DESPITE a setback in its computer services division, industrial holding group DCC has reported strong growth in the first half of its year, with pre-tax profits up almost 15 per cent to £11.1 million, while turnover was also up almost 15 per cent at £269.8 million.

The results were ahead of market forecasts and the adjusted earnings figure of 10.1p was almost 1p ahead of the forecast from Goodbody Stockbrokers.

Upgrades of full-year forecasts - current profits of £28-£29 million and earnings per share of around 25p - are likely to be upgraded especially given the chairman, Mr Jim Flavin's forecast that there would be a substantial improvement in the computer services division in the second half.

The half-year dividend was increased 12.2 per cent.

Of the pre-tax profits of £11.1 million - which excludes exceptional gains of £3.6 million on the sale of the Heiton stake and a £1 million gain on the increased stake in Allied Foods - over three-quarters came from organic growth, with just under a quarter from acquisitions.

Since last March, DCC has spent £17.4 million (£3.25 million since the end of the half-year) on two new acquisitions and increased controlling interests in various subsidiaries. Most of the remaining minority shareholdings are expected to be bought out over the next two years, giving DCC full control of its subsidiaries.

Within the food division, which includes various snack and healthfoods, ground coffee and food and wine distribution businesses, there was very strong growth with operating profits up over 21 per cent while sales were 9.6 per cent higher on £92.8 million. DCC benefited from lower coffee costs and a better performance in the catering sector.

DCC took in an 11 per cent share of Fyffes half-year profits into its own half-year results. Mr Flavin said that DCC is "very happy" with Fyffes despite the poor performance of the Fyffes share price in recent years. Mr Flavin said that Fyffes is carried in DCC's balance sheet at 60p per share compared to the 104p price of the share in the market. Commenting on whether Fyffes would have been better served to have accepted Dole Food's 115p per share offer of four years ago, Mr Flavin commented: "if everybody sold out at the first opportunity, we probably wouldn't have a stock market left.

DCC's energy division suffered a contraction in margins with a 14.8 per cent rise in operating profits on sales up 22.6 per cent to £47.6 million.

Operating profits at the "Sercom" computer services division fell 21 per cent to £2.7 million even though sales were up 14.5 per cent to over £81 million. The Printech computer manual printing subsidiary continued to be hit by a decline in the market, but Mr Flavin said that DCC expected a turnaround in this division in the second half of the year.

The real star for DCC was its healthcare division where profits almost trebled to £2.9 million.