DCC pre-tax profits rise nearly 20%

DCC, whose activities range from energy distribution to healthcare products, has delivered a near 20% rise in pre-tax profits, or 27% on a constant currency basis, to €164.9 million.

In what the group said was an “excellent year”, it identified its energy division, boosted by the severe winter conditions, as its top performer over the 12 months.

Total group sales, at €6.72 billion, rose 10.8%, while operating profits were up by 6.9%, to €192.8m.

The results cover the year to the end of March 2010.

DCC Energy, the group’s largest division, saw another year of operating profit growth, driven by significant development activity in Britain and continental Europe. DCC said its energy division saw revenues rise by 13.7%, on a constant currency basis, to €4.42bn.

Operating profits increased by 19.6%, to €113.1m, as the business benefited from the successful integration of recent acquisitions and another particularly severe winter.

Apart from the solid showing by the energy division, DCC Sercom, which distributes IT and entertainment products, did well due to a robust performance in its British distribution arm.

Healthcare, a good performer for the group in the past, made a good recovery at the operating level, with operating profits up by 26.6%, to €21.1m.

The group’s food/beverages and environmental divisions under-performed and operating profits declined during the 12 months. Conditions for the food and beverages operations were “extremely challenging” and sales fell 8.4%, to €275m, and operating profits were off almost 30%, at €8.5m.

A final dividend of 43.70 cent per share has been declared, an increase of 10% on the second half of the previous year, bringing the total dividend to 67.44 cent per share.

As it continued to expand last year, the group spent close to €170m on a number of energy deals.

NCB Stockbrokers yesterday reiterated its buy recommendation on the shares.

“The group continues to deliver impressive results with ROCE (Return on Capital Employed) increasing to 18.4% from 17.8%.”

In the year to date the stock has under-performed the market by 7% “which we believe is unjustified”, it said.

Meanwhile, the group said the uncertain economic outlook and the likelihood of less severe weather patterns makes it harder to predict the outcome for the year, group chief executive Tommy Breen said.

DCC shares, up 1.7%, to €18.89, at one point in Dublin yesterday, slipped back to €18.50, a fall of 8 cent, or 0.43%, on the day.