Boost for DCC on growth outlook

Second-half earnings, an upbeat outlook for 2017, and an acquisition of a gas supplier in France helped shares in DCC to rally after a recent rout.

Shares in the expanding diversified group had gained 10% since the start of the year but have been hit in recent weeks.

Its activities span energy, healthcare, technology, and environmental activities. 

Now, its operating profits having climbed by a third to £117.8m (€136.6m) on revenues which had advanced by 5.1% to £1.47bn showed the firm was trading above expectations, analysts said. 

Shares in the London-listed DCC rose almost 4% to £62.55, boosting its stock- market value to £5.63bn.

“The group expects that both operating profit and adjusted earnings per share for the year ending March 31, 2017, will be significantly ahead of the prior year and ahead of current market consensus,” DCC said.

The French acquisition involves it paying in cash £96m (€110m) for most of the shares of Gaz Europeen, which distributes liquefied petroleum gas. DCC already owns Butagaz and will need French regulatory clearance to complete the deal.

Davy Stockbrokers raised its price target to £75 from £72, while Merrion Capital said “supported by excellent performances across each of the group’s divisions” that DCC was “positioned to drive further growth”.

“The group continues to have ambition and capacity for further development and importantly, as DCC increases in scale and geographic reach, also has the opportunity to build substantial market positions in its chosen sectors,” said chief executive officer Tommy Breen.


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