DCC says operating profit ‘significantly ahead’

Energy-to-technologies conglomerate DCC has said group operating profit in its third quarter was "significantly ahead" of the same period a year earlier

In an interim statement issued on Thursday, which did not give include a breakdown of figures , DCC said it continues to expect that both operating profit and adjusted earnings per share will be way ahead of last year and in line with current market consensus.

The London-listed group reported “excellent growth” in operating profit in its energy, healthcare and environmental divisions in the third quarter. However, the company said its technology unit experienced more difficult trading conditions.

Operating profit in DCC Energy was very significantly ahead of the prior year, despite the milder winter weather conditions, it said. The group's recent acquisitions - Esso Retail France and Butagaz - performed either in line with, or modestly ahead of expectations., DCC said.

The cash outflow on acquisitions completed in the nine months to the end of December (which includes Butagaz and Esso Retail France), inclusive of a net movement in deferred and contingent acquisition consideration, was £385 million. Total committed acquisition expenditure in the nine months was £39 million.

DCC said late last year it could swallow acquisitions of up to £400 million annually without having to tap extra funding.

The group said while overall heating-related volumes were held back by the mild temperatures in the third quarter, a good margin and cost performance was achieved in its energy division.

The group said its healthcare unit traded well during the three month period, benefitting from a “very strong performance from DCC Health & Beauty Solutions” and a continued improvement in sales cost control in DCC Vital.

Operating profit in DCC Environmental was also strongly ahead of the prior year, but the technology unit’s performance was affected by reduced demand for tablet, smartphone and gaming products, the group said.

“DCC remains ambitious to continue the growth and development of its business in existing and new geographies and retains a strong, well-funded and liquid balance sheet,” it said.