areas of energy and healthcare. DCC spent just under €180m on acquisitions last year, with the lion’s share being invested by its energy division.

Mr Flavin added that the group is budgeting for strong earnings growth of between 12% and 15% in this financial year, on a constant currency basis, but that the current exchange rate levels could impact on the translation of the proportion of DCC’s profits that are sterling-based into euro. That could result in earnings growth of 2%-5%, he said.

DCC also announced yesterday that it is to report to shareholders the findings of its ongoing strategy review — aimed at settling on the best way to manage such a diverse group of businesses — by the middle of next year.

Mr Flavin said: “As a group, we’ve performed well since going public in 1994, but business changes and there’s no guarantee of that always continuing. The diversified model of our group has worked well for us and is continuing to do so, but the model also presents a complex management challenge.

“We have no pre-conceived ideas of what the review will result in and we’ll be very carefully examining each of the businesses in our five divisions in terms of their growth opportunities, their chance of adding shareholder value and our ability to generate shareholder value from them,” he added.

The group’s share price finished the day in Dublin up by 58c — or 3.84% — at €15.68.