DCC enjoys strong profit growth as cold weather boosts demand
Published 03/02/2011 | 05:00
DCC, the Irish sales and distribution company that ships everything from heating oil to Xboxes, delivered what it said was "very strong profit growth" during the third quarter that ended in December as cold weather boosted demand at its energy unit.
The company raised its full-year outlook and expected operating profit for the full year ended next month to be up 15pc and adjusted earnings per share to climb 10pc on a constant currency basis.
On a reported basis, operating profit will probably rise 18pc and adjusted earnings per share by 13pc.
DCC Energy is the firm's largest division, accounting for 60pc of group profit.
Yesterday, the company said that volumes sold by the energy unit rose 22pc in the period, one-third of which was organic growth.
That was despite what the company said were logistical challenges created by poor road conditions and supply constraints.
Last month, DCC issued a lengthy statement denying it had ripped off UK consumers following newspaper allegations that it had charged consumers more than they were quoted for fuel.
DCC's Sercom division, which distributes consumer electronic goods such as mobile phones and games consoles, reported strong trading in what was its seasonally most significant quarter, said the company.
It added that the launch of the Microsoft Kinect technology for its Xbox drove much of the trading in the quarter.
During the quarter, DCC spent €15m on the purchase and fit-out of a warehouse north of London for Sercom's distribution activities. The company added that trading at other business segments -- including health care, and food and beverage -- was good.
Trading last month was "satisfactory", according to DCC, but said that, relative to January 2010, it was impacted by milder weather conditions.
Analyst David O'Brien at Goodbody Stockbrokers said that he envisaged upgrading his full-year operating profit forecast by 5pc to €229m, representing 19pc growth year-on-year.
Shares in the company closed down 1.2pc at €22.62.