Michael Buckley quiet on rumours of DCC bid for BP Portugal
Trading update reports stronger performance than expected in first quarter
Michael Buckley pictured during the DCC agm at the Four Seasons Hotel on Friday .Photograph: Cyril Byrne
Michael Buckley, the chairman of the conglomerate DCC, declined to comment at the company’s annual general meeting yesterday, when shareholders queried him on whether it had bid for BP’s bottled gas business in Portugal.
“It is not our policy to comment on specific acquisitions,” he said, when a question from the floor referred to speculation in the press.
A recent report in the Portuguese newspaper Jornal de Notícias said DCC was among four bidders for BP’s liquid petroleum gas (LPG) assets there. The other potential buyers identified in the report are Rubis, UGI and Repsol. Portugal is the last remaining country where BP has yet to sell its bottled gas operations.
“The only thing I would say on that is that we have stringent capital discipline,” Mr Buckley told the meeting, indicating that if interested, it was unlikely to be drawn into a bidding war. Market sources pointed out that DCC, which last year spent more than €200 million on acquisitions, rarely paid more than five or six times profits for an asset. DCC reports in sterling since moving its listing to London.
Prior to the agm in Dublin’s Four Seasons hotel, DCC issued a trading update that said its performance was stronger than expected in the first quarter, which ended on June 30th. DCC attributed this to a sales boost for its energy division, brought on by the colder than normal weather a few months ago. It said its energy division was “trading significantly ahead” of last year.
Its Sercom division, which distributes IT equipment and mobile phones, was also trading ahead of last year.
Its healthcare division, which earlier this year absorbed DCC’s €71 million purchase of UK outfit Kent Pharmaceuticals, was also trading “well ahead” of last year. The division had also bought Leonhard Lang UK, a medical devices distributor, for £11 million, the company said.
It highlighted, however, that its first quarter traditionally only represented about 15 per cent of profits. DCC raised its guidance for full-year profits growth from 10 or 12 per cent to 15 per cent ahead of last year’s £187 million. It said it expected earnings per share to climb by 13 per cent.
Speaking to The Irish Times after the agm, DCC chief executive Tommy Breen said the firm had aspirations to grow its energy division beyond Europe. He said it had no particular asset purchases in mind further afield, but it had developed relationships with oil majors that it hoped would bear fruit in future.