DCC ups guidance after ‘strong start’

DCC has significantly upped its earnings guidance for its current financial year, on the back of what management has called a strong start to the period.

The Dublin-headquartered support services giant said yesterday — via a trading update coinciding with its AGM — overall group trading for its first quarter, the three months to the end of June, was “well ahead” of both the prior year’s comparison and group budget.

While noting that due, mainly to the seasonal nature of trading for both the DCC Energy and DCC SerCom divisions, the first half usually represents less than 15% of overall group annual profit; the group said “it is pleasing that DCC has traded well ahead of its expectations in the first quarter”.

Accordingly, the group’s management has upgraded its full-year outlook for operating profit growth — from the previous 10%-12% range to a 15% increase.

In terms of divisional breakdown, DCC said its largest unit, DCC Energy, traded “significantly ahead” of prior year and budget, during the first quarter, with the business benefiting from colder than normal weather conditions, acquisitions, and good organic volume growth.

DCC’s second largest division, SerCom, also beat expectations. The group’s two smallest divisions — DCC Environmental and DCC Food & Beverage — both traded “broadly in line with budget”. However, the DCC Healthcare division was “well ahead” of the same period last year, benefiting partially from the acquisition of Britain’s Kent Pharmaceuticals.

“At what is still a very early stage in its financial year — particularly given that operating profit is significantly weighted towards the second half — the out-performance in the first quarter has enabled the group to increase its guidance for the year to Mar 31, 2014, from that previously outlined in its preliminary results announcement [in May],” the statement said.