DCC expects jump in profits

DCC has slightly upgraded its outlook for its current financial year, by saying it now expects operating profits to be up by 5% to 10% for the 12 months to the end of March.

That year-on-year profit jump marks a significant improvement on the group’s previous outlook in November. At that point DCC’s management said operating profits for the current year would be broadly in line with the €180.4m generated last year.

Yesterday’s trading update did warn that exchange rate volatility affecting the amount of the group’s profits which are measured in sterling would result in both operating profit and adjusted earnings per share being modestly ahead of the previous year, on a reported basis, when translated back into euro.

For the three months to the end of December – DCC’s third quarter – the group said it had achieved strong revenue and operating profit growth on a constant currency basis.

Revenue growth was “modestly ahead of the prior year” and operating profit was in line on a reported basis, taking into account the weak sterling- euro exchange rate.

“Trading in January was excellent, driven by favourable weather conditions for DCC Energy and a good performance in SerCom Distribution,” the update added.

DCC’s full-year results are set to be published on May 18. The group’s share price rose yesterday by nearly 2%, or 35c, to €20.40.

Last month, on announcing the reorganisation of its British-based waste management and recycling subsidiaries, under the DCC Environmental Britain banner, the group said it will be looking to grow aggressively in Britain’s waste management services sector over the next few years.

Yesterday, the group said its capital expenditure total in the last quarter amounted to €6m.