DCC profits well ahead

Acquisitions made by its core energy division delivered a “significant” annualised jump in first-quarter group profits at DCC.

The Dublin-headquartered, international support-services group yesterday said that overall operating profit for its first quarter — the three months to the end of June — were “significantly ahead” of the corresponding period last year and “modestly” ahead of its own expectations.

Its latest trading update — ahead of the publication of first-half results in November — said the group’s good start to the financial year was driven by the performance of DCC Energy, both organically and through acquisition contribution.

It also said trading in the other divisions — DCC Healthcare, DCC Technology, and DCC Environmental — was ahead, on a year-on-year basis, and in line with management’s expectations.

DCC’s annual profits are considerably weighted towards the second-half of its financial year, but it still expects that the 12 months to the end of next March will represent “another year of profit growth and development”.

The Brexit vote is unlikely to have any huge effect and the group will benefit from a weak sterling, the trading update said.

“The UK’s decision, in the recent referendum, to leave the EU, is not expected to have any material, direct impact on DCC’s business, as the group has relatively little cross-border trade,” management said.

“Presently, almost 50% of the group’s operating profits are generated outside of the UK, and so the group’s reported operating profit would benefit modestly from favourable translation, should sterling remain at current values, or depreciate further,” it added.

DCC said it remained ambitious in its growth plans, and — with “a strong and liquid balance sheet” and “strong equity base” — was well-placed to continue the growth of its business “in existing and new geographies”.

The acquisition of Danish retail, aviation, and commercial fuels business, Dansk Fuels, by DCC Energy — which was first announced in late March — has received European Commission approval and is proceeding “in line with expectations”.

The transaction is expected to be complete before the end of this year.

DCC’s shares were up nearly 0.5%, in London, yesterday.


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