Shares in DCC surge on the back of strong results and profit forecast
SHARES in sales and distribution company DCC have surged after the company reported strong results for the first three months of the year. Ireland's largest conglomerate upped its growth forecast yesterday in response to the positive results. It now expects operating profit to jump 15pddc in the year, up from a previous 10pc to 12pc forecast.
The company's share price was up 4pc by mid-afternoon to £26.98.
DCC, the UK's biggest distributor of home heating oil and whose interests also span healthcare, food and beverages and consumer electronics, moved its primary listing to London earlier this year and cancelled its listing in Dublin.
Its energy operation, the group's largest division, performed significantly better than it did last year.
Stockbroker Davy said it continued to view the company as 'outperform'.
"Trading during this period was ahead of the company's expectations," Davy said. "This was helped by DCC Energy benefitting from the colder winter conditions, acquisitions in the prior year and good organic volume growth."
BP's liquid petroleum gas business in Britain – bought by DCC last August for €51.3m – was integrated during the quarter. So too was its acquisition of Total Oil's British distribution business.
The company's second-largest division, DCC SerCom, also exceeded expectations, down to strong sales in IT and communications products.
Its revenue and operating profit were ahead of both the prior year and budget.
During the first three months of the year, DCC Energy completed the planned integration of the former BP LPG business in Britain with DCC's existing distribution operation, and the former Total Oil distribution business in Britain with the company's existing oil distribution business.
The process of integrating Kent Pharmaceuticals into DCC's Healthcare's pharma business is on schedule.
"The group remains in a very strong financial position to pursue a range of development opportunities," the company said.
DCC confirmed earlier this year that it was ditching its listing on the Irish Stock Exchange in favour of one in London.
It is a blow for the exchange, which has already seen firms such as Greencore and United Drug defect to Britain. CRH has also moved its main listing to London.
It added that the potential benefits of being listed in the FTSE Index Series would also increase awareness of DCC among the international investment community.
DCC said it would be announcing its interim results for the six months to the end of September on November 6.