Irish distribution and services conglomerate DCC said it continued to see growth in the first quarter of the financial year, with group operating profit ahead and acquisitions driving growth in its energy division.
In a trading update for the three month period ended June 30th, DCC said operating profit overall was “modestly ahead” of the same period in the previous year, with growth recorded in DCC Energy and DCC Healthcare. DCC Technology saw operating profit fall slightly year on year.
The first quarter of the year is seasonally less significant for the company, and it expects the financial year will show strong operating profit growth.
It is also expected to see continued development activity during the year, with approximately £65 million committed to new acquisitions since it announced its results in May. That includes the DCC Energy acquisition of fleet telematics business Cubo this month, and the completion of the Wirsol Roof Solutions deal, an expert in solar photovoltaic (PV) and battery storage.
The energy division also completed the acquisitions of Next Energy, Secundo Photovoltaik, and Copropriétés Diagnostic in the first quarter of the financial year, and sold a majority stake in its liquid gas business in Hong Kong and Macau to Citadel Pacific.
The latter transaction saw DCC receive $105 million (€96.9 million) in cash, with the balance of the $150 million paid by a retained minority stake in the combined operations, which will operate under both the Shell and Exxon brands.
“The disposal brings further strategic and geographic focus to DCC Energy as we implement our Cleaner Energy in Your Power strategy,” said chief executive Donal Murphy.
In a note, Davy analyst Colin Grant said there was stronger growth potential in DCC’s acquisitions across its core markets in Europe and North America.
“This is a positive development given the focus of DCC Energy is on the opportunity in services and renewables in Europe and the consolidation of liquid gas in North America. It shows that DCC recycles capital to higher growth parts of its portfolio when it makes strategic sense,” he said.
DCC is holding its annual general meeting later on Thursday. The company has also appointed former Brenntag chief executive Steve Holland as a non-executive director, which will take effect later today.
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