TIDMDCC
RNS Number : 9476A
DCC PLC
08 February 2022
8 February 2022
DCC plc
Interim Management Statement
Trading in line with expectations
DCC plc, the leading international sales, marketing and support
services group, is issuing this Interim Management Statement for
the third quarter ended 31 December 2021.
Third quarter ended 31 December 2021
Group operating profit for the third quarter ended 31 December
2021 was in line with expectations and ahead of the prior year. The
Group delivered a good trading performance and benefitted from
acquisitions completed in the prior year. The growth was achieved
notwithstanding the anticipated adverse impact of currency
translation. The Group continued to develop during the period and
completed the acquisition of Almo, DCC's largest acquisition to
date, at the end of the quarter.
DCC LPG traded robustly and in line with expectations during the
third quarter of the financial year, notwithstanding the
significantly increased cost of product which remained a headwind
during the quarter, particularly in the natural gas and power
segments of the division. Demand conditions improved relative to
the prior year, although some regions continued to experience
restrictions which impacted commercial customers, particularly in
the hospitality and leisure sectors. DCC LPG made further progress
in expanding its energy transition offering for customers during
the quarter, including in renewable electricity, solar and energy
management solutions.
DCC Retail & Oil again delivered strong operating profit
growth, driven by a very strong performance in Britain and Ireland.
The business benefitted from good procurement and cost control, as
well as growth in non-fuel income, lubricants and roadside
services. The division continued to develop its service offering
during the period, making further progress in the roll-out of lower
carbon fuels, electric vehicle charging and other services.
DCC Healthcare delivered good growth, driven by a very strong
performance from DCC Vital. Elective medical procedures and GP
consultations continue to be impacted by the pandemic, however DCC
Vital has continued to support healthcare systems with their
product and service needs. In addition, Wörner, acquired in April
2021, has performed strongly since acquisition. DCC Health &
Beauty Solutions performed well in the face of ongoing disruption
to business operations and supply chains as a result of the
pandemic.
DCC Technology delivered very strong growth in North America and
Continental Europe, offset, as expected, by a weaker performance in
the UK market. In North America, the business delivered very good
growth across its product portfolio and in particular in Pro AV and
Pro Audio products. The UK business continued to experience a
difficult market, with well-publicised labour, logistics and
product availability challenges. The business was also impacted
during the quarter by the implementation in late summer of a new
warehouse management system, although this is now operating
effectively. The business in Continental Europe delivered good
growth, particularly across the B2B channel.
Year ending 31 March 2022
DCC continues to expect that the year ending 31 March 2022 will
be another year of strong operating profit growth, in line with
current market consensus expectations, notwithstanding the adverse
impact of currency translation and the significant increase in the
wholesale cost of energy products.
Sustainability
Sustainability is embedded in DCC's strategy, business model and
culture. In December 2021 DCC retained its 'AAA' ESG rating with
MSCI and achieved a 'B' score from CDP, an increase of two grades
from its previous 'C' score.
Development activity
Including the acquisition of Almo (detailed below) and recent
bolt-on activity, DCC has committed approximately GBP560 million to
new acquisitions across Europe and North America since DCC's annual
results announcement in May 2021. In December 2021, DCC also
completed the previously announced acquisition of Naturgy Ireland,
a supplier of renewable power, natural gas and energy services to
large commercial and industrial customers in Ireland, following
receipt of competition clearance.
ALMO Corporation
DCC Technology completed the acquisition of Almo Corporation
("Almo" or the "Business") on 14 December 2021. The acquisition was
based on an initial enterprise value of approximately $610 million
(GBP462 million) on a cash-free, debt-free basis. Almo is one of
the largest specialist Pro AV businesses in the United States and
is a leading national distributor of consumer appliances, consumer
electronics and lifestyle products selling to integrators,
resellers, dealers, retailers and e-tailers nationwide.
The Business is headquartered in Philadelphia and employs
approximately 660 people across the United States. In its most
recent financial year, the Business recorded revenues of
approximately $1.3 billion (GBP1.0 billion) and had underlying
EBITA of approximately $75 million (GBP57 million).
The transaction represents DCC's largest acquisition to date and
is a major step in the continuing expansion of both DCC and DCC
Technology in North America. Since entering the market in 2018, DCC
Technology has expanded significantly, through strong organic
growth and acquisition activity. Together with DCC Technology's
existing platform, the acquisition of Almo will create the leading
specialist Pro AV business in North America. Further details on the
acquisition can be found in DCC's stock exchange announcement of 15
December 2021.
Upcoming events
Investor events
DCC Technology senior management will host a presentation and
webcast for investors and analysts on 15 February 2022 at 2pm GMT.
Registration and access details are available on the DCC website at
www.dcc.ie . DCC will also host an investor event focused on the
energy sector in the second quarter of 2022.
Year end results
DCC expects to announce its results for the year ending 31 March
2022 on 17 May 2022.
Investor enquiries:
Kevin Lucey, Chief Financial Officer Tel: +353 1 2799 400
Rossa White, Head of Group Investor Relations Email:
investorrelations@dcc.ie
Web: www.dcc.ie
Media enquiries:
Powerscourt (Eavan Gannon/Genevieve Ryan) Tel: +44 20 7250
1446
Email: DCC@powerscourt--group.com
About DCC plc
DCC is a leading international sales, marketing and support
services group with a clear focus on sustainable growth. DCC is an
ambitious and entrepreneurial business operating in 21 countries,
supplying products and services used by millions of people every
day. Building strong routes to market, driving for results,
focusing on cash conversion and generating superior sustainable
returns on capital employed enable the Group to reinvest in its
business, creating value for its stakeholders.
Headquartered in Dublin, the Group operates across three
sectors: energy, healthcare and technology, employing approximately
15,000 people. DCC plc is listed on the London Stock Exchange and
is a constituent of the FTSE 100. In its financial year ended 31
March 2021, DCC generated revenue of GBP13.4 billion and operating
profit of GBP530.2 million.
DCC has an excellent record, delivering compound annual growth
of 14% in operating profit and generating an average return on
capital employed of approximately 19% over 27 years as a public
company.
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.
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