DCC’s shares soared in London on Wednesday as the former conglomerate issued a reassuring update and signalled signs of improvement in its technology unit, which it plans to sell by the end of this year to focus on profiting from the energy transition.
The Dublin-based company said operating profit for its financial third quarter to December “grew strongly” as the group benefited from the contribution of an Austrian liquid gas distribution business acquired in November.
DCC’s technology unit also returned to growth during the quarter after a “difficult first half” for the business in North America.
The group, led by chief executive Donal Murphy, said it continues to expect that the year ending in March “will be a year of good operating profit growth on a continuing basis, significant strategic progress and ongoing development activity”.
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Shares in DCC closed 8 per cent higher in London at £51.10, giving it a market capitalisation of £4.3 billion (€5 billion)
The trading update follows a period of share weakness following the group’s completion a £600 million share buyback – by way of a so-called tender offer – in December after finalising the sale of its healthcare unit months earlier. This reduced the group’s number of shares in issue by about 12 per cent and raised concerns about its future within the FTSE 100.
“Recent share price weakness, likely due to the aftermath of the December tender offer and positioning ahead of potential index changes, had raised some concerns over current trading – where our and consensus estimates do require a stronger second-half performance,” said Kenneth Rumph, an analyst with Goodbody Stockbrokers. “This robust statement ought to reassure.”
DCC announced in late 2024 that it was abandoning its conglomerate roots with a plan to sell its healthcare division and review “strategic options” for its technology business as it focuses on the energy sector. It has since confirmed that it plans to sell the technology division, having sold off part of that business last year.
“In the 14 months since this announcement, we have made significant progress with the sale of DCC Healthcare, the return of capital following that divestment and the disposal of our info tech business,” it said.
The group said DCC Energy delivered strong operating profit growth in the third quarter.
“Our largest business, Solutions, recorded good operating profit growth, driven by a strong performance in Energy Products,” it said.
“This was offset somewhat by challenging trading conditions for Energy Services in the UK,” it said.
DCC said it had now committed approximately £100 million to acquisitions since the prior year final results in May 2025.
In the financial year ending March 2025, DCC generated revenues of £16.1 billion and adjusted operating profit of £609.7 million on continuing operations. The consensus call among analysts is that this will grow to £622 for the current year.
“We believe that the stock is now at, or close to, a vital inflection point,” said Colin Grant, an analyst with Davy. “The balance of risk to forecasts is moving to the upside, and this has the potential to trigger a sharp re-rating.”
A re-rating occurs when investors are willing to pay more for shares in a company, relative to earnings.
