DCC reports strong first half performance

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DCC (LON:DCC), the leading international sales, marketing and support services group, has announced its results for the six months ended 30 September 2019.

Highlights	2019	2018	% change
Revenue	£7.312bn	£7.418bn	-1.4%
Adjusted operating profit^1,2	£162.6m	£141.9m	+14.5%
DCC LPG	£49.0m	£40.9m	+19.8%
DCC Retail & Oil	£59.7m	£56.3m	+6.0%
DCC Technology	£25.4m	£17.8m	+42.6%
DCC Healthcare	£28.5m	£26.9m	+5.8%
Adjusted earnings per share^{^1,2}	110.2p	107.1p	+3.0%
Interim dividend	49.48p	44.98p	+10.0%
Operating cash flow	£149.9m	£173.2m

· Strong first half performance with Group adjusted operating profit increasing by 14.5% (up 13.7% on a constant currency basis) to £162.6 million, in line with expectations. All divisions recording good profit growth in the seasonally less significant first half of the year.

· Adjusted earnings per share up 3.0% to 110.2 pence, reflecting strong earnings growth being offset by the increased number of shares in issue following the equity placing in the prior year.

· Interim dividend increased by 10% to 49.5 pence per share.

· The Group continues to be active from a development perspective and has today separately announced the recent acquisition by DCC Healthcare of Ion Laboratories Inc, a Florida-based contract manufacturer of nutritional products for an enterprise value of approximately $60 million. The acquisition represents a significant step in DCC Healthcare’s strategy to build a material presence in the attractive US health supplements and nutritional products market.

· The Group balance sheet at 30 September 2019 remains very strong and liquid, with net debt (excluding lease creditors) of £245.3 million, which will facilitate further development activity for the Group.

· Notwithstanding the continuing uncertain macroeconomic outlook impacting the UK economy, and the Technology business in particular, the Group believes that the year ending 31 March 2020 will be another year of good operating profit growth and further development and will be broadly in line with current market consensus expectations.

¹ The current financial period includes the impact of the adoption of IFRS 16 Leases; the comparatives have not been restated in accordance with transitional guidelines.

² Excluding net exceptionals and amortisation of intangible assets.

Commenting on the results, Donal Murphy, Chief Executive, said:
“I am pleased to report that the first half of the year has been another period of good growth and development for DCC. The business has performed strongly, with Group operating profit well ahead of the prior year and all divisions delivering good profit growth, despite the more difficult economic and market backdrop, particularly in the UK.
DCC Healthcare’s acquisition of Ion Laboratories Inc in the US is a material step in the division’s strategy to build a business of scale in the world’s largest health supplements and nutritional products market. The US market is highly innovative, fragmented and growing strongly and, we believe, presents an exciting opportunity for the Group to develop, both organically and through acquisition, a leading market position in this attractive market.
The Group’s significant development in recent years has resulted in DCC having the platforms, opportunities and capability to build the Group into a global leader in its chosen sectors.
Notwithstanding the continuing uncertain macroeconomic outlook impacting the UK economy, and the Technology business in particular, the Group believes that the year ending 31 March 2020 will be another year of good operating profit growth and further development and will be broadly in line with current market consensus expectations.”

Presentation of results and dial-in / webcast facility

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There will be a presentation of these results to analysts and fund managers at 9.00 am today in the London Stock Exchange. The slides for this presentation can be downloaded from DCC’s website, www.dcc.ie.