DCC chief executive Tommy Breen revealed on Wednesday he is retiring after nine years at the helm, as the fuel distribution-to-technology sales group catapulted itself into the Asian energy market and exited the waste and recycling business.
Mr Breen (58), who has been with the company for more than three decades, said in a phone interview with The Irish Times that he decided to move before reaching the normal retirement date at 60 to get ahead of inevitable speculation.
"It's the beginning of a new era of development and a new phase of growth at DCC. It was the right time to go," said Mr Breen, who is being succeeded by Donal Murphy, who currently head of DCC Energy, the Dublin-based group's largest division.
The development came on a day when DCC's energy unit unveiled a deal to acquire oil giant Shell's liquefied petroleum gas (LPG) business in Hong Kong and Macau for about £120 million (€140 million). DCC also disclosed on Wednesday that it has agreed to sell its environmental business, which treats and recycles hazardous and non-hazardous waste in Britain and Ireland, to UK private firm Exponent for £219 million.
Mr Breen said the Asian energy deal, marking the division’s first foray outside of the European market, will be used as a base for further acquisitions in the region. Analysts at Cantor Fitzgerald said the company may make a move into mainland China and elsewhere in the region.
“We clearly have studied the southeast Asian market and there’s a big and growing market in some areas, particularly in the developing market,” Mr Breen said.
Goodbody Stockbrokers analyst Gerry Hennigan estimates that the acquisitive energy division will make up over 70 per cent of the group’s £355.4 million operating profit for the year to the end of March. By contrast, DCC highlighted that the environmental business, which comprises the Irish hazardous waste company Enva and British firms William Tracey Group, Oakwood Fuels and Wastecycle, represent about 5 per cent of profits.
DCC said that the group’s operating profit for the financial year ended last week would be in line with consensus expectations among analysts, who, on average, are forecasting 20 per cent growth to £360 million.
“Tommy Breen’s most important legacy as he leaves DCC is a continuation of the strategy that has returned 6,000 per cent for shareholders since its initial public offering [in 1994],” said David Holohan, chief investment office at Merrion Capital in Dublin. “He is one of the most successful, yet understated Irish CEOs, with an uncompromising track record of excellence.”
Mr Murphy, who joined the company in 1998 before becoming managing director of the energy division in 2006, said he also plans to grow the other businesses, comprising healthcare and technology, when he takes over.
“We are a diverse group and just because of the fact that I have been running the energy business for the past 10 years doesn’t mean it’s all about energy,” he said.