DCC share price: Acquisitions boost full-year profits

on May 17, 2016
Updated: Oct 21, 2019

DCC (LON:DCC) has updated investors on its full-year performance this morning.

**Highlights from the company statement:**
Group revenue
Volumes in DCC Energy increased by 18.7%, primarily driven by the first time contribution from the Esso Retail business in France. On a like-for-like basis, volumes were very modestly behind the prior year, largely due to the adverse impact of the milder winter weather conditions. DCC Energy’s revenue declined by 1.4% (1.5% ahead on a constant currency basis) with average selling prices per litre reducing by 16.9%, due to the impact of lower oil prices.

Excluding DCC Energy, revenue from continuing operations was up 3.5% (5.6% up on a constant currency basis).

Consequently, Group revenue from continuing operations was flat year on year (2.6% ahead on a constant currency basis) at £10.6 billion, primarily reflecting the impact of lower oil prices.

Group operating profit
Group operating profit from continuing operations increased by 35.5% to £300.5 million (40.0% on a constant currency basis), driven predominantly by acquisitions completed during the year. The average euro/sterling translation rate for the year of 0.7301 was 7.5% lower than the average of 0.7890 in the prior year.

Operating profit in DCC Energy, the Group’s largest division, was 71.9% ahead of the prior year (79.6% ahead on a constant currency basis), largely driven by the significant acquisitions completed during the year of Butagaz, Esso Retail France and DLG, all of which traded at, or ahead of, expectations. Although DCC Energy was adversely impacted by the relatively mild winter weather conditions, a good margin and cost performance was achieved.

Operating profit in DCC Healthcare was 13.5% ahead of the prior year and approximately two thirds of this growth was organic. DCC Healthcare benefitted from an improved sales mix and good cost control in DCC Vital and also from a strong performance in DCC Health & Beauty Solutions, where strong organic profit growth was complemented by the first time contribution from Design Plus.

Operating profit in DCC Technology declined by 28.8% due to the weak performance of its UK business, despite good growth in the Irish, Continental European and Supply Chain Services businesses. As previously reported, the UK business was adversely impacted by a reduction in sales of products from one large supplier, particularly in the first half of the year, and also by weaker than anticipated demand for tablet computing, smartphone and gaming products.

DCC Environmental achieved very strong organic profit growth, with operating profit increasing to £15.2 million, 14.2% ahead of the prior year.
The Board is recommending an increase of 15% in the final dividend to 64.18 pence per share, which, when added to the interim dividend of 33.04 pence per share, gives a total dividend for the year of 97.22 pence per share. This represents a 15% increase over the total prior year dividend of 84.54 pence per share. The dividend is covered 2.6 times by adjusted earnings per share (2.5 times in 2015). It is proposed to pay the final dividend on 21 July 2016 to shareholders on the register at the close of business on 27 May 2016.
The Group expects that the year ending 31 March 2017 will be another year of profit growth and development.
As of 07:12 BST, Tuesday, 17 May, DCC PLC ORD EUR0.25 share price is 6,150.00p.