Cold weather boosts DCC

Extreme weather conditions helped DCC achieve strong results in the third quarter, as icy conditions throughout northern Europe drove demand at its energy division.

In an interim management statement this morning, the company said it achieved very strong growth in revenue and operating profit in the quarter ended December 31st 2010.

"With the exceptionally cold weather conditions throughout northern Europe, particularly in the last six weeks of the quarter, customer demand in DCC Energy, DCC's largest division, increased significantly," it said.

Despite poor road conditions and constraints on supply, volumes at DCC Energy rose by 22 per cent, the group said.

DCC last month defended itself from claims that it had inflated bills and "ripped off" oil customers in Britain.

The claims against DCC's British oil distribution business GB Oils were made by the Sunday Times, which alleged the company had billed customers more than they were originally quoted, and had built up a "stranglehold" on the British home heating oil market.

DCC described the allegations as "misleading". The company blamed rises in the price of heating oil on constrained supply due to severe weather, increased demand and higher costs. It denied deliberately overcharging customers.

However, it acknowledged that Carmarthenshire County Council in Wales is looking into complaints concerning GB Oils' business in south Wales that arise from January last year. DCC has denied any fraudulent activity or unfair trading concerning pricing.

Today's interim statement showed the quarter was also significant for DCC's second largest division, Sercom, which distributes and sells computers and related goods in Europe. The group reported good performances in its e-commerce, catalogue and supermarket retail channels, which is partly attributed to the launch of Microsoft's new Kinect controller.

The quarter also saw the first contribution from Comtrade in France. DCC announced in August last year that it would acquire the business.

Like for like performances in DCC Healthcare were also good, the group said, while tight control of costs helped the performance of DCC Food and Beverage.

However, the extreme weather hit activity levels in DCC Environmental.

DCC said it was improving its full-year outlook from its November estimates, predicting a rise in operating profit for the year to March 31st 2011 of about 18 per cent. On a constant currency basis, operating profit will rise about 15 per cent.