Strong first-half growth at DCC

Support services giant DCC has reported strong first half double-digit gains across each of its main growth metrics, leading it to reiterate its profit guidance for the full year.

For the six months to the end of September, the group — whose interests straddle energy, food, healthcare and IT distribution — generated operating profits of £69.4m (€82.5m); up by 38% on a year-on-year basis.

First half revenue rose by just over 11% to £5.42bn, with profits before exceptional items, tax and amortisation ahead by nearly 36% at £58.5m.

The Dublin-headquartered group switched its share listing to London and its reporting currency from euro to sterling earlier this year.

Speaking yesterday, group CEO Tommy Breen said: “It is pleasing to report that operating profit and adjusted earnings per share were significantly ahead of the prior year, albeit in the seasonally less significant first half. This out-performance was driven, mainly, by a particularly strong first quarter.”

Back in July, DCC significantly upped its full year earnings guidance, saying it expected operating profit, for the 12 months to the end of next March, to show growth of 15% instead of the previous 10%-12% guidance.

Management said yesterday it is sticking to its forecast of operating profit growth of 15% for the current year and earnings per share growth of around 13% — with Mr Breen noting that, as the group enters its seasonally more significant second half, full year guidance “continues to be set against the important assumption that there will be normal winter weather conditions”.

Yesterday’s update noted that the group’s two largest divisions — DCC Energy and DCC SerCom (which distributes IT and entertainment products) — traded strongly ahead of the prior year during the first half and are performing strongly into the second half.

The Energy business makes up nearly 57% of DCC’s annual operating profits, with SerCom contributing just over 22%.

The smallest divisions, Environmental and Food & Beverage (around 9% of annual group profit, between them) “traded modestly”.

DCC said it would pay shareholders an interim dividend of 26.12p per share, an annualised rise of 10% in the first half payout.


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