TIDMDCC
RNS Number : 7214R
DCC PLC
09 November 2021
9 November 2021
DCC Delivers Strong Growth in First Half
DCC, the leading international sales, marketing and support
services group, today announces its results for the six months
ended 30 September 2021.
Financial highlights: 2021 2020 % change % change
CC(1)
------------------------------
Revenue GBP7.518bn GBP5.931bn +26.8% +29.7%
------------------------------ ----------- --------- ---------
Adjusted operating profit(2) GBP195.8m GBP176.1m +11.2% +15.5%
----------- ----------- --------- ---------
DCC LPG GBP48.4m GBP45.6m +6.2% +9.6%
----------- ----------- --------- ---------
DCC Retail & Oil GBP70.0m GBP65.2m +7.4% +9.5%
----------- ----------- --------- ---------
DCC Healthcare GBP50.2m GBP39.8m +26.0% +29.8%
----------- ----------- --------- ---------
DCC Technology GBP27.2m GBP25.5m +6.5% +19.0%
----------- ----------- --------- ---------
Adjusted earnings per
share(2) 134.2p 117.9p +13.8% +18.3%
----------- ----------- --------- ---------
Interim dividend 55.85p 51.95p +7.5%
----------- ----------- --------- ---------
Net debt (excl. lease GBP54.1m GBP137.2m
creditors)(3)
----------- ----------- --------- ---------
-- DCC delivered strong growth in the seasonally less
significant first half of the year, a very good performance given
the strong growth in the comparative period. Operating profit
increased by 11.2% (15.5% on a constant currency basis) to GBP195.8
million and more than half of the constant currency growth was
organic. Adjusted earnings per share increased 13.8% to 134.2 pence
per share.
-- All divisions delivered growth, despite the global volatility
in commodity pricing, supply chains and inflation.
-- Interim dividend increased by 7.5% to 55.85 pence per share.
-- DCC's financial position remains very strong, with net debt
(excluding lease creditors) at 30 September 2021 of GBP54.1
million.
-- DCC continues to grow and develop organically and through
acquisition activity. Since the Group's prior year results
announcement in May 2021, DCC has committed approximately GBP80
million to bolt-on acquisitions, with activity across each
division. In the energy sector, acquisitions included the Irish
marketing operations of Naturgy, a supplier of renewable power,
natural gas and energy services to large commercial and industrial
customers and a synergistic, convenience-led, retail mobility
business in Luxembourg. DCC Healthcare also completed its first
German primary care bolt-on, following its initial market entry
through the acquisition of Wörner in April 2021.
-- Notwithstanding the adverse impact of currency translation
and the significantly increased wholesale cost of energy products,
DCC continues to expect that the year ending 31 March 2022 will be
another year of strong operating profit growth and continued
development activity, and in line with current market consensus
expectations.
Sustainability:
-- Sustainability is embedded in DCC's strategy, business model
and culture. DCC released its first standalone Sustainability
Report in July 2021. Amongst other items, the report outlines the
key metrics the Group will use to track progress against its
sustainability objectives. DCC is rated AAA by MSCI.
-- DCC is making good progress towards achieving a 20% reduction
in its own carbon emissions by 2025 from a 2019 base.
-- Progress is being achieved through multiple proactive
initiatives. For example, during the first half, DCC has scaled its
biofuel usage in a number of businesses for its own truck fleet.
DCC is also investing in renewable electricity generation on its
sites. For example, DCC Healthcare's soft-gel facility in south
Wales generates 50% of its electricity on-site though wind and
solar power and utilises its leading sustainability position to
attract new customers.
Energy transition:
-- Leading energy consumers on their transition to renewable or
low carbon energy products is central to DCC's purpose,
sustainability objectives and strategy. DCC continues to introduce
innovative energy solutions for its commercial and industrial,
residential, and mobility customers. For example, since May 2021,
DCC has:
- Accelerated the growth of the recently-acquired solar offering
in France, beginning to cross-sell other energy solutions to those
customers;
- Launched an energy management service for French B2B power
customers, to help customers better understand, monitor and lower
their energy usage and also launched an 'on-premise' electric
vehicle ('EV') charging offering for office and apartment
buildings;
- Further increased the scale of renewable energy solutions
provided in the Irish market through the recent acquisition of
Naturgy. All of the electricity DCC sells to customers in Ireland
is renewable;
- Launched a new offering to trial a 100% biofuel solution for
residential heating in Britain this winter, which can offer
customers an c.85% reduction in carbon; and
- Recently announced a new partnership with ENGIE to roll out EV
fast-charging across DCC's French motorway network.
-- DCC is investing in its capability in new energy solutions.
As a result, DCC has a strong pipeline of initiatives right across
its energy activities. Together with existing offerings, these will
provide energy consumers with further solutions to assist with the
decarbonisation of their energy usage into the future.
1 Constant currency ('CC') represents the retranslation of
foreign denominated current year results at prior year exchange
rates
2 Excluding net exceptionals and amortisation of intangible assets
3 Net debt including lease creditors at 30 September 2021 was
GBP390.3 million (2020: GBP441.0 million)
Donal Murphy, Chief Executive, commented:
"I am pleased to report a strong performance in the seasonally
less significant first half, which builds on the growth recorded
during the first half of the prior year. Each of our four divisions
has delivered good growth, underlining the resilience of our
business model and our ability to adapt to the very volatile macro
environment. Sustainability is core to how we do business, and we
continue to make good progress across each of our four
sustainability pillars, including within energy transition. During
the period we have developed a number of new partnerships with
energy suppliers, bringing innovative and lower-carbon solutions to
our customers. DCC is well positioned to lead our customers through
their energy transition.
With the strength of our market positions and an active
acquisition pipeline, DCC has the capability and financial strength
to continue the growth and development of the Group across the
energy, healthcare and technology sectors."
Contact information
Investor enquiries:
Kevin Lucey, Chief Financial Officer Tel: +353 1 2799 400
Rossa White, Head of Group Investor Relations Email:
investorrelations@dcc.ie
Media enquiries:
Powerscourt (Eavan Gannon/Victoria Palmer Moore) Tel: +44 20
7250 1446
Email: DCC@powerscourt--group.com
DCC website:
www.dcc.ie
Presentation of results - audio webcast and conference call
details:
DCC will host a live audio webcast and conference call of the
presentation at 09.00 today. The slides for this presentation can
be downloaded from DCC's website, www.dcc.ie. The access details
for the live presentation are as follows:
Ireland: +353 (0) 1 506 0650
UK: +44 (0) 2071 928 338
International: +44 (0) 2071 928 338
Passcode: 7839245
Webcast Link: https://edge.media-server.com/mmc/p/uihow8cz
This report, presentation slides and a replay of the audio will
be made available at www.dcc.ie.
Document contents Pages
Divisional Performance Reviews 4 - 7
Group Financial Review 8
Income Statement Review 9 - 11
Cash Flow, Development & Financial Position 12 - 16
Interim Financial Statements (Condensed) 17 - 35
Alternative Performance Measures 36 - 39
Divisional Performance Reviews
DCC LPG 2021 2020 % change % change
CC
----------------------------
Volumes (thousand tonnes) 918.4kT 726.3kT +26.4%
---------- ---------- --------- ---------
Operating profit GBP48.4m GBP45.6m +6.2% +9.6%
---------- ---------- --------- ---------
Operating profit per tonne GBP52.67 GBP62.72
---------- ---------- --------- ---------
DCC LPG delivered strong operating profit growth in the
seasonally less significant first half of the financial year,
notwithstanding the substantial increase in the wholesale cost of
product during the period. Operating profit increased by 6.2% (9.6%
ahead on a constant currency basis) to GBP48.4 million and over
half of the constant currency growth was organic.
As anticipated, volumes recovered across most markets during the
first half of the year, driven by the reopening of economies and
the corresponding increase in commercial activity. DCC LPG sold
918.4k tonnes of product in the first half, a 26.4% increase on the
prior year. As expected, operating profit per tonne reduced due to
the mix impact of the significant increase in lower margin
commercial and industrial customer demand, the impact of the UPG
acquisition in the US and the higher cost of product.
The French business performed in line with expectations,
benefiting from continued good cylinder and domestic demand. The
recently acquired solar photovoltaic businesses have performed well
since acquisition and experienced strong demand for their design,
build and maintenance solutions. These acquisitions have continued
to broaden the energy solutions the business offers to customers in
France and are delivering strong returns on capital employed. The
B2B gas and power business also expanded its customer base and the
range of energy solutions it provides during the first half,
although, as with the LPG sector, the higher cost of energy was a
headwind throughout the period.
In Britain and Ireland, the business experienced a strong
recovery in commercial volumes. The growth in commercial volumes
was supported by momentum in Britain in oil to LPG conversions,
relative to the pandemic-affected prior year. Oil to LPG customer
volumes are well ahead of where they were prior to the pandemic, as
commercial and industrial customers are increasingly attracted to
solutions that significantly reduce their carbon footprint. In
Ireland, similar to the experience in France, the on-grid gas and
power business has faced significant volatility and increases in
wholesale prices for natural gas and electricity. DCC LPG recently
agreed to acquire Naturgy's power and gas marketing operations in
Ireland, a business supplying renewable power, gas and energy
services to large energy users. The acquisition enhances DCC's
presence in the Irish electricity and gas markets and represents an
important step in its strategy to expand its energy solutions
offering across the island of Ireland.
In the US, the business recorded very strong volume growth,
driven by the acquisitions of NES Group (September 2020) and UPG
(January 2021). The integration of both businesses has progressed
well, and they have traded in line with expectations. The business
continued to build its market position during the period and
recently acquired another small business in Denver, Colorado. DCC
LPG now has a substantial business in the US, operating across 22
states. Overall, the business in the US performed in line with
expectations during the first half.
In Benelux, the business completed the acquisition of Primagaz
in June of this year, following receipt of competition authority
approval. Integration is progressing well, and the acquisition
significantly increases DCC LPG's position in the market, by adding
over 10,000 customers. The business in Germany benefited from three
small bolt-on acquisitions completed during the first half of the
year, one in refrigerants and two in LPG, as it expands its
footprint in the sizeable and fragmented German market.
DCC Retail & Oil 2021 2020 % change % change
CC
----------------------------
Volumes (billion litres) 5.681bn 4.8.76bn +16.5%
---------- ---------- --------- ---------
Operating profit GBP70.0m GBP65.2m +7.4% +9.5%
---------- ---------- --------- ---------
Operating profit per litre 1.23ppl 1.34ppl
---------- ---------- --------- ---------
Following a very strong performance in the first half of the
prior year, DCC Retail & Oil again delivered strong growth.
Operating profit increased by 7.4% (9.5% on a constant currency
basis), almost all of which was organic, driven by the recovery in
commercial and transport volumes. DCC Retail & Oil also made
good progress in expanding the range of products and services it
offers to its customers and continued to build capability in lower
emissions fuels, EV fast-charging and related services.
DCC Retail & Oil sold 5.681 billion litres of product in the
first half, a 16.5% increase on the prior year. Commercial,
industrial and transport volumes increased significantly,
particularly in the first quarter, as the easing of Covid-19
restrictions led to economic activity recovering, relative to the
prior year. The business continues to broaden its product and
service offering to customers, which has benefited operating
margins generally in recent years. Operating profit per litre
decreased modestly due to the mix impact of the recovery in
lower-margin, higher-volume commercial activity.
The business in Britain and Ireland recorded very strong organic
operating profit growth, in part due to the recovery in commercial
activity, which drove fuel and fuel card usage. The business also
delivered good growth in its expanded network of company operated
retail sites and stores. The increased range of customer solutions
is becoming more material, and in the first half of the year, good
growth was achieved across lubricants, truck stop, roadside
services and heating services . The business in Britain also
recently completed the acquisitions of two small bolt-on
acquisitions which will improve its digital capability and further
expand the roadside services offerings. The business in Ireland
delivered strong organic growth in the first half of the year and
benefited from the integration of two modest acquisitions completed
during the last twelve months.
The Scandinavian business performed robustly following an
excellent performance in the prior year. The business in Denmark in
particular performed well and generated good growth across the
retail, agricultural and commercial sectors. In Scandinavia
generally, the business continued to deploy capital into expanding
its presence in lower emissions fuels and EV charging
infrastructure, including winning a tender for a transport mobility
hub in Norway.
In France, the business recorded very strong growth, as
restrictions lifted and retail mobility consumers were increasingly
active. It has also made good progress in offering new products and
solutions to mobility customers. The business has entered into a
partnership with ENGIE to deploy EV chargers on 14 motorway sites,
while rolling out the infrastructure to enable the sale of E85 fuel
across its network. E85 offers a lower carbon alternative product
for retail mobility customers. In September 2021, the business also
acquired a synergistic network of 19 convenience-led retail
forecourts in Luxembourg. The acquisition will be fully integrated
into DCC Retail & Oil's existing mobility operating platform
and, although modest, will add a good company-operated convenience
retailing capability.
DCC Healthcare 2021 2020 % change % change
CC
------------------
Revenue GBP384.2m GBP322.0m +19.3% +22.9%
---------- ---------- --------- ---------
Operating profit GBP50.2m GBP39.8m +26.0% +29.8%
---------- ---------- --------- ---------
Operating margin 13.1% 12.4%
---------- ---------- --------- ---------
DCC Healthcare delivered another excellent performance in the
first half of the financial year, generating operating profit
growth of 26.0% (29.8% on a constant currency basis), approximately
two-thirds of which was organic. DCC Vital generated excellent
organic profit growth and benefited from the acquisition earlier in
the year of Wörner , a leading primary care supplier in Germany and
Switzerland. DCC Health & Beauty Solutions also performed well,
growing its operating profit and building on the excellent growth
in the first half of the prior year.
DCC Health & Beauty Solutions, which provides outsourced
solutions to international nutrition and beauty brand owners,
achieved good profit growth, driven by strong growth in Europe. The
performance in Europe was driven by strong growth in sales of
'beauty from within' nutrition and premium skincare products. Sales
growth in the US market was more modest, following excellent growth
in the prior year, as consumer demand normalised towards
longer-term growth trends.
DCC Health & Beauty Solutions continued to invest in its
management resources during the period, particularly in the US
where a new divisional team has been established. It also expanded
its capacity and capability across its manufacturing facilities,
including recently adding nutritional gummy manufacturing in
Britain.
DCC Vital, which is focused on the sales and marketing of
medical products to healthcare providers, generated excellent
revenue and operating profit growth. In the British and Irish
markets DCC Vital is well positioned to benefit from an increase in
routine hospital procedures and in-person GP consultations, which
have yet to normalise as the pandemic continues to impact
healthcare systems. The business continued to service the
healthcare systems with the supply of pandemic-related PPE and
related products.
DCC Vital also benefited from the first-time contribution of
Wörner , acquired in April 2021. This acquisition establishes a
continental European growth platform for DCC Vital in primary care
and builds on DCC Vital's leadership position in this sector in
Britain. Wörner performed ahead of expectations in the first half
of the financial year, benefiting from the distribution of antigen
tests into the nursing home sector. The business also completed a
small bolt-on acquisition in the first quarter, further expanding
its footprint in the German market.
DCC Technology 2021 2020 % change % change
CC
------------------
Revenue GBP1.985bn GBP1.969bn +0.8% +3.7%
----------- ----------- --------- ---------
Operating profit GBP27.2m GBP25.5m +6.5% +19.0%
----------- ----------- --------- ---------
Operating margin 1.4% 1.3%
----------- ----------- --------- ---------
DCC Technology delivered good profit growth in the first half of
the year, despite the well-documented global supply chain
disruption being experienced by the technology industry and its
impact on product availability. The business recorded operating
profit growth of 6.5% (19.0% on a constant currency basis) in the
seasonally less significant first half of the financial year and
approximately one-third of the constant currency growth was
organic. The business performed very strongly in North America
across both the consumer and B2B sectors, where the economy
reopened earlier than in Europe. This very strong performance more
than compensated for a challenging environment for the UK
business.
Overall, the business recorded modest revenue growth in the
period. Trading conditions in higher-margin B2B sectors, such as
Pro AV products, improved as economies re-opened. Demand for
higher-volume, lower-margin consumer and working-from-home products
generally remained relatively robust, although activity was
somewhat constrained by supply disruption, particularly in the
UK.
The North American business performed very strongly in the first
half of the year and delivered very good organic revenue and profit
growth across Pro Audio, Pro AV and consumer products. As expected,
the B2B Pro AV sector recovered strongly as Covid-19 restrictions
eased and activity in areas such as corporate hospitality,
education and healthcare returned towards pre-pandemic levels. The
business also benefited from the first-time contribution from the
two modest bolt-on acquisitions completed in the prior year, both
of which have performed well since acquisition.
In the UK, revenue and operating profit declined. The UK
business is experiencing the most product supply disruption, with
labour availability and logistics challenges also being most acute
in this market. The business was also impacted by the planned
implementation of a new warehouse management system in the second
quarter. In Ireland, the business recorded good organic revenue and
operating profit growth in the first half of the financial year. It
also moved to a new, larger, warehouse and office facility during
the period, which will facilitate the continued growth and
development of the business in the Irish market.
In Continental Europe, DCC Technology generated good revenue and
profit growth in the period. As in North America, the business has
experienced a recovery in the demand environment for B2B products
generally, although the rate of recovery has varied across markets.
The business performed well in the Benelux region and delivered
good growth in the Nordics, where it also recently acquired a
modest bolt-on acquisition in the AV sector. The performance in the
B2B sector benefited from the completion of the acquisition of
Azenn during the period, a French distributor of structured cabling
solutions and network devices to the French installation market.
Azenn, which has performed well since acquisition, is complementary
to the existing French B2B offering.
Group Financial Review
A summary of the Group's results for the six months ended 30
September 2021 is as follows:
2021 2020
GBP'm GBP'm % change
Revenue 7,518 5,931 +26.8 %
Adjusted operating profit(1)
DCC LPG 48.4 45.6 +6.2%
DCC Retail & Oil 70.0 65.2 +7.4%
DCC Healthcare 50.2 39.8 +26.0%
DCC Technology 27.2 25.5 +6.5%
Group adjusted operating profit(1) 195.8 176.1 +11.2%
Finance costs (net) and other (26.9) (30.2)
Profit before net exceptionals, amortisation of intangible assets and tax 168.9 145.9 +15.7%
Net exceptional items before tax (17.3) (13.3)
Amortisation of intangible assets (36.6) (30.5)
Profit before tax 115.0 102.1
Taxation (24.3) (18.5)
Profit after tax 90.7 83.6
Non-controlling interests (6.2) (5.0)
Attributable profit 84.5 78.6
Adjusted earnings per share(1) 134.2 pence 117.9 pence +13.8%
Dividend per share 55.85 pence 51.95 pence +7.5%
Free cash flow(2) 12.3 120.7
Net debt at 30 September (excluding lease creditors) 54.1 137.2
Lease creditors 336.2 303.8
Net debt at 30 September (including lease creditors) 390.3 441.0
(1) Excluding net exceptionals and amortisation of intangible assets
(2) After net working capital and net capital expenditure but before net exceptionals, interest
and tax payments
Income Statement Review
Reporting currency
The Group's financial statements are presented in sterling,
denoted by the symbol 'GBP'. The principal exchange rates used for
the translation of results into sterling are set out in note 4,
Reporting Currency, on page 23.
The net impact of currency translation on the Group income
statement versus the prior period was relatively significant,
accounting for a headwind of approximately 4% to the reported
growth in operating profit. Average sterling exchange rates
strengthened against most relevant currencies, including the US
dollar and euro.
Revenue
Overall, Group r evenue increased by 26.8% (29.7% increase on a
constant currency basis) to GBP7.518 billion.
DCC LPG sold 918.4k tonnes of product in the first half of the
year, a 26.4% increase versus the prior year. Volumes recovered
across all markets, driven by the reopening of economies and the
corresponding increase in commercial and industrial activity.
DCC Retail & Oil sold 5.7 billion litres of product in the
first half, a 16.5% increase versus the prior year driven by the
recovery of commercial, industrial and transport volumes,
particularly in the first quarter.
Combined revenue in DCC Healthcare and DCC Technology was GBP2.4
billion, an increase of 3.4% reflecting a strong revenue
performance in DCC Healthcare and DCC Technology's North American
businesses.
Group adjusted operating profit
Group adjusted operating profit increased by 11.2% to GBP195.8
million (15.5% ahead on a constant currency basis), in the
seasonally less significant first half of the year. More than half
of the constant currency growth was organic, a strong performance
in the context of well-documented challenges in global commodity
prices, supply chain shortages and labour availability.
DCC LPG traded strongly during the first half of the year,
particularly given the significant increase in the cost of product.
Operating profit increased by 6.2% (9.6% ahead on a constant
currency basis) to GBP48.4 million, over half of which was
organic.
Operating profit in DCC Retail & Oil was well ahead of the
prior year driven by the anticipated recovery in commercial and
transport volumes. Operating profit increased 7.4% to GBP70.0
million (9.5% ahead on a constant currency basis), almost all of
which was organic.
DCC Healthcare delivered another excellent performance in the
first half of the year, generating operating profit growth of 26.0%
to GBP50.2 million (29.8% on a constant currency basis),
approximately two-thirds of which was organic. DCC Vital generated
very strong organic growth and benefited from the acquisition of
Wörner in April 2021.
DCC Technology traded strongly, and operating profit increased
6.5% to GBP27.2 million (19.0% ahead on a constant currency basis)
and approximately one-third of the constant currency growth was
organic . The growth was driven by the consumer and B2B sectors in
North America, which performed very well.
Finance costs (net) and other
Net finance and other costs decreased to GBP26.9 million (2020:
GBP30.2 million). The decrease primarily reflects a lower interest
charge due to lower average gross debt balances, following a
private placement debt repayment in May 2021. Average net debt,
excluding lease creditors, in the period was GBP211 million,
compared to an average net debt of GBP223 million in the prior
year. The slight decrease in average net debt excluding lease
creditors reflects lower levels of working capital across the first
six months of the year.
Profit before net exceptional items, amortisation of intangible
assets and tax
Profit before net exceptional items, amortisation of intangible
assets and tax increased by 15.7% to GBP168.9 million.
Net exceptional items and amortisation of intangible assets
The Group recorded a net exceptional charge after tax of GBP17.5
million in the first six months of the year as follows:
GBP'm
Adjustments to contingent acquisition consideration 8.0
Acquisition and related costs 5.8
Restructuring and integration costs and other 4.5
IAS 39 mark-to-market gain (1.0)
17.3
Tax attaching to exceptional items 0.2
Net exceptional charge 17.5
----------------------------------------------------- ------
Adjustments to contingent acquisition consideration reflects an
increase in the provision for deferred consideration likely payable
in respect of two acquisitions in DCC Technology where the trading
performance in North America has been very strong and ahead of
expectations. In accordance with IFRS 3, this increase in the fair
value of contingent consideration is recognised as a charge in the
Income Statement.
Acquisition and related costs include the professional fees and
tax costs relating to the evaluation and completion of acquisition
opportunities and amounted to GBP5.8 million.
Restructuring and integration costs and other of GBP4.5 million
relates to the restructuring and integration of operations across a
number of businesses and acquisitions. The most material item
relates to DCC LPG, where a project is underway in France to
enhance the efficiency of its operating infrastructure.
The level of ineffectiveness calculated under IAS 39 on the
hedging instruments related to the Group's US private placement
debt is charged or credited as an exceptional item. In the six
months ended 30 September 2021 , this amounted to an exceptional
non-cash gain of GBP1.0 million. The cumulative net exceptional
credit taken in respect of IAS 39 ineffectiveness is GBP0.3
million. This, or any subsequent similar non-cash charges or gains,
will net to zero over the remaining term of this debt and the
related hedging instruments.
The charge for the amortisation of acquisition related
intangible assets increased to GBP36.6 million from GBP30.5 million
in the prior year, with the increase primarily reflecting
acquisitions completed during the second half of the prior
year.
Profit before tax
Profit before tax increased to GBP115.0 million.
Taxation
The effective tax rate for the Group in the first half of the
year of 18.0% is based on the anticipated mix of profits for the
full year and compares to a full year effective tax rate in the
prior year of 17.0%.
Adjusted earnings per share
Adjusted earnings per share increased by 13.8% to 134.2 pence,
reflecting the increase in profit before exceptional items and
goodwill amortisation.
Dividend
The Board has decided to pay an interim dividend of 55.85 pence
per share, which represents a 7.5% increase on the prior year
interim dividend of 51.95 pence per share. This dividend will be
paid on 10 December 2021 to shareholders on the register at the
close of business on 19 November 2021.
Cash Flow, Development & Financial Position
Cash flow
As with its operating profit, the Group's operating cash flow is
significantly weighted towards the second half of the year. The
cash flow of the Group for the six months ended 30 September 2021
can be summarised as follows:
Six months ended 30 September 2021 2020
GBP'm GBP'm
Group operating profit 195.8 176.1
Increase in working capital (183.2) (28.4)
Depreciation (excluding ROU leased assets) and other 70.2 63.8
Operating cash flow (pre add-back for depreciation on ROU leased assets) 82.8 211.5
Capital expenditure (net) (67.0) (87.6)
15.8 123.9
Depreciation on ROU leased assets 32.4 29.9
Repayment of lease creditors (35.9) (33.1)
Free cash flow 12.3 120.7
Interest and tax paid, net of dividend from equity accounted investments (53.4) (42.0)
Free cash flow (after interest and tax) (41.1) 78.7
Acquisitions (162.4) (98.5)
Dividends (106.8) (92.5)
Exceptional items (9.8) (19.2)
Share issues 0.4 -
Net outflow (319.7) (131.5)
Opening net debt (150.2) (367.1)
Translation and other 79.6 57.6
Closing net debt (including lease creditors) (390.3) (441.0)
Analysis of closing net debt (including lease creditors):
Net debt at 30 September (excluding lease creditors) (54.1) (137.2)
Lease creditors at 30 September (336.2) (303.8)
(390.3) (441.0)
The working capital performance of the Group continues to be
strong, with the working capital position at 30 September 2021
comparing favourably to the prior year and in line with
expectations. The absolute value of working capital at 30 September
2021 was a negative GBP25.2 million versus GBP1.0 million
(positive) at 30 September 2020.
This good performance reflects a very strong underlying working
capital performance in DCC Retail & Oil, which benefited from
the increased activity levels. The uncertain supply chain
environment saw both the Healthcare and Technology divisions invest
in working capital versus the prior year to ensure service levels
to customers. Overall working capital days at 30 September 2021
were negative 0.5 days sales, a slight improvement on the prior
year (2020: 0.0 days sales). DCC Technology selectively uses supply
chain financing solutions to sell, on a non-recourse basis, a
portion of its receivables relating to certain larger supply
chain/sales and marketing activities. As anticipated, the level of
supply chain financing at 30 September 2021 was lower than the
prior year at GBP125.9 million (2020: GBP223.4 million), with the
decrease reflecting the lower volume throughput in in the UK
business following the warehouse system upgrades and product supply
disruption. Supply chain financing had a positive impact on Group
working capital days of 2.0 days (30 September 2020: 5.2 days).
As expected, working capital increased by GBP183.2 million over
the six-month period from 31 March 2021 due to the reversal of
approximately GBP80 million of one-off timing benefits which were
highlighted in the Results Announcement in May 2021, lower
utilisation of supply chain financing and the investment in the
Group's typical seasonal working capital requirements.
Net capital expenditure for the six months amounted to GBP67.0
million (2020: GBP87.6 million), was net of disposal proceeds of
GBP11.1 million, and reflects continued investment in development
initiatives across the Group.
Capital expenditure in DCC LPG primarily comprised development
expenditure on tanks, cylinders and installations, supporting new
business, the conversion of oil customers to LPG, and the continued
rollout of bioLPG cylinders and 'Click and Collect' services. There
was also continued development spend in relation to the Avonmouth
LPG storage facility in the UK. In the Retail & Oil division,
there was continued investment in new retail sites and site
upgrades, including adding further lower emission product
capability , EV fast charging and related services. It also
included capital expenditure in relation to the ongoing project to
optimise the depot network in the UK to bring greater network and
capital efficiency over time. In DCC Healthcare, the capital
expenditure primarily related to increased manufacturing capability
across DCC Health & Beauty Solutions in both Europe and the US,
to facilitate the strong growth in customer demand. The majority of
the capital expenditure in DCC Technology related to the new
warehouse management system which is now live in the UK, along with
development spend in Ireland to relocate to a new, larger, office
and warehouse facility during the period.
Net capital expenditure was broadly in line with the
depreciation charge of GBP68.9 million (excluding right-of-use
leased assets) in the period.
Free cash flow in the six months ended 30 September 2021 of
GBP12.3 million compares to GBP120.7 million in the prior year,
with the reduction substantially due to the reversal of the one-off
timing benefits to working capital at 31 March 2021.
Total cash spend on acquisitions in the six months to 30
September 2021
The total cash spend on acquisitions in the six months ended 30
September 2021 was GBP162.4 million. This included the completion
of the acquisition of Wörner in DCC Healthcare, Primagaz and Solewa
in DCC LPG, Jones Ireland in DCC Retail & Oil and Azenn in DCC
Technology which were announced in the prior year Results
Announcement in May 2021. Payment of deferred and contingent
acquisition consideration previously provided amounted to GBP21.1
million.
Committed acquisition and capital expenditure
Committed acquisition and capital expenditure in the period
amounted to GBP144.8 million as follows:
Acquisitions Capex Total
GBP'm GBP'm GBP'm
DCC LPG 33.9 36.3 70.2
DCC Retail & Oil 36.8 16.7 53.5
DCC Healthcare 5.8 7.0 12.8
DCC Technology 1.2 7.1 8.3
Total 77.7 67.1 144.8
------------------ ------------------- ----------- -----------------
Acquisition activity
The Group continues to be active from a development perspective.
Acquisition expenditure committed by the Group since the prior year
results announcement on 18 May 2021 amounted to GBP 77.7 million
and included:
DCC LPG
Naturgy Ireland
In November 2021, DCC LPG agreed to acquire Naturgy's Irish
power and gas marketing operations, subject to competition approval
in Ireland. The business is a service-led supplier of electricity
and gas to large B2B energy customers and also provides a range of
services including demand side management, lighting as a service,
solar PV and PPA management. Founded in 2004, the business has a
long track record of sourcing and supplying renewable power to
industrial and commercial customers and was the first company in
Ireland to supply 100% renewable electricity. The acquisition
enhances DCC's presence in the Irish electricity and gas markets
and represents an important step in its strategy to expand its
energy solutions offering across the island of Ireland. The
acquisition is expected to complete by the end of the calendar
year.
DCC LPG recently completed a small bolt-on acquisition in the
Denver region of Colorado, further expanding its presence in the US
propane market and also completed a number of modest acquisitions
in the German and Austrian markets.
DCC Retail & Oil
Luxembourg retail convenience network
DCC Retail & Oil acquired a network of 19 retail sites in
Luxembourg in September 2021. The sites will be managed by DCC's
existing French management team and the network and operations
centre in Ireland. Most of the sites are Gulf branded, with
established convenience retail operations under the leading Cactus
Shoppi brand, which DCC will operate. The network contains
well-located, urban sites, suitable for investment in EV fast
charging infrastructure in the future.
In Britain, DCC Retail & Oil completed a number of
complementary bolt-on acquisitions including a HGV service
business, offering multiple services to hauliers including secure
parking, fuel provision, truck washing facilities and
accommodation.
DCC Retail & Oil also completed a small bolt-on acquisition
in the bulk fuels and lubricants market in Norway.
DCC Healthcare
In June 2021, DCC Healthcare completed its first primary care
bolt-on acquisition in Germany following its initial market entry
through the Wörner acquisition in April 2021.
DCC Technology
DCC Technology recently acquired a small business in the Nordics
which distributes AV and security camera equipment, further
enhancing DCC Technology's service offering to its customers in the
region.
Financial strength
An integral part of the Group's strategy is the maintenance of a
strong and liquid balance sheet which, among other benefits,
enables it to take advantage of development opportunities as they
arise. The increasing scale and geographic diversity of DCC will
enable the Group to evolve its approach somewhat into the future,
leveraging a broader array of funding options and, over time,
reducing relative levels of gross cash on the balance sheet. At 30
September 2021, the Group had net debt (excluding lease creditors)
of GBP54.1 million, cash of approximately GBP1.3 billion and
undrawn committed bank facilities of GBP400 million. Lease
creditors at the same date amounted to GBP336.2 million.
The Group's outstanding term debt at 30 September 2021, which
has been raised in the US private placement market, had an average
maturity of 5.0 years, with an implied average credit margin of
1.65% over Euribor/Libor.
Outlook
Notwithstanding the adverse impact of currency translation and
the significantly increased wholesale cost of energy products, DCC
continues to expect that the year ending 31 March 2022 will be
another year of strong operating profit growth and continued
development activity, and in line with current market consensus
expectations.
Forward-looking statements
This announcement contains some forward-looking statements that
represent DCC's expectations for its business, based on current
expectations about future events, which by their nature involve
risk and uncertainty. DCC believes that its expectations and
assumptions with respect to these forward-looking statements are
reasonable; however, because they involve risk and uncertainty as
to future circumstances, which are in many cases beyond DCC's
control, actual results or performance may differ materially from
those expressed in or implied by such forward-looking
statements.
Principal risks and uncertainties
The Board of DCC is responsible for the Group's risk managem ent
and internal control systems, which are designed to identify,
manage and mitigate potential material risks to the achievement of
the Group's strategic and business objectives. The Board has
approved a Risk Management Policy which sets out delegated
responsibilities and procedures for the management of risk across
the Group.
The principal risks and uncertainties facing the Group in the
short to medium term, as set out on pages 85 to 89 of the 2021
Annual Report (together with the principal mitigation measures),
continue to be the principal risks and uncertainties facing the
Group for the remaining six months of the financial year.
This is not an exhaustive statement of all relevant risks and
uncertainties. Matters which are not currently known to the Board
or events which the Board considers to be of low likelihood could
emerge and give rise to material consequences. The mitigation
measures that are maintained in relation to these risks are
designed to provide a reasonable and not an absolute level of
protection against the impact of the events in question.
Group Income Statement
Unaudited 6 months ended Unaudited 6 months ended Audited year ended
30 September 2021 30 September 2020 31 March 2021
--------------------------------------------------- ----------------------------------------------------- -------------------------------------------
Pre exceptionals Exceptionals Pre exceptionals Exceptionals Pre Exceptionals
(note 6) Total (note 6) Total exceptionals (note 6) Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 5 7,518,329 - 7,518,329 5,931,094 - 5,931,094 13,412,450 - 13,412,450
Cost of sales (6,621,722) - (6,621,722) (5,140,742) - (5,140,742) (11,592,970) - (11,592,970)
---------------------- ------------- ------------ ------------------------ ------------- ------------ ------------- ------------- -------------
Gross profit 896,607 - 896,607 790,352 - 790,352 1,819,480 - 1,819,480
Administration
expenses (280,674) - (280,674) (250,582) - (250,582) (499,812) - (499,812)
Selling and distribution
expenses (430,615) - (430,615) (375,131) - (375,131) (814,758) - (814,758)
Other operating
income/(expenses) 10,463 (18,305) (7,842) 11,459 (14,703) (3,244) 25,333 (40,495) (15,162)
---------------------- ------------- ------------ ------------------------ ------------- ------------ ------------- ------------- -------------
Adjusted operating profit 195,781 (18,305) 177,476 176,098 (14,703) 161,395 530,243 (40,495) 489,748
Amortisation of intangible
assets (36,566) - (36,566) (30,534) - (30,534) (66,898) - (66,898)
---------------------- ------------- ------------ ------------------------ ------------- ------------ ------------- ------------- -------------
Operating profit 5 159,215 (18,305) 140,910 145,564 (14,703) 130,861 463,345 (40,495) 422,850
Finance costs (39,355) - (39,355) (45,070) - (45,070) (85,639) - (85,639)
Finance income 12,056 967 13,023 14,819 1,406 16,225 26,253 1,384 27,637
Equity accounted
investments'
profit after tax 390 - 390 62 - 62 233 - 233
---------------------- ------------- ------------ ------------------------ ------------- ------------ ------------- ------------- -------------
Profit before tax 132,306 (17,338) 114,968 115,375 (13,297) 102,078 404,192 (39,111) 365,081
Income tax expense 7 (24,089) (184) (24,273) (18,254) (226) (18,480) (66,382) 4,104 (62,278)
---------------------- ------------- ------------ ------------------------ ------------- ------------ ------------- ------------- -------------
Profit after tax for the
financial period 108,217 (17,522) 90,695 97,121 (13,523) 83,598 337,810 (35,007) 302,803
---------------------- ------------- ------------ ------------------------ ------------- ------------ ------------- ------------- -------------
Profit
attributable
to:
Owners of the Parent
Company 102,029 (17,522) 84,507 92,137 (13,523) 78,614 327,626 (35,007) 292,619
Non-controlling
interests 6,188 - 6,188 4,984 - 4,984 10,184 - 10,184
---------------------- ------------- ------------ ------------------------ ------------- ------------ ------------- ------------- -------------
108,217 (17,522) 90,695 97,121 (13,523) 83,598 337,810 (35,007) 302,803
---------------------- ------------- ------------ ------------------------ ------------- ------------ ------------- ------------- -------------
Earnings per ordinary share
Basic earnings per
share 8 85.71p 79.83p 297.04p
Diluted earnings
per share 8 85.66p 79.70p 296.62p
Adjusted basic
earnings
per share 8 134.24p 117.93p 386.62p
Adjusted diluted
earnings
per share 8 134.16p 117.74p 386.07p
------------ ------------ -------------
Group Statement of Comprehensive Income
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
Group profit for the period 90,695 83,598 302,803
Other comprehensive income:
Items that may be reclassified subsequently
to profit or loss
Currency translation 17,481 19,388 (53,527)
Movements relating to cash flow
hedges 105,035 54,668 67,961
Movement in deferred tax liability
on cash flow hedges (19,065) (9,294) (11,554)
---------- ---------- ---------
103,451 64,762 2,880
---------- ---------- ---------
Items that will not be reclassified
to profit or loss
Group defined benefit pension obligations:
- remeasurements (2,747) (1,950) 254
- movement in deferred tax asset 494 332 159
---------- ---------- ---------
(2,253) (1,618) 413
---------- ---------- ---------
Other comprehensive income for the
period, net of tax 101,198 63,144 3,293
---------- ---------- ---------
Total comprehensive income for
the period 191,893 146,742 306,096
---------- ---------- ---------
Attributable to:
Owners of the Parent Company 185,077 140,021 298,172
Non-controlling interests 6,816 6,721 7,924
---------- ---------- ---------
191,893 146,742 306,096
---------- ---------- ---------
Group Balance Sheet
Unaudited Unaudited Audited
30 Sept. 30 Sept. 31 March
2021 2020 2021
Notes GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Property, plant and equipment 1,171,866 1,132,586 1,137,634
Right-of-use leased assets 328,432 298,533 308,863
Intangible assets and goodwill 2,343,529 2,186,447 2,206,735
Equity accounted investments 26,891 28,937 27,134
Deferred income tax assets 30,974 35,975 30,706
Derivative financial instruments 126,079 178,094 121,671
4,027,771 3,860,572 3,832,743
---------- ---------- ----------
Current assets
Inventories 941,545 756,464 685,950
Trade and other receivables 1,557,229 1,434,777 1,689,372
Derivative financial instruments 150,744 33,389 40,181
Cash and cash equivalents 1,437,725 1,574,329 1,786,556
---------- ---------- ----------
4,087,243 3,798,959 4,202,059
----------
Total assets 8,115,014 7,659,531 8,034,802
---------- ---------- ----------
EQUITY
Capital and reserves attributable to owners
of the Parent Company
Share capital 17,422 17,422 17,422
Share premium 883,318 882,912 882,924
Share based payment reserve 10 44,531 38,625 40,969
Cash flow hedge reserve 10 99,100 2,097 13,130
Foreign currency translation reserve 10 77,113 129,178 60,260
Other reserves 10 932 932 932
Retained earnings 1,607,747 1,466,814 1,631,797
---------- ---------- ----------
Equity attributable to owners
of the Parent Company 2,730,163 2,537,980 2,647,434
Non-controlling interests 66,582 61,486 58,210
---------- ---------- ----------
Total equity 2,796,745 2,599,466 2,705,644
---------- ---------- ----------
LIABILITIES
Non-current liabilities
Borrowings 1,568,450 1,716,427 1,553,200
Lease creditors 275,859 256,747 261,617
Derivative financial instruments - 687 652
Deferred income tax liabilities 198,237 186,612 183,220
Post employment benefit obligations 13 (5,517) (5,604) (8,024)
Provisions for liabilities 282,641 265,880 279,492
Acquisition related liabilities 74,942 67,804 62,549
Government grants 367 324 373
---------- ---------- ----------
2,394,979 2,488,877 2,333,079
---------- ---------- ----------
Current liabilities
Trade and other payables 2,548,083 2,202,991 2,604,177
Current income tax liabilities 41,744 44,517 44,081
Borrowings 147,108 193,999 219,659
Lease creditors 60,322 47,009 53,607
Derivative financial instruments 53,140 11,896 9,843
Provisions for liabilities 47,723 48,062 42,859
Acquisition related liabilities 25,170 22,714 21,853
---------- ---------- ----------
2,923,290 2,571,188 2,996,079
---------- ---------- ----------
Total liabilities 5,318,269 5,060,065 5,329,158
---------- ---------- ----------
Total equity and liabilities 8,115,014 7,659,531 8,034,802
---------- ---------- ----------
Net (debt)/cash included above
(excluding lease creditors) 11 (54,150) (137,197) 165,054
---------- ---------- ----------
Group Statement of Changes in Equity
For the six Attributable to owners of the
months ended 30 Parent Company
September 2021
--------------------------------------------------------------------------------------------------------------------------
Other Non-
Share Share Retained reserves controlling Total
capital premium earnings (note Total interests equity
10)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2021 17,422 882,924 1,631,797 115,291 2,647,434 58,210 2,705,644
Profit for the
period - - 84,507 - 84,507 6,188 90,695
Currency
translation - - - 16,853 16,853 628 17,481
Group defined
benefit pension
obligations:
- remeasurements - - (2,747) - (2,747) - (2,747)
- movement in
deferred tax
asset - - 494 - 494 - 494
Movements
relating to
cash
flow hedges - - - 105,035 105,035 - 105,035
Movement in
deferred tax
liability
on cash flow
hedges - - - (19,065) (19,065) - (19,065)
Total
comprehensive
income - - 82,254 102,823 185,077 6,816 191,893
Re-issue of
treasury shares - 394 - - 394 - 394
Share based
payment - - - 3,562 3,562 - 3,562
Non-controlling
interest
arising
on acquisition - - - - - 2,058 2,058
Dividends - - (106,304) - (106,304) (502) (106,806)
----------------------- ------------------------ ----------------------- --------------------- ----------------------- ------------------------- ------------------
At 30 September
2021 17,422 883,318 1,607,747 221,676 2,730,163 66,582 2,796,745
----------------------- ------------------------ ----------------------- --------------------- ----------------------- ------------------------- ------------------
For the six Attributable to owners of the
months ended 30 Parent Company
September 2020
------------------------------------------------------------------------------------------------------------------------------
Other Non-
Share Share Retained reserves controlling Total
capital premium earnings (note Total interests equity
10)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2020 17,422 882,887 1,482,288 104,096 2,486,693 54,765 2,541,458
Profit for the
period - - 78,614 - 78,614 4,984 83,598
Currency
translation - - - 17,651 17,651 1,737 19,388
Group defined
benefit pension
obligations:
- remeasurements - - (1,950) - (1,950) - (1,950)
- movement in
deferred tax
asset - - 332 - 332 - 332
Movements
relating to
cash
flow hedges - - - 54,668 54,668 - 54,668
Movement in
deferred tax
liability
on cash flow
hedges - - - (9,294) (9,294) - (9,294)
Total
comprehensive
income - - 76,996 63,025 140,021 6,721 146,742
Re-issue of
treasury shares - 25 - - 25 - 25
Share based
payment - - - 3,711 3,711 - 3,711
Dividends - - (92,470) - (92,470) - (92,470)
----------------------- ---------------------------- ----------------------- --------------------- ----------------------- ------------------------- --------------------
At 30 September
2020 17,422 882,912 1,466,814 170,832 2,537,980 61,486 2,599,466
----------------------- ---------------------------- ----------------------- --------------------- ----------------------- ------------------------- --------------------
For the year Attributable to owners of the
ended 31 March Parent Company
2021
------------------------------------------------------------------------------------------------------------------------------
Other Non-
Share Share Retained reserves controlling Total
capital premium earnings (note Total interests equity
10)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2020 17,422 882,887 1,482,288 104,096 2,486,693 54,765 2,541,458
Profit for the
period - - 292,619 - 292,619 10,184 302,803
Currency
translation - - - (51,267) (51,267) (2,260) (53,527)
Group defined
benefit pension
obligations:
- remeasurements - - 254 - 254 - 254
- movement in
deferred tax
asset - - 159 - 159 - 159
Movements
relating to
cash
flow hedges - - - 67,961 67,961 - 67,961
Movement in
deferred tax
liability
on cash flow
hedges - - - (11,554) (11,554) - (11,554)
Total
comprehensive
income - - 293,032 5,140 298,172 7,924 306,096
Re-issue of
treasury shares - 37 - - 37 - 37
Share based
payment - - - 6,055 6,055 - 6,055
Non-controlling
interest
arising
on acquisition - - - - - 323 323
Dividends - - (143,523) - (143,523) (4,802) (148,325)
----------------------- ---------------------------- ----------------------- --------------------- ----------------------- ------------------------- --------------------
At 31 March 2021 17,422 882,924 1,631,797 115,291 2,647,434 58,210 2,705,644
----------------------- ---------------------------- ----------------------- --------------------- ----------------------- ------------------------- --------------------
Group Cash Flow Statement
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
Notes GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Profit for the period 90,695 83,598 302,803
Add back non-operating expenses/(income)
- tax 24,273 18,480 62,278
- share of equity accounted investments'
profit (390) (62) (233)
- net operating exceptionals 18,305 14,703 40,495
- net finance costs 26,332 28,845 58,002
---------- ---------- ----------
Group operating profit before
exceptionals 159,215 145,564 463,345
Share-based payments expense 3,562 3,711 6,055
Depreciation (including right-of-use
leased assets) 101,428 92,303 192,572
Amortisation of intangible assets 36,566 30,534 66,898
(Profit)/loss on disposal of property,
plant and equipment (3,746) 3 (5,263)
Amortisation of government grants (9) (7) (36)
Other 1,470 (2,344) 2,418
(Increase)/decrease in working
capital (183,210) (28,375) 177,670
---------- ---------- ----------
Cash generated from operations
before exceptionals 115,276 241,389 903,659
Exceptionals (10,564) (19,257) (29,358)
---------- ---------- ----------
Cash generated from operations 104,712 222,132 874,301
Interest paid (including lease
interest) (35,281) (44,989) (84,342)
Income tax paid (34,894) (16,967) (62,191)
---------- ---------- ----------
Net cash flows from operating
activities 34,537 160,176 727,768
---------- ---------- ----------
Investing activities
Inflows:
Proceeds from disposal of property,
plant and equipment 11,148 1,056 15,898
Proceeds on disposal of equity accounted 778 - -
investment
Government grants received in relation
to property, plant and equipment - - 89
Interest received 12,033 15,155 27,930
23,959 16,211 43,917
---------- ---------- ----------
Outflows:
Purchase of property, plant and
equipment (78,187) (88,615) (162,879)
Acquisition of subsidiaries 12 (141,281) (72,685) (236,232)
Payment of accrued acquisition
related liabilities (21,140) (25,801) (36,330)
---------- ---------- ----------
(240,608) (187,101) (435,441)
---------- ---------- ----------
Net cash flows from investing
activities (216,649) (170,890) (391,524)
---------- ---------- ----------
Financing activities
Inflows:
Proceeds from issue of shares 394 25 37
Net cash inflow on derivative
financial instruments 31,475 50,697 68,554
Increase in interest-bearing loans
and borrowings - 320,000 320,000
31,869 370,722 388,591
---------- ---------- ----------
Outflows:
Repayment of interest-bearing
loans and borrowings (105,166) (439,185) (437,612)
Repayment of lease creditors (31,173) (28,302) (59,279)
Dividends paid to owners of the
Parent Company 9 (106,304) (92,470) (143,523)
Dividends paid to non-controlling
interests (502) - (4,802)
(243,145) (559,957) (645,216)
---------- ---------- ----------
Net cash flows from financing
activities (211,276) (189,235) (256,625)
---------- ---------- ----------
Change in cash and cash equivalents (393,388) (199,949) 79,619
Translation adjustment 11,761 9,469 (47,496)
Cash and cash equivalents at beginning
of period 1,716,896 1,684,773 1,684,773
---------- ---------- ----------
Cash and cash equivalents at end
of period 1,335,269 1,494,293 1,716,896
---------- ---------- ----------
Cash and cash equivalents consists
of:
Cash and short-term bank deposits 11 1,437,725 1,574,329 1,786,556
Overdrafts 11 (102,456) (80,036) (69,660)
1,335,269 1,494,293 1,716,896
---------- ---------- ----------
Notes to the Condensed Financial Statements
for the six months ended 30 September 2021
1. Basis of Preparation
The Group condensed interim financial statements which should be
read in conjunction with the annual financial statements for the
year ended 31 March 2021 have been prepared in accordance with the
Transparency (Directive 2004/109/EC) Regulations 2007, the related
Transparency rules of the Irish Financial Services Regulatory
Authority and in accordance with IAS 34 Interim Financial Reporting
as adopted by the European Union.
The preparation of the interim financial statements requires
management to make judgements, estimates and assumptions that
affect the application of policies and reported amounts of certain
assets, liabilities, revenues and expenses together with disclosure
of contingent assets and liabilities. Estimates and underlying
assumptions are reviewed on an ongoing basis.
These condensed interim financial statements for the six months
ended 30 September 2021 and the comparative figures for the six
months ended 30 September 2020 are unaudited and have not been
reviewed by the Auditors. The summary financial statements for the
year ended 31 March 2021 represent an abbreviated version of the
Group's full accounts for that year, on which the Auditors issued
an unqualified audit report and which have been filed with the
Registrar of Companies .
2. Accounting Policies
The accounting policies and methods of computation adopted in
the preparation of the Group condensed interim financial statements
are consistent with those applied in the 2021 Annual Report and are
described in those financial statements on pages 206 to 214.
The following changes to IFRS became effective for the Group
during the period but did not result in material changes to the
Group's consolidated financial statements:
-- Interest Rate Benchmark Reform - Phase 2 (Amendments to IFRS
9, IAS 39, IFRS 7, IFRS 4 and IFRS 16)
-- Covid 19-Related Rent Concessions beyond 30 June 2021 (Amendment to IFRS 16)
The Group has not applied certain new standards, amendments and
interpretations to existing standards that have been issued but are
not yet effective. They are either not expected to have a material
effect on the consolidated financial statements or they are not
currently relevant for the Group.
3. Going Concern
Having reassessed the principal risks facing the Group (as
detailed on pages 85 to 89 of the 2021 Annual Report), the
Directors believe that the Group is well placed to manage these
risks successfully. No concerns or material uncertainties have been
identified as part of our assessment.
The Directors have a reasonable expectation that DCC plc, and
the Group as a whole, has adequate resources to continue in
operational existence for the foreseeable future, a period of not
less than twelve months from the date of this report. For this
reason, the Directors continue to adopt the going concern basis of
accounting in preparing the condensed interim financial statements
.
4. Reporting Currency
The Group's financial statements are presented in sterling,
denoted by the symbol 'GBP'. Results and cash flows of operations
based in non-sterling countries have been translated into sterling
at average rates for the period, and the related balance sheets
have been translated at the rates of exchange ruling at the balance
sheet date. The principal exchange rates used for translation of
results and balance sheets into sterling were as follows:
Average rate Closing rate
---------------------------------------- ----------------------------------------
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30 Sept. 30 Sept. 31 March 30 Sept. 30 Sept. 31 March
2021 2020 2021 2021 2020 2021
StgGBP1= StgGBP1= StgGBP1= StgGBP1= StgGBP1= StgGBP1=
Euro 1.1652 1.1183 1.1182 1.1621 1.0960 1.1736
Danish
Krone 8.6661 8.3370 8.3295 8.6415 8.1611 8.7282
Swedish
Krona 11.8445 11.7989 11.6205 11.8167 11.5863 12.0154
Norwegian
Krone 11.8558 12.2289 12.0742 11.8129 12.1666 11.7304
US Dollar 1.3909 1.2665 1.3036 1.3456 1.2832 1.3760
Hong Kong
Dollar 10.8076 9.8172 10.1056 10.4804 9.9454 10.6975
5. Segmental Reporting
DCC is an international sales, marketing and support services
group headquartered in Dublin, Ireland. Operating segments are
reported in a manner consistent with the internal reporting
provided to the chief operating decision maker. The chief operating
decision maker has been identified as Mr. Donal Murphy, Chief
Executive and his executive management team. The Group is organised
into four operating segments (as identified under IFRS 8 Operating
Segments) and generates revenue through the following
activities:
DCC LPG is a leading liquefied ('LPG') sales and marketing
business, supplying LPG in cylinder and bulk format to residential,
commercial and industrial customers. In addition, DCC LPG is
developing a broader customer offering through the supply of
natural gas, power and renewables products, plus a range of
specialty gases such as refrigerants and medical gases.
DCC Retail & Oil is a leading provider of transport and
heating energy, lower emission fuels and biofuels, and related
services to consumers and SME businesses across Europe and has a
key focus on being a market leader in providing sustainable energy
solutions to consumers.
DCC Healthcare is a leading healthcare business, providing
products and services to health and beauty brand owners and
healthcare providers.
DCC Technology is a leading route-to-market and supply chain
partner for global technology brands and customers. DCC Technology
provides a broad range of consumer, business and enterprise
technology products and services to retailers, resellers and
integrators.
The chief operating decision maker monitors the operating
results of segments separately in order to allocate resources
between segments and to assess performance. Segment performance is
predominantly evaluated based on operating profit before
amortisation of intangible assets and net operating exceptional
items. Net finance costs and income tax are managed on a
centralised basis and therefore these items are not allocated
between operating segments for the purpose of presenting
information to the chief operating decision maker and accordingly
are not included in the detailed segmental analysis.
The consolidated total assets of the Group as at 30 September
2021 amounted to GBP8.1 billion. This figure was not materially
different from the equivalent figure at 31 March 2021 and therefore
the related segmental disclosure note has been omitted in
accordance with IAS 34 Interim Financial Reporting. Intersegment
revenue is not material and thus not subject to separate
disclosure.
An analysis of the Group's performance by segment and geographic
location is as follows:
(a) By operating segment
Unaudited six months ended 30 September 2021
-----------------------------------------------------------------------------
DCC DCC DCC DCC
LPG Retail & Oil Healthcare Technology Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segment revenue 862,268 4,286,533 384,224 1,985,304 7,518,329
-------- ----------- ---------------- --------- --------------
Adjusted operating profit 48,369 70,022 50,203 27,187 195,781
Amortisation of intangible
assets (21,798) (4,255) (1,804) (8,709) (36,566)
Net operating exceptionals
(note 6) (6,036) (1,631) (789) (9,849) (18,305)
-------- ----------- ---------------- --------- --------------
Operating profit 20,535 64,136 47,610 8,629 140,910
-------- ----------- ---------------- --------- --------------
Unaudited six months ended 30 September 2020
---------------------------------------------------------------------------------
DCC DCC DCC DCC
LPG Retail & Oil Healthcare Technology Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segment revenue 578,314 3,061,937 322,009 1,968,834 5,931,094
-------- ----------- ---------------- --------- --------------
Adjusted operating profit 45,557 65,172 39,840 25,529 176,098
Amortisation of intangible
assets (16,689) (1,681) (3,150) (9,014) (30,534)
Net operating exceptionals
(note 6) (6,839) (246) (326) (7,292) (14,703)
-------- ----------- ---------------- --------- --------------
Operating profit 22,029 63,245 36,364 9,223 130,861
-------- ----------- ---------------- --------- --------------
Audited year ended 31 March 2021
--------------------------------------------------------------------------------------
DCC DCC DCC DCC
LPG Retail & Oil Healthcare Technology Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segment revenue 1,685,570 6,588,186 655,364 4,483,330 13,412,450
--------- ----------- ---------------- -------------- -------------
Adjusted operating profit 231,253 144,824 81,721 72,445 530,243
Amortisation of intangible
assets (37,829) (4,926) (5,504) (18,639) (66,898)
Net operating exceptionals
(note 6) (17,732) (5,261) (4,229) (13,273) (40,495)
--------- ----------- ---------------- -------------- -------------
Operating profit 175,692 134,637 71,988 40,533 422,850
--------- ----------- ---------------- -------------- -------------
(b) By geography
The Group has a presence in 20 countries worldwide. The
following represents a geographical revenue analysis about the
country of domicile (Republic of Ireland) and countries with
material revenue representing over 10% of Group revenue.
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
Republic of Ireland 588,902 370,466 901,802
United Kingdom 3,122,439 2,637,784 5,932,234
France 1,383,777 1,051,881 2,442,082
Other 2,423,211 1,870,963 4,136,332
---------- ---------- -------------------
7,518,329 5,931,094 13,412,450
---------- ---------- -------------------
(c) Disaggregation of revenue
The following table disaggregates revenue by primary geographical market,
major revenue lines and timing of revenue recognition. The use of revenue
as a metric of performance in the Group's LPG and Retail & Oil segments
is of limited relevance due to the influence of changes in underlying
oil product costs on absolute revenues. Whilst changes in underlying
oil product costs will change percentage operating margins, this has
little relevance in the downstream energy distribution market in which
these two segments operate where profitability is driven by absolute
contribution per tonne/litre of product sold, and not a percentage
margin. Accordingly, management review geographic volume performance
rather than geographic revenue performance for these two segments as
country-specific GDP and weather patterns can influence volumes. The
disaggregated revenue information presented below for DCC Healthcare
and Technology, which can also be influenced by country-specific GDP
movements, is consistent with how revenue is reported and reviewed
internally.
Unaudited six months ended 30 September 2021
------------------------------------------------------------------------------
DCC DCC DCC DCC
LPG Retail & Oil Healthcare Technology Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Republic of Ireland (country
of domicile) 73,411 289,173 60,088 166,230 588,902
United Kingdom 167,833 1,780,427 208,998 965,181 3,122,439
France 376,626 848,666 - 158,485 1,383,777
Other 244,398 1,368,267 1 15,138 695,408 2,423,211
------- --------- ---------------- --------- ---------
862,268 4,286,533 384,224 1,985,304 7,518,329
------- --------- ---------------- --------- ---------
LPG and related products 862,268 - - - 862,268
Oil and related products - 4,286,533 - - 4,286,533
Nutrition and health &
beauty products - - 179,759 - 179,759
Medical and pharmaceutical
products - - 204,465 - 204,465
Technology products and
services - - - 1,985,304 1,985,304
862,268 4,286,533 384,224 1,985,304 7,518,329
------- --------- ---------------- --------- ---------
Products transferred at
point in time 862,268 4,286,533 384,224 1,985,304 7,518,329
------- --------- ---------------- --------- ---------
Unaudited six months ended 30 September 2020
-------------------------------------------------------------------------------
DCC DCC DCC DCC
LPG Retail & Oil Healthcare Technology Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Republic of Ireland (country
of domicile) 41,988 142,456 46,537 139,485 370,466
United Kingdom 120,744 1,194,942 192,747 1,129,351 2,637,784
France 273,222 643,211 - 135,448 1,051,881
Other 142,360 1,081,328 82,725 564,550 1,870,963
------- --------- ---------------- --------- ---------
578,314 3,061,937 322,009 1,968,834 5,931,094
------- --------- ---------------- --------- ---------
LPG and related products 578,314 - - - 578,314
Oil and related products - 3,061,937 - - 3,061,937
Nutrition and health &
beauty products - - 176,369 - 176,369
Medical and pharmaceutical
products - - 145,640 - 145,640
Technology products and
services - - - 1,968,834 1,968,834
578,314 3,061,937 322,009 1,968,834 5,931,094
------- --------- ---------------- --------- ---------
Products transferred at
point in time 578,314 3,061,937 322,009 1,968,834 5,931,094
------- --------- ---------------- --------- ---------
Audited year ended 31 March 2021
------------------------------------------------------------------------------------------
DCC DCC DCC DCC
LPG Retail & Oil Healthcare Technology Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Republic of Ireland (country
of domicile) 130,842 340,285 103,364 327,311 901,802
United Kingdom 330,907 2,699,344 373,413 2,528,570 5,932,234
France 767,199 1,348,429 - 326,454 2,442,082
Other 456,622 2,200,128 178,587 1,300,995 4,136,332
--------- --------- ---------------- --------- ----------
1,685,570 6,588,186 655,364 4,483,330 13,412,450
--------- --------- ---------------- --------- ----------
LPG and related products 1,685,570 - - - 1,685,570
Oil and related products - 6,588,186 - - 6,588,186
Nutrition and health &
beauty products - - 373,824 - 373,824
Medical and pharmaceutical
products - - 281,540 - 281,540
Technology products and
services - - - 4,483,330 4,483,330
--------- --------- ---------------- --------- ----------
1,685,570 6,588,186 655,364 4,483,330 13,412,450
--------- --------- ---------------- --------- ----------
Products transferred at
point in time 1,685,570 6,588,186 655,364 4,483,330 13,412,450
--------- --------- ---------------- --------- ----------
6. Exceptionals
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
Restructuring and integration costs (5,344) (12,657) (26,724)
Acquisition and related costs (5,782) (1,921) (13,604)
Adjustments to contingent acquisition consideration (8,000) 27 27
Other operating exceptional items 821 (152) (194)
Net operating exceptional items (18,305) (14,703) (40,495)
Mark to market of swaps and related debt 967 1,406 1,384
---------- ---------- ---------
Net exceptional items before taxation (17,338) (13,297) (39,111)
Income tax (charge)/credit attaching to exceptional
items (184) (226) 4,104
---------- ---------- ---------
Net exceptional items attributable to owners
of the Parent (17,522) (13,523) (35,007)
---------- ---------- ---------
Adjustments to contingent acquisition consideration reflects an
increase in the provision for deferred consideration likely payable
in respect of two acquisitions in DCC Technology where the trading
performance in North America has been very strong and ahead of
expectations. In accordance with IFRS 3, this increase in the fair
value of contingent consideration is recognised as a charge in the
Income Statement.
Acquisition and related costs include the professional fees and
tax costs (such as stamp duty) relating to the evaluation and/or
completion of acquisition opportunities and amounted to GBP5.782
million.
Restructuring and integration costs of GBP5.344 million
primarily relates to the restructuring and integration of
operations across a number of businesses and acquisitions. The most
material item relates to DCC LPG, where a project is underway in
France to enhance the efficiency of its operating
infrastructure.
Most of the Group's debt has been raised in the US private
placement market, denominated in US dollars, euro and sterling.
Long-term interest and cross currency interest rate derivatives
have been utilised to achieve an appropriate mix of fixed and
floating rate debt across the three currencies. The level of
ineffectiveness calculated under IAS 39 on the fair value and cash
flow hedge relationships relating to this debt is charged or
credited as an exceptional item. In the six months ended 30
September 2021, this amounted to an exceptional non-cash gain of
GBP0.967 million. Following this credit, the cumulative net
exceptional credit taken in respect of the Group's outstanding US
Private Placement debt and related hedging instruments is GBP0.300
million. This, or any subsequent similar non-cash charges or gains,
will net to zero over the remaining term of this debt and the
related hedging instruments.
7. Taxation
The taxation expense for the interim period is based on
management's best estimate of the weighted average tax rate that is
expected to be applicable for the full year. The Group's effective
tax rate for the period was 18% (six months ended 30 September
2020: 17% and year ended 31 March 2021: 17%).
8. Earnings per Ordinary Share
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
Profit attributable to owners of the Parent 84,507 78,614 292,619
Amortisation of intangible assets after
tax 30,328 23,994 53,234
Exceptionals after tax 17,522 13,523 35,007
---------- ---------- ---------
Adjusted profit after taxation and non-controlling
interests 132,357 116,131 380,860
---------- ---------- ---------
Basic earnings per ordinary share
Basic earnings per share is calculated by dividing the profit
attributable to owners of the Parent Company by the weighted
average number of ordinary shares in issue during the period,
excluding ordinary shares purchased by the Company and held as
treasury shares. The adjusted figures for basic earnings per
ordinary share (a non-GAAP financial measure) are intended to
demonstrate the results of the Group after eliminating the impact
of amortisation of intangible assets and net exceptionals.
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
pence pence pence
Basic earnings per ordinary share 85.71p 79.83p 297.04p
Amortisation of intangible assets after
tax 30.76p 24.37p 54.04p
Exceptionals after tax 17.77p 13.73p 35.54p
---------- ---------- -----------
Adjusted basic earnings per ordinary
share 134.24p 117.93p 386.62p
---------- ---------- -----------
Weighted average number of ordinary shares
in issue (thousands) 98,596 98,472 98,510
---------- ---------- -----------
Diluted earnings per ordinary share
Diluted earnings per ordinary share is calculated by adjusting
the weighted average number of ordinary shares outstanding to
assume conversion of all dilutive potential ordinary shares. Share
options and awards are the Company's only category of dilutive
potential ordinary shares. The adjusted figures for diluted
earnings per ordinary share (a non-GAAP financial measure) are
intended to demonstrate the results of the Group after eliminating
the impact of amortisation of intangible assets and net
exceptionals.
Employee share options and awards, which are performance-based,
are treated as contingently issuable shares because their issue is
contingent upon satisfaction of specified performance conditions in
addition to the passage of time. These contingently issuable shares
are excluded from the computation of diluted earnings per ordinary
share where the conditions governing exercisability would not have
been satisfied as at the end of the reporting period if that were
the end of the vesting period.
The adjusted figures for diluted earnings per ordinary share (a
non-GAAP financial measure) are intended to demonstrate the results
of the Group after eliminating the impact of amortisation of
intangible assets and net exceptionals.
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
pence pence pence
Diluted earnings per ordinary share 85.66p 79.70p 296.62p
Amortisation of intangible assets after
tax 30.74p 24.33p 53.96p
Exceptionals after tax 17.76p 13.71p 35.49p
---------- ---------- ---------
Adjusted diluted earnings per ordinary
share 134.16p 117.74p 386.07p
---------- ---------- ---------
Weighted average number of ordinary shares
in issue (dilutive, thousands) 98,654 98,634 98,650
---------- ---------- ---------
The earnings used for the purposes of the diluted earnings per
ordinary share calculations were GBP84.507 million (six months
ended 30 September 2020: GBP78.614 million) and GBP132.357 million
(six months ended 30 September 2020: GBP116.131 million) for the
purposes of the adjusted diluted earnings per ordinary share
calculations. The weighted average number of ordinary shares used
in calculating the diluted earnings per ordinary share for the six
months ended 30 September 2021 was 98.654 million (six months ended
30 September 2020: 98.634 million). A reconciliation of the
weighted average number of ordinary shares used for the purposes of
calculating the diluted earnings per ordinary share amounts is as
follows:
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
'000 '000 '000
Weighted average number of ordinary shares
in issue 98,596 98,472 98,510
Dilutive effect of options and awards 58 162 140
--------- --------- --------
Weighted average number of ordinary shares
for diluted earnings per share 98,654 98,634 98,650
--------- --------- --------
9. Dividends
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
Interim - paid 51.95 pence per share on
9 December 2020 - - 51,045
Final - paid 107.85 pence per share
on 22 July 2021
(paid 95.79 pence per share on 23 July
2020) 106,304 92,470 92,478
106,304 92,470 143,523
---------------------- ------------------------- ---------
On 8 November 2021, the Board approved an interim dividend of
55.85 pence per share (GBP55.074 million). These condensed interim
financial statements do not reflect this dividend payable.
10. Other Reserves
For the six months ended Foreign
30 September 2021
Share based Cash flow currency
payment hedge translation Other
reserve reserve reserve reserves Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2021 40,969 13,130 60,260 932 115,291
Currency translation - - 16,853 - 16,853
Movements relating to cash
flow hedges - 105,035 - - 105,035
Movement in deferred tax liability
on cash flow hedges - (19,065) - - (19,065)
Share based payment 3,562 - - - 3,562
----------- --------- ----------- -------- --------
At 30 September 2021 44,531 99,100 77,113 932 221,676
----------- --------- ----------- -------- --------
For the six months ended Foreign
30 September 2020
Share based Cash flow currency
payment hedge translation Other
reserve reserve reserve reserves Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2020 34,914 (43,277) 111,527 932 104,096
Currency translation - - 17,651 - 17,651
Movements relating to cash
flow hedges - 54,668 - - 54,668
Movement in deferred tax liability
on cash flow hedges - (9,294) - - (9,294)
Share based payment 3,711 - - - 3,711
----------- --------- ----------- -------- --------
At 30 September 2020 38,625 2,097 129,178 932 170,832
----------- --------- ----------- -------- --------
For the year ended 31 March Foreign
2021
Share based Cash flow currency
payment hedge translation Other
reserve reserve reserve reserves Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2020 34,914 (43,277) 111,527 932 104,096
Currency translation - - (51,267) - (51,267)
Movements relating to cash
flow hedges - 67,961 - - 67,961
Movement in deferred tax liability
on cash flow hedges - (11,554) - - (11,554)
Share based payment 6,055 - - - 6,055
----------- --------- ----------- -------- --------
At 31 March 2021 40,969 13,130 60,260 932 115,291
----------- --------- ----------- -------- --------
11. Analysis of Net Debt
Unaudited Unaudited Audited
30 Sept. 30 Sept. 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
Non-current assets:
Derivative financial instruments 126,079 178,094 121,671
------------ ------------ -----------------
Current assets:
Derivative financial instruments 150,744 33,389 40,181
Cash and cash equivalents 1,437,725 1,574,329 1,786,556
------------ ------------ -----------------
1,588,469 1,607,718 1,826,737
------------ ------------ -----------------
Non-current liabilities:
Derivative financial instruments - (687) (652)
Unsecured Notes (1,568,450) (1,716,427) (1,553,200)
------------ ------------ -----------------
(1,568,450) (1,717,114) (1,553,852)
------------ ------------ -----------------
Current liabilities:
Derivative financial instruments (53,140) (11,896) (9,843)
Bank borrowings (102,456) (80,036) (69,660)
Unsecured Notes (44,652) (113,963) (149,999)
------------ ------------ -----------------
(200,248) (205,895) (229,502)
------------ ------------ -----------------
Net (debt)/cash (excluding lease
creditors) (54,150) (137,197) 165,054
------------ ------------ -----------------
Lease creditors - non-current (275,859) (256,747) (261,617)
Lease creditors - current (60,322) (47,009) (53,607)
------------ ------------ -----------------
Total lease creditors (336,181) (303,756) (315,224)
------------ ------------ -----------------
Net debt (including lease creditors) (390,331) (440,953) (150,170)
------------ ------------ -----------------
An analysis of the maturity profile of the Group's net debt
(including lease creditors) at 30 September 2021 is as follows:
Between Between
Less than 1 and 2 and Over
2 5
1 year years years 5 years Total
At 30 September 2021 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cash and short-term deposits 1,437,725 - - - 1,437,725
Overdrafts (102,456) - - - (102,456)
--------- --------- ------------- --------- -----------
Cash and cash equivalents 1,335,269 - - - 1,335,269
Unsecured Notes (44,652) (255,330) (626,845) (686,275) (1,613,102)
Derivative financial instruments
- Unsecured Notes 6,995 34, 803 77,200 14, 076 133,074
Derivative financial instruments
- other 90,609 - - - 90,609
--------- --------- ------------- --------- -----------
Net debt (excluding lease creditors)
1,388,221 (220,527) (549,645) (672,199) (54,150)
Lease creditors (60,322) (51,354) (103,073) (121,432) (336,181)
--------- --------- ------------- --------- -----------
Net debt (including lease
creditors) 1,327,899 (271,881) (652,718) (793,631) (390,331)
--------- --------- ------------- --------- -----------
The Group's Unsecured Notes fall due between 24 March 2022 and 4
April 2034 with an average maturity of 5.0 years at 30 September
2021. The full fair value of a hedging derivative is allocated to
the time period corresponding to the maturity of the hedged
item.
12. Business Combinations
A key strategy of the Group is to create and sustain market
leadership positions through acquisitions in markets it currently
operates in, together with extending the Group's footprint into new
geographic markets. In line with this strategy, the principal
acquisitions completed by the Group during the period, together
with percentages acquired, were as follows:
-- The acquisition by DCC Healthcare in June 2021 of Wörner
Medizinprodukte Holding GmbH ("Wörner"), a leading supplier of
medical and laboratory products to the primary care sector in
Germany and Switzerland. Wörner sells a broad product range to
approximately 20,000 customers annually, including general
practitioners, primary care centres, specialist medical centres and
laboratories;
-- The acquisition by DCC LPG of 100% of Primagaz from SHV
Energy in July 2021. The business focuses on the bulk and cylinder
LPG markets, and serves approximately 10,000 customers annually;
and
-- The acquisition by DCC Retail & Oil in September 2021 of
a network of 19 retail forecourt sites in Luxembourg. Most of the
sites are Gulf branded with established convenience retail
operations under the Cactus Shoppi brand which DCC will
operate.
The acquisition data presented below reflects the fair value of
the identifiable net assets acquired (excluding cash and cash
equivalents acquired) in respect of acquisitions completed during
the six months ended 30 September 2021.
6 months 6 months
ended ended
30 Sept. 30 Sept.
2021 2020
GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 29,840 6,867
Right-of-use leased assets 21,793 -
Deferred income tax assets 376 7
------------------ ------------------
Total non-current assets 52,009 6,874
------------------ ------------------
Current assets
Inventories 23,262 100
Trade and other receivables 26,999 617
------------------ ------------------
Total current assets 50,261 717
------------------ ------------------
Liabilities
Non-current liabilities
Lease creditors (18,617) -
Provisions for liabilities and
charges (7,879) -
Total non-current liabilities (26,496) -
------------------ ------------------
Current liabilities
Trade and other payables (54,630) (251)
Current income tax liability (1,337) (195)
Lease creditors (3,176) -
Total current liabilities (59,143) (446)
------------------ ------------------
Identifiable net assets acquired 16,631 7,145
Non-controlling interest arising
on acquisition (2,058) -
Intangible assets - goodwill 152,471 67,330
------------------ ------------------
Total consideration 167,044 74,475
------------------ ------------------
Satisfied by:
Cash 152,865 82,341
Cash and cash equivalents acquired (11,584) (9,656)
------------------ ------------------
Net cash outflow 141,281 72,685
Acquisition related liabilities 25,763 1,790
------------------ ------------------
Total consideration 167,044 74,475
------------------ ------------------
None of the business combinations completed during the period
were considered sufficiently material to warrant separate
disclosure of the fair values attributable to those
combinations.
There were no adjustments made to the carrying amounts of assets
and liabilities acquired in arriving at their fair values. The
initial assignment of fair values to identifiable net assets
acquired has been performed on a provisional basis in respect of a
number of the business combinations above given the timing of
closure of these transactions. Any amendments to these fair values
within the twelve-month timeframe from the date of acquisition will
be disclosable in the Group's condensed interim financial
statements for the six months ending 30 September 2022 as
stipulated by IFRS 3.
The principal factors contributing to the recognition of
goodwill on business combinations entered into by the Group are the
expected profitability of the acquired business and the realisation
of cost savings and synergies with existing Group entities.
Acquisition and related costs included in other operating
expenses in the Group Income Statement amounted to GBP5.782 million
(six months ended 30 September 2020: GBP1.921 million).
No contingent liabilities were recognised on the acquisitions
completed during the financial period or the prior financial
years.
The gross contractual value of trade and other receivables as at
the respective dates of acquisition amounted to GBP27.431 million.
The fair value of these receivables is GBP26.999 million (all of
which is expected to be recoverable).
None of the goodwill recognised in respect of acquisitions
completed during the period is expected to be deductible for tax
purposes.
The fair value of contingent consideration recognised at the
date of acquisition is calculated by discounting the expected
future payment to present value at the acquisition date. In
general, for contingent consideration to become payable,
pre-defined profit thresholds must be exceeded. On an undiscounted
basis, the future payments for which the Group may be liable for
acquisitions completed during the period range from nil to GBP40.7
million.
The acquisitions during the period contributed GBP123.5 million
to revenues and GBP5.6 million to profit after tax. The revenue and
profit of the Group determined in accordance with IFRS for the
period ended 30 September 2021 would not have been materially
different than reported in the Income Statement if the acquisition
date for all business combinations completed during the period had
been as of the beginning of the period.
13. Post Employment Benefit Obligations
The Group's defined benefit pension schemes' assets were
measured at fair value at 30 September 2021. The defined benefit
pension schemes' liabilities at 30 September 2021 were updated to
reflect material movements in underlying assumptions.
The Group's post employment benefit obligations moved from a net
asset of GBP8.024 million at 31 March 2021 to a net asset of
GBP5.517 million at 30 September 2021. This movement was primarily
driven by an actuarial loss on liabilities arising from a decrease
in the discount rates used to value these liabilities .
The following actuarial assumptions have been made in
determining the Group's retirement benefit obligation for the six
months ended 30 September 2021:
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
Discount rate
- Republic of Ireland 1.30% 1.25% 1.50%
- United Kingdom 2.00% 1.75% 2.20%
- Germany 1.30% 1.25% 1.50%
---------- ---------- ---------
14. Seasonality of Operations
The Group's operations are significantly second-half weighted
primarily due to a portion of the demand for DCC's LPG and Retail
& Oil products being weather dependent and seasonal buying
patterns in DCC Technology.
15. Related Party Transactions
There have been no related party transactions or changes in the
nature and scale of the related party transactions described in the
2021 Annual Report that could have had a material impact on the
financial position or performance of the Group in the six months
ended 30 September 2021.
16. Events after the Balance Sheet Date
There have been no material events subsequent to 30 September
2021 which would require disclosure in this Report.
17. Board Approval
This report was approved by the Board of Directors of DCC plc on
8 November 2021.
18. Distribution of Interim Report
This report and further information on DCC is available at the
Company's website www.dcc.ie. A printed copy is available to the
public at the Company's registered office at DCC House,
Leopardstown Road, Foxrock, Dublin 18, Ireland.
Statement of Directors' Responsibilities
We confirm that to the best of our knowledge:
-- the condensed set of interim financial statements for the six
months ended 30 September 2021 have been prepared in accordance
with IAS 34 Interim Financial Reporting as adopted by the EU;
and
-- the interim management report includes a fair review of the information required by:
-- Regulation 8(2) of the Transparency (Directive 2004/109/EC)
Regulations 2007, being an indication of important events that have
occurred during the first six months of the financial year and
their impact on the condensed set of financial statements; and a
description of the principal risks and uncertainties for the
remaining six months of the year; and
-- Regulation 8(3) of the Transparency (Directive 2004/109/EC)
Regulations 2007, being related party transactions that have taken
place in the first six months of the current financial year and
that have materially affected the financial position or performance
of the entity during that period; and any changes in the related
party transactions described in the last annual report that could
do so.
On behalf of the Board
Mark Breuer Donal Murphy
Chairman Chief Executive
8 November 2021
Supplementary Financial Information
Alternative Performance Measures
The Group reports certain alternative performance measures
('APMs') that are not required under International Financial
Reporting Standards ('IFRS') which represent the generally accepted
accounting principles ('GAAP') under which the Group reports. The
Group believes that the presentation of these APMs provides useful
supplemental information which, when viewed in conjunction with our
IFRS financial information, provides investors with a more
meaningful understanding of the underlying financial and operating
performance of the Group and its divisions.
These APMs are primarily used for the following purposes:
-- to evaluate the historical and planned underlying results of
our operations;
-- to set director and management remuneration; and
-- to discuss and explain the Group's performance with the
investment analyst community.
None of the APMs should be considered as an alternative to
financial measures derived in accordance with GAAP. The APMs can
have limitations as analytical tools and should not be considered
in isolation or as a substitute for an analysis of our results as
reported under GAAP. These performance measures may not be
calculated uniformly by all companies and therefore may not be
directly comparable with similarly titled measures and disclosures
of other companies.
The principal APMs used by the Group, together with
reconciliations where the non-GAAP measures are not readily
identifiable from the financial statements, are as follows:
Adjusted operating profit ('EBITA')
Definition
This comprises operating profit as reported in the Group Income
Statement before net operating exceptional items and amortisation
of intangible assets. Net operating exceptional items and
amortisation of intangible assets are excluded in order to assess
the underlying performance of our operations. In addition, neither
metric forms part of Director or management remuneration
targets.
6 months 6 months
ended ended Year ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
------------------------------------- --------- --------- -------------
Operating profit 140,910 130,861 422,850
Net operating exceptional items 18,305 14,703 40,495
Amortisation of intangible assets 36,566 30,534 66,898
------------------------------------- --------- --------- -------------
Adjusted operating profit ('EBITA') 195,781 176,098 530,243
------------------------------------- --------- --------- -------------
Net interest
Definition
The Group defines net interest as the net total of finance costs
and finance income before interest related exceptional items as
presented in the Group Income Statement.
6 months 6 months
ended ended Year ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
----------------------------------------- --------- --------- -------------
Finance costs before exceptional items (39,355) (45,070) (85,639)
Finance income before exceptional items 12,056 14,819 26,253
----------------------------------------- --------- --------- -------------
Net interest (27,299) (30,251) (59,386)
----------------------------------------- --------- --------- -------------
Constant currency
Definition
The translation of foreign denominated earnings can be impacted
by movements in foreign exchange rates versus sterling, the Group's
presentation currency. In order to present a better reflection of
underlying performance in the period, the Group retranslates
foreign denominated current year earnings at prior year exchange
rates.
6 months 6 months
ended ended
30 Sept. 30 Sept.
2021 2020
Calculation: Revenue - constant currency GBP'000 GBP'000
------------------------------------------ ---------- ----------
Revenue 7,518,329 5,931,094
Currency impact 172,846 -
------------------------------------------ ---------- ----------
Revenue - constant currency 7,691,175 5,931,094
------------------------------------------- ---------- ----------
6 months 6 months
ended ended
30 Sept. 30 Sept.
2021 2020
Calculation: Adjusted operating profit GBP'000 GBP'000
- constant currency
----------------------------------------------- --------- ---------
Adjusted operating profit 195,781 176,098
Currency impact 7,618 -
----------------------------------------------- --------- ---------
Adjusted operating profit - constant currency 203,399 176,098
------------------------------------------------ --------- ---------
Effective tax rate
Definition
The Group's effective tax rate expresses the income tax expense
before exceptionals and deferred tax attaching to the amortisation
of intangible assets as a percentage of EBITA less net
interest.
6 months 6 months
ended ended Year ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
---------------------------------------------- --------- --------- -------------
Adjusted operating profit 195,781 176,098 530,243
Net interest (27,299) (30,251) (59,386)
---------------------------------------------- --------- --------- -------------
Earnings before taxation 168,482 145,847 470,857
---------------------------------------------- --------- --------- -------------
Income tax expense 24,273 18,480 62,278
Income tax attaching to net exceptionals (184) (226) 4,104
Deferred tax attaching to amortisation
of intangible assets 6,238 6,540 13,664
---------------------------------------------- --------- --------- -------------
Total income tax expense before exceptionals
and deferred tax attaching to amortisation
of intangible assets 30,327 24,794 80,046
---------------------------------------------- --------- --------- -------------
Effective tax rate (%) 18.0% 17.0% 17.0%
---------------------------------------------- --------- --------- -------------
Net capital expenditure
Definition
Net capital expenditure comprises purchases of property, plant
and equipment, proceeds from the disposal of property, plant and
equipment and government grants received in relation to property,
plant and equipment.
6 months 6 months
ended ended Year ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
------------------------------------------- --------- --------- -------------
Purchase of property, plant and equipment 78,187 88,615 162,879
Government grants received in relation
to property, plant and equipment - - (89)
Proceeds from disposal of property, plant
and equipment (11,148) (1,056) (15,898)
Net capital expenditure 67,039 87,559 146,892
------------------------------------------- --------- --------- -------------
Free cash flow
Definition
Free cash flow is defined by the Group as cash generated from
operations before exceptional items as reported in the Group Cash
Flow Statement after repayment of lease creditors and net capital
expenditure.
6 months 6 months
ended ended Year ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
--------------------------------------- --------- --------- -------------
Cash generated from operations before
exceptionals 115,276 241,389 903,659
Repayment of lease creditors (35,911) (33,137) (68,986)
Net capital expenditure (67,039) (87,559) (146,892)
--------------------------------------- --------- --------- -------------
Free cash flow 12,326 120,693 687,781
--------------------------------------- --------- --------- -------------
Free cash flow (after interest and tax payments)
Definition
Free cash flow (after interest and tax payments) is defined by
the Group as free cash flow after interest paid (excluding interest
relating to lease creditors), income tax paid, dividends received
from equity accounted investments and interest received.
6 months 6 months
ended ended Year ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
-------------------------------------------- --------- --------- -------------
Free cash flow 12,326 120,693 687,781
Interest paid (excluding interest relating
to lease creditors) (30,543) (40,154) (74,635)
Income tax paid (34,894) (16,967) (62,191)
Interest received 12,033 15,155 27,930
-------------------------------------------- --------- --------- -------------
Free cash flow (after interest and tax
payments) (41,078) 78,727 578,885
-------------------------------------------- --------- --------- -------------
Committed acquisition expenditure
Definition
The Group defines committed acquisition expenditure as the total
acquisition cost of subsidiaries as presented in the Group Cash
Flow Statement (excluding amounts related to acquisitions which
were committed to in previous years) and future acquisition related
liabilities for acquisitions committed to during the period.
6 months 6 months
ended ended Year ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
------------------------------------------- ---------- --------------- -------------
Net cash outflow on acquisitions during
the period 141,281 72,685 236,232
Net cash outflow on acquisitions which
were committed to in the previous period (112,478) (22,560) (22,388)
Acquisition related liabilities arising
on acquisitions during the period 25,763 1,790 9,321
Acquisition related liabilities which
were committed to in the previous period (18,912) (417) (539)
Amounts committed in the current period 42,081 35,500 152,000
------------------------------------------- ---------- --------------- -------------
Committed acquisition expenditure 77,735 86,998 374,626
------------------------------------------- ---------- --------------- -------------
Net working capital
Definition
Net working capital represents the net total of inventories,
trade and other receivables (excluding interest receivable), and
trade and other payables (excluding interest payable, amounts due
in respect of property, plant and equipment and current government
grants).
As at As at As at
30 Sept. 30 Sept. 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
------------------------------------------- ------------ ------------ ------------
Inventories 941,545 756,464 685,950
Trade and other receivables 1,557,229 1,434,777 1,689,372
Less: interest receivable (39) (98) (16)
Trade and other payables (2,548,083) (2,202,991) (2,604,177)
Less: interest payable 14,625 10,763 11,668
Less: amounts due in respect of property,
plant and equipment 9,510 2,111 13,554
Less: government grants 17 11 20
------------------------------------------- ------------ ------------ ------------
Net working capital (25,196) 1,037 (203,629)
------------------------------------------- ------------ ------------ ------------
Working capital (days)
Definition
Working capital days measures how long it takes in days for the
Group to convert working capital into revenue.
As at As at As at
30 Sept. 30 Sept. 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
------------------------- ----------- -------------- -----------
Net working capital (25,196) 1,037 (203,629)
September/March revenue 1,485,343 1,287,071 1,468,052
------------------------- ----------- -------------- -----------
Working capital (days) (0.5 0.0 days (4.3
days) days)
------------------------- ----------- -------------- -----------
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END
IR GZMGMLRLGMZM
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