DCC strikes positive note as first-half results beat expectations

DCC has become slightly more upbeat regarding its full-year outlook on the back of a better-than-expected first-half showing.

Where previous guidance was for full-year operating profits (up to the end of March) to be slightly down on the previous year, the multi-disciplined business support services group said yesterday, that profits (on a constant currency basis) now should be broadly in line with last year, representing a modest improvement in outlook. Management stressed however, that given the state of the sterling/euro exchange rate, it would still see full-year earnings per share being 5%-10% down on a like-for-like basis.

The slightly revised outlook comes on the back of DCC’s latest set of interim results, for the six months to the end of September.

Pre-tax profit for the period (before exceptional items) was up by 1.6% (9.6% on a constant currency basis) at €51.4m. After exceptionals, pre-tax profit amounted to €44.3m.

Group operating profit was up 0.9% (on a constant currency basis) at €56.6m, while group revenue was down 4.3% at €2.8 billion. There was also an 8.7% fall in adjusted earnings per share to 50.07c and a 5% rise in the interim dividend to 23.74c.

On a divisional basis however, only Energy and the Sercom IT business showed operating profit gains on the same period last year. The group’s share price gained 24c yesterday, to close at €19.61.

DCC also announced the second acquisition via its Energy division in as many weeks, yesterday – through the €18.3m purchase of fuel distribution business, Shell Direct Austria from Shell Austria.

With regard to further growth, group chief executive Tommy Breen said that more bolt-on acquisitions were likely but as much organic growth as possible from existing divisions was also being targeted.

He added that on a geographical basis, the group would like a further foothold in continental Europe but viewed Britain as the market where profits could grow the most in the next few years.