DCC share price slip despite strong first half

Shares in DCC slipped by as much as 3% yesterday despite the group posting strong annual earnings for 2016 and forecasting further good growth this year.

DCC share price slip despite strong first half

The Dublin-based support services group reported a 9% rise in revenues to just under £3.2bn (€3.7bn), for the 12 months to the end of March, and a 21% rise in total operating profit — before exceptional items — to £363.6m.

Excluding the environmental services division — the agreed disposal of which was announced last month — group operating profit was still 20.9% ahead at £345m. Adjusted earnings per share closed the year at 303.7p, 18.1% up on the previous 12 months.

“The results reflect the continued successful execution of our strategy in significantly growing our operating profits, converting those profits into cash and redeploying capital into our energy, healthcare and technology businesses,” said outgoing CEO Tommy Breen.

Last month, DCC announced that Mr Breen will retire in July after which he will be replaced as chief executive by Donal Murphy, current head of DCC’s energy division.

In the interim results, DCC said it expects to see “another year of profit growth and development” in the 12 months to the end of next March, reiterating that it has the capacity and opportunity for further development.

The last four months have seen three large acquisitions — including the recent agreement to buy Shell’s commercial fuel business in Hong Kong and Macau; the €140m deal marking DCC’s first expansion in the energy services market outside of Europe. More Asian-based deals are expected.

The group’s shares pared much of their losses in later trading.

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