Minor headwinds for DCC
Distribution company set to benefit from robust gaming console sales
Energy and distribution group DCC will today publish its interim management statement for the three months to the end of December. DCC, which last year moved its listing from Dublin to London, previously guided 15 per cent growth in group operating profits.
With average UK temperatures for October to December some 1°C warmer than a year ago, DCC’s energy business (58 per cent of group profits) is likely to have experienced a more challenging backdrop relative to a year ago, according to Goodbody stockbrokers.
However, DCC Energy is expected to further benefit from the realisation of synergies from previous acquisitions (the former Total oil distribution business and UK BP LPG distribution business).
Goodbody analyst David O’Brien said SerCom, which contributes 21 per cent of group profits, “is expected to maintain the robust performance we have been accustomed to over the last five years”.
Davy stockbrokers said commentary from DCC SerCom peers suggests that trading during the Christmas holiday period was good. A new generation of gaming consoles was launched and sales appear robust. Microsoft reported (quarter-end December 2013) strong Xbox sales with revenue increasing 54 per cent.
“We have also heard encouraging commentary regarding holiday season sales from retailers such as Dixons Retail and Home Retail Group. For the 18 weeks to January 4th, Argos saw like-for-like sales up 3.8 per cent,” Davy said.