DCC share price: Group updates on third-quarter performance

DCC share price: Group updates on third-quarter performance

DCC (LON:DCC) has updated investors on its recent performance. The company has further inked a deal to acquire Esso’s retail petrol station network in Norway.

**Highlights from the company statements:**
Third quarter ended 31 December 2016
Group operating profit for the third quarter ended 31 December 2016 was strongly ahead of the prior year and in line with expectations.

DCC Energy recorded strong growth in operating profit, benefitting from very strong organic volume growth in LPG and good organic volume growth in both Retail & Fuelcard and Oil. Heating-related volumes were in line with expectations, with the milder weather conditions in the UK offset by colder conditions elsewhere.

DCC Healthcare traded in line with expectations and the prior year, benefiting from a strong organic performance from DCC Health & Beauty Solutions, although DCC Vital was, as anticipated, impacted somewhat by the trading headwind of the weakness in sterling, particularly in pharma products.

Operating profit in DCC Technology was strongly ahead of the prior year, benefitting from the contribution from the CUC acquisition completed during the prior year and also from a strong performance from the UK and Irish business which saw good organic growth in the quarter.

Esso’s retail petrol station network in Norway
Esso’s retail petrol station network in Norway comprises a national network of 142 company-operated sites (127 retail service stations and 15 unmanned stations) and has contracts to supply 108 Esso-branded dealer owned stations (together referred to as “Esso Retail Norway”). Esso Retail Norway sells c. 600 million litres of fuel annually. The majority of the stations are in the more populous south of the country and, of the 142 company-operated sites, 110 are held freehold, with 32 being leasehold.

As part of the transaction DCC Energy will enter into long term brand and supply agreements with Esso Norge AS.

Since December 2015, the convenience retail element of the company-operated sites has been operated by NorgesGruppen, the largest grocery retailer and wholesaler in Norway, under a long term agreement. NorgesGruppen have been rolling out their award-winning “Deli de Luca” retail concept across the network.

Esso Retail Norway will be integrated into DCC Energy’s existing retail IT and operating infrastructure. This infrastructure was developed during 2015 to enable DCC Energy’s integration of the Esso France retail business and has operated the business successfully since completion. Importantly, it was designed to be scalable and facilitate a ‘hub and spoke’ operating model, where key pricing, supply and back office functions can be operated remotely from an operations centre near Dublin, Ireland, enabling the effective and efficient management of the business in conjunction with local management teams. From completion DCC Energy will employ this model for Esso Retail Norway, in conjunction with the local management team who have driven the successful development of the network in recent years.
As of 07:23 GMT, Tuesday, 07 February, DCC PLC ORD EUR0.25 share price is 6,375.00p.

By Michael Catchpole
Michael is a freelance writer with years of experience writing about financial products. During his time reporting for Invezz, Michael focused on the real estate and stock markets.
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