DCC ahead of expectations in first quarter
International marketing, distribution and business support services company DCC issued an interim management statement ahead of its AGM in Dublin, at 1100 BST on Friday.
It said overall group operating profit for the first quarter ended 30 June was significantly ahead of the prior year, and modestly ahead of expectations, driven by the performance of DCC Energy which benefited from acquisitions completed in the prior year, and also from strong organic operating profit growth.
“Trading in each of DCC Healthcare, DCC Technology and DCC Environmental was ahead of the prior year and in line with expectations,” the board said in the statement.
“DCC Technology benefitted from cost saving initiatives implemented in the prior year and the first time contribution from the acquisition of CUC.”
The company’s board said its profits are significantly weighted towards the second half of its financial year.
“At what is still a very early stage in the financial year, the Group reiterates its belief that the year ending 31 March 2017 will be another year of profit growth and development,” it explained.
DCC said the UK’s decision in the recent referendum to leave the European Union is not expected to have any material direct impact on DCC’s business as the group has relatively little cross-border trade.
It said presently almost 50% of the group’s operating profits are generated outside the UK and so its reported operating profit will benefit modestly from favourable translation should sterling remain at current values, or depreciate further.
“As previously announced on 23 March 2016, DCC Energy has agreed to acquire Dansk Fuels, a retail, aviation and commercial fuels business in Denmark, formerly owned by Shell,” the board added.
“The proposed acquisition is proceeding in line with expectations and recently received clearance from the EU Commission.
“The acquisition is expected to complete in the second half of calendar 2016,” it said.
DCC said it remains ambitious to continue the growth and development of its business, with a strong equity base and a strong and liquid balance sheet leaving it “well-placed” to continue to grow in new and existing geographies.
The company is due to announce its interim results for the six months to 30 September on 14 November.