DCC records first-half operating profits of €62m

Acquisitions helped to drive revenue growth at DCC in the first half of its financial year, which yielded operating profits of €62 million.

Distribution and marketing specialist DCC reported yesterday that revenues grew 42 per cent to €6.1 billion in the six months to September 30th, the first half of its financial year.

Operating profits rose 9 per cent to €62.4 million in the same period. Earnings per share came in 12 per cent ahead at 52.24 cent.

Profits before tax and exceptional items during the first half were up almost 7 per cent at €53.4 million from €50 million during the same period in 2011.

DCC said that businesses bought by the group were responsible for about 80 per cent of its revenue growth during the first half.

Commenting on the results, chief executive Tommy Breen said that operating profits and earnings per share were slightly ahead of budget.

He added that DCC is sticking to guidance given on March 31st that both would be about 20 per cent of the 2011-2012 financial year, when operating profits were €185 million.

The company is proposing to pay shareholders an interim dividend of 29.48 cent a share, a 7.5 per cent increase on last year.

Mild weather

DCC’s biggest division is home heating oil distribution. Last year’s mild winter weather hit profits and and earnings in this business.

Mr Breen warned that any guidance given for the current financial year is based on a return to “more normal winter temperatures”.

The group spent €133 million on acquisitions during its first half. Most of its purchases were in the energy business.

The three biggest deals accounted for about €100 million and included an agreement to buy BP’s liquid petroleum gas (LPG) distribution business in Britain. That purchase is subject to approval by the country’s competition regulator.

In a separate acquisition, it also bought BP’s LPG distribution operation in the Netherlands and northern Belgium.

It followed this with the purchase of the goodwill and assets of a similar business in Scandinavia from Norwegian-owned Statoil. DCC energy accounts for about three-quarters of its revenues. The next largest division, DCC Sercom, which distributes consumer electronics, did two small deals during the period, including Netherlands-based Go Telecom.

DCC’s shares rose 1.6 per cent to close at €23.65 in Dublin yesterday on the back of the news.