DCC, the distribution group, would spend some £50 million (€63 million) of its net cash reserves on acquisitions which strengthen its existing businesses and further investment in its IT subsidiaries, Mr Jim Flavin, chief executive and deputy chairman said yesterday.

Speaking after the group's a.g.m., he said the DCC Group - which received a massive fillip in cash reserves from a €106.7 million sale of its equity stake in Fyffes earlier this year - was focused on bolt-on acquisitions which would improve shareholder value.

He said DCC had ambitious plans for growth in continental Europe and Britain in areas such as healthcare and information technology. Acquisitions in the energy and food side of the business were more likely in the local market, he added.

"These (bolt-on acquisitions) are the sort of deals which raise shareholder value . . . although we wouldn't mind a show stopper if we could find one," he said.

Earlier, Mr Flavin told shareholders first quarter trading for the current year had been "very strong" and the group was in an "immensely strong financial position".

He said there was excellent profit growth in its IT distribution business, SerCom Distribution, in the first quarter. Revenue growth for its IT services subsidiary SerCom Services was in line with expectations, he added.

Energy sales volumes and profits were substantially up in what were seasonally less important months. Healthcare had also started the year very well with particularly strong profit growth in mobility and rehab and in nutraceuticals, he added.

Profit growth in the food division had been more modest in the first half of the year due to currency fluctuations and the weakness in the euro, said Mr Flavin. However, this was expected to improve in the second half of the year.

Mr Flavin said DCC's sale of its 10.2 per cent stake in Fyffes was timely and part of an exit strategy considered over a number of years. In February DCC sold its shares at a price close to a record high of €3.98 and shortly before a profit warning and a massive slump in share value. Shares in Fyffes closed yesterday at €1.10, up two cents.

One shareholder at the meeting asked Mr Flavin if DCC would consider re-investing in Fyffes to help the company re-establish itself following a slump its share price. Mr Flavin said there were no plans to buy back into the company.