DCC records its first decline in earnings after very mild winter
Industrial holding company DCC will diversify its UK fuel business after an unusually mild winter meant it was hit with its first ever earnings decline in the year to the end of March.
The Irish conglomerate is involved in everything from selling electronics to wholesaling coffee, but DCC Energy -- including a UK home heating oil business -- is its biggest division, accounting for more than half of all profits.
Group annual results published yesterday showed that full-year operating profits dropped 18pc to €185m in the year to the end of March. Operating profit at DCC Energy fell 38pc over the same period.
Earnings per share fell for the first time in the company's 18-year history.
Managers blamed last year's mild winter in the UK for the decline.
CEO Tommy Breen said a return to "normal" weather patterns will see DCC Energy bounce back next year.
Erratic weather patterns have seen hard winters followed by exceptionally mild winters, but looked at over three or four years "you can smooth out the pattern", he noted.
Meanwhile, the energy division will seek to diversify into the marine, aviation and petrol station segments in order to create a less weather-dependent revenue base.
The acquisition-happy Irish company generates the bulk of its revenues abroad -- including 68pc in the UK alone. It means the weakness of the euro versus sterling is now working in DCC's favour, though it follows three years where the currency exchange had been a drag in terms of euro earnings.
It has no plans to move its main listing from Ireland to the UK however, or to report its financial accounts in sterling only.
Mr Breen said DCC will continue to consider further bolt-on acquisitions in 2012, including in Ireland if opportunities arise here.
DCC increased its dividend by 5pc to 77.89 cents per share.
Shares in DCC were the most actively traded stocks on the Dublin Stock Exchange in early trading yesterday following the results, down 1pc to €19.70 each, valuing the group at approximately €1.65bn.