TIDMDCC
RNS Number : 2995T
DCC PLC
14 November 2023
14 November 2023
Interim results for the six months ended 30 September 2023
Strong Growth in Operating Profit, Excellent Acquisition
Activity
-- Group adjusted operating profit up 12.0% (12.2% on a constant
currency basis) in the seasonally less significant first half of
the year.
-- Within the constant currency growth of 12.2%, organic growth
was 4.4% driven by an excellent performance from DCC Energy and
partially offset, as anticipated, by a decline in both DCC
Healthcare and DCC Technology. M&A contributed 7.8% of the
constant currency growth.
-- Interim dividend increased by 5.0% to 63.04 pence per
share.
-- Since our prior year Final Results in May 2023, DCC has
committed approximately GBP310 million to new acquisitions in DCC
Energy, including:
- As announced separately today, the synergistic acquisition of
Progas for c.GBP140 million, a nationwide distributor of LPG in
Germany, Europe's largest energy market; and
- The acquisition of five energy management and services
businesses to further expand our offering in this high growth
sector.
-- DCC continues to expect that the year ending 31 March 2024
will be another year of operating profit growth in line with
expectations, and continued development activity.
Donal Murphy, Chief Executive, commented:
"We delivered strong profit growth in the first half of our
financial year. Although the macro environment remains volatile,
DCC continued to perform thanks to our resilient and diverse
business. DCC Energy traded strongly while continuing to execute
the Cleaner Energy in Your Power strategy we outlined earlier this
year. During the period we committed to seven acquisitions aligned
to our strategic priorities to give all our customers the power to
choose a cleaner energy future."
Financial Highlights 2023 2022 % change % change CC(1)
---------------------- ----------- ----------- -------- --------------
Revenue GBP 9.616bn GBP10.837bn -11.3% -11.1%
---------------------- ----------- ----------- -------- --------------
Adjusted operating
profit (2) GBP247.6m GBP221.2m +12.0% +12.2%
---------------------- ----------- ----------- -------- --------------
DCC Energy GBP170.6m GBP132.5m +28.9% +28.9%
---------------------- ----------- ----------- -------- --------------
DCC Healthcare GBP38.3m GBP43.2m -11.3% -12.0%
---------------------- ----------- ----------- -------- --------------
DCC Technology GBP38.7m GBP45.5m -15.0% -13.4%
---------------------- ----------- ----------- -------- --------------
Adjusted earnings
per share(2) 149.3p 146.4p +1.9% +2.3%
---------------------- ----------- ----------- -------- --------------
Interim dividend 63.04p 60.04p +5.0%
---------------------- ----------- ----------- -------- --------------
Net debt (excl. lease GBP1,039.1m GBP782.3m
creditors)(3)
---------------------- ----------- ----------- -------- --------------
(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 2023 was
GBP1,386.5 million (30 September 2022: GBP1,118.3 million)
Contact information
Investor enquiries:
Kevin Lucey, Chief Financial Officer Tel: +353 1 2799 400
Rossa White, Head of Group Investor Email: investorrelations@dcc.ie
Relations
Media enquiries:
Powerscourt (Eavan Gannon/Pete Tel: +44 20 7250 1446
Lambie)
Email: DCC@powerscourt-group.com
Presentation of results - audio webcast and conference call
details
Group management will host a live audio webcast and conference
call of the presentation at 09.00 GMT today. The slides for this
presentation can be downloaded from DCC's website, www.dcc.ie
The access details are as follows:
Ireland: +353 (0) 1 691 7842
UK: +44 (0) 203 936 2999
International: +44 (0) 203 936 2999
Passcode: 771225
Webcast link: https://www.investis-live.com/dcc/6538f26037a2c50c00313f29/bwrtt
This report, presentation slides and a replay of the audio will
be made available at www.dcc.ie
About DCC plc
DCC is a leading international sales, marketing and support
services group. We provide solutions the world needs across three
transformative sectors: energy, healthcare and technology; where we
acquire, improve and grow diverse businesses. We bring our growth
mindset to our businesses in 22 countries across four continents,
empowering our 16,000 employees to create long term value - for our
shareholders, customers, society and the planet.
Headquartered in Dublin, DCC plc is listed on the London Stock
Exchange and is a constituent of the FTSE 100. In our financial
year ended 31 March 2023, DCC generated revenues of GBP22.2 billion
and adjusted operating profit of GBP655.7 million. DCC has an
excellent record, delivering compound annual growth of 14% in
adjusted operating profit and generating an average return on
capital employed of approximately 19% over 29 years as a public
company.
Follow us on LinkedIn
www.dcc.ie
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.
Group & divisional performance Review
A summary of the Group's results for the six months ended 30
September 2023 is as follows:
2023 2022 % change
GBP'm GBP'm
-------------------------------------------------------------------------- --------- --------- ---------
Revenue 9,616 10,837 -11.3%
-------------------------------------------------------------------------- --------- --------- ---------
Adjusted operating profit1
DCC Energy 170.6 132.5 +28.9%
DCC Healthcare 38.3 43.2 -11.3%
DCC Technology 38.7 45.5 -15.0%
-------------------------------------------------------------------------- --------- --------- ---------
Group adjusted operating profit (1) 247.6 221.2 +12.0%
Finance costs (net) and other (52.2) (31.9)
-------------------------------------------------------------------------- --------- --------- ---------
Profit before net exceptionals, amortisation of intangible assets and tax 195.4 189.3 +3.2%
Net exceptional charge before tax and non-controlling interests (12.2) (6.6)
Amortisation of intangible assets (53.5) (50.4)
-------------------------------------------------------------------------- --------- --------- ---------
Profit before tax 129.7 132.3
Taxation (28.3) (27.1)
-------------------------------------------------------------------------- --------- --------- ---------
Profit after tax 101.4 105.2
Non-controlling interests (8.4) (7.7)
-------------------------------------------------------------------------- --------- --------- ---------
Attributable profit 93.0 97.5
-------------------------------------------------------------------------- --------- --------- ---------
Adjusted earnings per share(1) 149.3p 146.4p +1.9%
-------------------------------------------------------------------------- --------- --------- ---------
Dividend per share 63.04p 60.04p +5.0%
-------------------------------------------------------------------------- --------- --------- ---------
Free cash flow(2) 54.5 37.6
-------------------------------------------------------------------------- --------- --------- ---------
Net debt at 30 September (excluding lease creditors) (1,039.1) (782.3)
-------------------------------------------------------------------------- --------- --------- ---------
Lease creditors (347.4) (336.0)
-------------------------------------------------------------------------- --------- --------- ---------
Net debt at 30 September (including lease creditors) (1,386.5) (1,118.3)
-------------------------------------------------------------------------- --------- --------- ---------
(1) Excluding net exceptionals and amortisation of intangible
assets
(2) After net working capital and net capital expenditure and
before net exceptionals, interest and tax payments
Income Statement Review
Group revenue
Overall, Group revenue decreased by 11.3% (11.1% on a constant
currency basis) to GBP9.6 billion, primarily due to lower revenue
in DCC Energy where average commodity prices were lower than during
the first six months of the prior year.
DCC Energy sold 7.2 billion litres of product in the first half,
in line with the prior year. There was modest volume growth across
Energy Solutions, driven by the Nordics business which recorded
strong growth with aviation, commercial and industrial customers.
This was offset by a modest decline in Energy Mobility, where
volumes in France were disrupted by strike activity in the first
quarter and competitor activity more recently. Revenue in DCC
Energy declined by 12.8% to GBP6.9 billion, reflecting lower
commodity prices. DCC Healthcare recorded revenue of GBP420.5m, an
increase of 11.3% (10.9% on a constant currency basis) driven by
the acquisition of Medi--Globe during the second half of the prior
year. Organically, revenue declined by 0.9% as growth in DCC Vital
was offset by reduced demand in DCC Health & Beauty Solutions.
Revenue in DCC Technology was GBP2.3 billion, a decrease of 9.7%
(9.1% on a constant currency basis), driven by weaker demand for
consumer technology products in our Life Tech and Info Tech
segments.
Group adjusted operating profit
Group adjusted operating profit increased by 12.0% to GBP247.6
million (12.2% on a constant currency basis), in the seasonally
less significant first half of the year. Strong organic growth in
DCC Energy was somewhat offset, as anticipated, by the more
difficult trading environment across DCC Healthcare and DCC
Technology.
The impact on reported Group adjusted operating profit of
foreign exchange (FX) translation, M&A and organic growth was
as follows:
Period FX translation M&A Organic Reported growth
-------- -------------- ------ ------- ---------------
H1 FY24 -0.2% +7.8% +4.4% 12.0%
-------- -------------- ------ ------- ---------------
H1 FY23 +2.3% +12.6% -1.9% 13.0%
-------- -------------- ------ ------- ---------------
The net impact of FX translation in the first half of the year
was a modest headwind of 0.2%, or GBP0.5 million, in the reported
growth in adjusted operating profit. This reflects average sterling
exchange rates strengthening against most of the Group's reporting
currencies during the period, offset by a modest weakening against
Euro.
Acquisitions completed in the prior year and in the current
period contributed 7.8% of the reported operating profit growth.
The material contribution during the six-month period came from the
prior year acquisitions of Medi-Globe and PVO.
The Group's organic operating profit growth was 4.4%, driven by
the strong performance of DCC Energy. As expected, DCC Healthcare
and DCC Technology experienced more difficult market conditions and
declined organically. The inflationary environment continued to be
a significant feature during the period. The organic profit growth
was achieved despite a 5.3% (or c.GBP50 million) increase in the
Group's like for like overhead cost base. Further commentary on the
trading performance of each of the three divisions is detailed
below.
Divisional Performance Reviews
2023 2022 % change % change
DCC Energy CC
----------------------------------- ---------- ---------- -------- --------
Volumes (billion litre equivalent)
(1) 7.184bn 7.197bn -0.2%
----------------------------------- ---------- ---------- -------- --------
Gross profit GBP764.4m GBP667.1m +14.6% +14.6%
----------------------------------- ---------- ---------- -------- --------
Operating profit GBP170.6m GBP132.5m +28.9% +28.9%
----------------------------------- ---------- ---------- -------- --------
Operating profit per litre 2.38ppl 1.84ppl
----------------------------------- ---------- ----------
-- DCC Energy delivered an excellent performance in the
seasonally less significant first half of the financial year.
Operating profit increased by 28.9% (28.9% constant currency). Both
Energy Solutions (up 33.3%) and Energy Mobility (up 22.5%)
delivered very strong growth. Organic growth was 21.1%, with
M&A contributing 7.8%.
-- We continue to execute the strategy outlined at our Energy
'Insights Day' on 6 September 2023. In the first half, we increased
the share of operating profits from services, renewables and other
products ('SRO') to 46%, up from 39% in the same period a year ago
(SRO revenues are not seasonal so this percentage will be lower for
the full year (2) ). DCC Energy's Scope 3 emissions were unchanged
versus the prior period as aviation volumes recovered. The carbon
intensity of our profits declined by 22% versus prior year.
-- DCC Energy committed GBP310.5 million to acquisitions in the
first half. Five of the seven acquisitions were in energy
management services. We have now built strong capability in energy
management services in France, the UK, Ireland, Norway and the
Netherlands. We also made two LPG acquisitions. The larger of the
two, Progas, significantly increases our scale in Germany, Europe's
largest energy market.
(1) Billion litres equivalent provides a standard metric for the
different products and solutions that DCC Energy sells. Metric
tonnes and kilowatts of power are converted to litres. A lot of the
services and renewables do not have associated volumes such as
solar installations, heat pump solutions, fleet services and energy
efficiency services. Overall, c.30% of DCC Energy's operating
profit has no direct volume (litres equivalent) attached to it.
(2) Services, renewables and other ('SRO') products are not
seasonally weighted whereas our traditional and lower carbon
activities are second half weighted, so the share of DCC Energy
operating profit from SRO is larger in the first half of the
financial year.
2023 2022 % change % change
DCC Energy Solutions CC
----------------------------------- ---------- --------- -------- --------
Volumes (billion litre equivalent) 4.829bn 4.816bn +0.3%
----------------------------------- ---------- --------- -------- --------
Operating profit GBP104.1m GBP78.1m +33.3% +32.1%
----------------------------------- ---------- --------- -------- --------
Operating profit per litre 2.16ppl 1.62ppl
----------------------------------- ---------- ---------
DCC Energy Solutions grew its operating profit by 33.3% (32.1%
constant currency). This reflected very strong organic growth in
energy management services (and SRO products), the contribution
from acquisitions, good procurement and cost management. Volumes of
traditional fuels and lower carbon LPG were very modestly ahead of
the prior year. We sold 48 million litres of HVO biofuel, up from
27 million litres in the same period last year.
There are four operating regions within DCC Energy Solutions:
Continental Europe, UK & Ireland, the Nordics and North
America. DCC Energy's excellent organic performance was driven
primarily by Continental Europe and the Nordics.
In Continental Europe, volumes were in line with the prior year
although the experience was mixed across different geographies and
customer groups. We grew volumes to commercial and industrial
customers, and had notable customer wins, but experienced softer
end-markets in the domestic sector. Following a difficult first
half in the prior year, our on-grid gas and power business
recovered strongly. We also expanded our energy management business
organically and through acquisitions.
In the UK & Ireland, volume and operating profit was in line
with the prior year. The economic environment in the UK was less
favourable, however our LPG business performed well and continued
to grow its market share. The fuels market was more difficult, and
we saw increased competition through the summer months. We
continued to grow our energy management business, highlighted by
the acquisition of Centreco, the market-leading commercial and
industrial solar business in the UK and Alternative Energy Ireland
(AEI), the second-largest player in Ireland.
In the Nordics, we grew very strongly driven by demand from
commercial and industrial customers for LPG. We continued to
develop the market for sustainable aviation fuel in Denmark and we
delivered strong growth in aviation generally. We also expanded our
services and renewables solutions by acquiring Solcellekraft, one
of Norway's largest Solar PV businesses.
In North America our business primarily serves domestic and
small commercial heating customers, so it is particularly seasonal.
Trading in the region was in line with the prior year. We have made
good progress in building out our regional centre in Chicago and
are investing in technology and digital capability which will
enable the further scaling of the business. During the period we
acquired San Isabel Services Propane in Colorado. We believe there
will be further opportunities to consolidate within the fragmented
US LPG market in the years to come.
2023 2022 % change % change
DCC Energy Mobility CC
----------------------------------- --------- --------- -------- --------
Volumes (billion litre equivalent) 2.354bn 2.381bn -1.1%
----------------------------------- --------- --------- -------- --------
Operating profit GBP66.5m GBP54.4m +22.5% +24.4%
----------------------------------- --------- --------- -------- --------
Operating profit per litre 2.83ppl 2.28ppl
----------------------------------- --------- ---------
DCC Energy Mobility grew its operating profit by 22.5% (24.4%
constant currency). All of the growth was organic. Our UK and
Nordics businesses performed ahead of expectations, whereas France
was modestly behind expectations. Renewable/bio volumes were up 8%
compared to the same period in the prior year. We have continued to
invest in EV charging across the network. We have added EV
capability to 122 sites in total, almost doubling the number of
sites from 64 a year ago. We will look to deploy EV charging on
300-400 of our retail sites by 2030.
Our UK business grew strongly and ahead of expectations, helped
by a good performance from our convenience operations. We also grew
our fuel card and HGV services operating profit very strongly. We
continue to expand our range of digital solutions in this area; it
is an important growth area in our strategy we communicated in
September 2023.
Operating profit grew modestly in France and Luxembourg in what
was a challenging market environment. The market saw widespread
disruption due to strike action early in the first half of the year
and in more recent weeks the market has been very competitive. Our
Nordic businesses performed strongly; each business in the region
(Denmark, Sweden and Norway) traded ahead of expectations.
2023 2022 % change % change
DCC Healthcare CC
----------------- --------- --------- -------- --------
Revenue GBP420.5m GBP377.7m +11.3% +10.9%
----------------- --------- --------- -------- --------
Gross profit GBP130.8m GBP113.6m +15.2% +14.7%
----------------- --------- --------- -------- --------
Operating profit GBP38.3m GBP43.2m -11.3% -12.0%
----------------- --------- --------- -------- --------
Operating margin 9.1% 11.4%
----------------- --------- ---------
-- Operating profit declined by 11.3% (12.0% constant currency)
and by 28.3% organically, due to the challenging market conditions
experienced by DCC Health & Beauty Solutions.
-- DCC Vital performed well and delivered strong profit growth,
driven by the prior year acquisition of Medi-Globe and a good
trading performance. Operating profit in DCC Health & Beauty
Solutions declined, impacted by weak market conditions principally
as a result of the sustained period of market destocking which
began in the second quarter of the prior year and which endured
longer than expected. In recent months, we have seen an uptick in
order intake levels across most of our businesses. In addition, the
latest market data indicates improving consumer demand trends.
-- The long-term growth opportunity in the nutritional products
market remains attractive for DCC Health & Beauty Solutions. We
continued to invest during the period to enhance the capability of
the business, including completing a new state-of-the-art gummy
production facility in Florida, which positions the business to
capitalise on higher margin complex formulation products.
Divisional revenue
DCC Healthcare recorded revenue of GBP420.5 million, an increase
of 11.3%. Organically, revenue declined by 0.9% as growth in DCC
Vital was offset by reduced demand in DCC Health & Beauty
Solutions.
DCC Vital
DCC Vital delivered strong growth in the first half of the
financial year driven by the benefit of the acquisition of
Medi-Globe which performed strongly during the period along with a
strong trading performance in the Irish market.
In Medical Devices, the business delivered good organic growth
and benefited from the first-time contribution of Medi-Globe. The
integration of Medi-Globe is progressing well, including
cross-selling Medi-Globe products into our existing DCC Vital sales
platform. In the UK, the business generated good revenue growth
despite the challenging market environment which was impacted by
NHS budgetary constraints and industrial action by healthcare
practitioners.
In Primary Care, we generated growth in the DACH region, but
conditions were more difficult in the UK for our market leading
business due to NHS funding constraints. We continued to invest
during the period in our technology platform to enhance e-commerce
and digital capability which will drive further growth and
efficiency for the business in the coming years.
DCC Health & Beauty Solutions
Consistent with the second half of the prior year, DCC Health
& Beauty Solutions continued to operate in a challenging market
context and our operating profit declined materially. The revenue
decline and relatively higher fixed cost base resulted in negative
operating leverage. The destocking, which began in the second
quarter of the prior year, endured much longer than DCC or other
market participants and experts expected. During the first half of
the year, end-consumers, retailers and customers in both Europe and
the US continued to work through their elevated stock positions.
The business has not seen any material customer attrition. During
the first half, we experienced increased engagement with customers
on new product development. As the second quarter progressed, we
saw an uptick in orders across most of our businesses which has
continued into the early weeks of the second half of the year. In
addition, the latest market data indicates improving consumer
demand trends.
Given the difficult market context, DCC Health & Beauty
Solutions has been particularly focused on operational efficiency.
During the first half, we combined two of our US businesses and
consolidated their manufacturing activities into one site in
Florida, generating scale and efficiency benefits. We also invested
to enhance our product offering, recently completing a new
state-of-the-art gummy facility in Florida which enhances our
capability in this attractive product format.
2023 2022 % change % change
DCC Technology CC
----------------- ---------- ---------- -------- --------
Revenue GBP2.294bn GBP2.541bn -9.7% -9.1%
----------------- ---------- ---------- -------- --------
Gross profit GBP288.6m GBP296.9m -2.8% -2.0%
----------------- ---------- ---------- -------- --------
Operating profit GBP38.7m GBP45.5m -15.0% -13.4%
----------------- ---------- ---------- -------- --------
Operating margin 1.7% 1.8%
----------------- ---------- ----------
-- Operating profit declined by 15.0% (13.4% organic constant
currency) in the first half of the year. As expected, there was
lower market demand for consumer technology products. This
continued the trend seen in the second half of the prior year,
although our business maintained market share during the
period.
-- Pro Tech demand was robust, and we saw good growth in Pro
Audio products in particular. Divisionally, the areas of weakness
were the consumer-focused Info Tech in Europe and Life Tech in the
US, where declining consumer spending impacted demand. North
America, where we have businesses in Pro Tech and Life Tech,
accounted for most of the operating profit of DCC Technology in the
first half.
-- Given significant cost inflation, we implemented a range of
cost reduction measures which maintained overhead costs in line
with the prior year. The strong focus on operational improvement in
our Info Tech business in the UK continued and delivered improved
profitability in the first half.
Divisional revenue
Divisional revenue declined by 9.7%, driven by weaker demand for
consumer technology products in our Life Tech and Info Tech
segments. Revenue was 9.1% lower organically.
Pro Tech
In Pro Tech, DCC Technology is the leading specialist
distributor of AV products globally, with a particularly strong
presence in North America. The Pro Tech segment delivered a good
performance in the first half, driven by strong growth in Pro Audio
in North America. The strong performance in this higher margin
specialist category was beneficial to the division's margin mix.
Demand for AV products was robust. After a strong performance in
the prior year, we maintained our market share in North America. In
Europe, we experienced mixed levels of demand across the region.
There was reasonable demand for AV and related products, but weaker
demand for enterprise level products.
Info Tech
Our Info Tech business distributes high-volume consumer and
business IT products to the retail and reseller channels in Europe,
with a particularly strong presence in the UK, Ireland and the
Nordics. Despite the weak market and related revenue decline, our
business in the UK continued to recover strongly in the first half
of the year. Operational improvements contributed to a better gross
margin and cost performance. We are continuing to focus on these
improvements, including the consolidation of a secondary warehouse
facility into one national location in the north of England. The
business in Ireland continued to perform well and in line with
expectations in the first half of the year.
Across the rest of our European Info Tech markets, which have a
largely consumer focus, our Nordic business performed robustly. We
experienced weaker demand in France and the Benelux where operating
profit declined.
Life Tech
In Life Tech we distribute consumer appliances and lifestyle
technology products to the retail and etail channels in North
America. During the first half of the year, performance in Life
Tech declined as a result of weaker demand for consumer
electronics, music products, appliances and increased discounting
in certain overstocked segments. We increased our investment in
digital marketing and this resulted in improved product visibility
and market share on key etail platforms.
Finance costs (net) and other
Net finance costs and other, which includes the Group's net
financing costs, lease interest and the share of profit/loss of
associated businesses, increased to GBP52.2 million (2022: GBP31.9
million). As in the second half of the prior year, the increase in
the period primarily reflects increased net financing costs due to
the much higher interest rate environment.
The substantial change in the global interest rate environment
from summer 2022 onwards impacted the cost of the floating rate
element of the Group's gross debt. The net impact of the rising
interest rate environment amounted to approximately GBP17 million.
Presently, approximately 40% of the Group's gross debt is at
floating rates.
Average net debt, excluding lease creditors, in the period was
GBP1.2 billion, compared to an average net debt of GBP883 million
in the prior year. The increase in average net debt excluding lease
creditors reflects the substantial acquisition activity during the
current period and the second half of the prior year.
Net exceptional items and amortisation of intangible assets
The Group recorded a net exceptional charge after tax of GBP12.2
million in the first six months of the year as follows:
GBP'm
---------------------------------------------- ------
Restructuring and integration costs and other (8.4)
Acquisition and related costs (3.8)
IAS 39 mark-to-market gain -
---------------------------------------------- ------
(12.2)
Tax attaching to exceptional items -
---------------------------------------------- ------
Net exceptional charge (12.2)
---------------------------------------------- ------
Restructuring and integration costs and other of GBP8.4 million
relates to the restructuring of operations across a number of
businesses and recent acquisitions. Most of the cost relates to
optimisation and integration of operations in the Technology
division. Acquisition and related costs include the professional
fees and tax costs relating to the evaluation and completion of
acquisition opportunities and amounted to GBP3.8 million.
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 2023 this was not material and at the
reporting date the cumulative net exceptional credit taken in
respect of IAS 39 ineffectiveness was GBP1.4 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 GBP53.5 million from GBP50.4 million
in the prior period, with the increase reflecting acquisitions
completed in the prior year.
Taxation
The effective tax rate for the Group in the first half of the
year of 20.3% is based on the anticipated mix of profits for the
full year. It compares to a full year effective tax rate in the
prior year of 19.3%. The higher tax rate reflects corporation tax
increases in a number of jurisdictions and the increasingly
international footprint of the Group.
Adjusted earnings per share
Adjusted earnings per share increased by 1.9% to 149.3 pence,
reflecting the increase in profit before exceptional items and
goodwill amortisation.
Dividend
The Board has decided to pay an interim dividend of 63.04 pence
per share, which represents a 5.0% increase on the prior year
interim dividend of 60.04 pence per share. This dividend will be
paid on 15 December 2023 to shareholders on the register at the
close of business on 24 November 2023.
Cash Flow, capital DEPLOYMENT & Financial strength
Cash flow
As with its operating profit, the Group's operating cash flow is
significantly weighted towards the second half of the financial
year. The cash flow of the Group for the six months ended 30
September 2023 can be summarised as follows:
2023 2022
Six months ended 30 September GBP'm GBP'm
--------------------------------------------------- --------- ---------
Group operating profit 247.6 221.2
Increase in working capital (154.1) (151.3)
Depreciation (excluding ROU leased assets)
and other 76.9 76.0
--------------------------------------------------- --------- ---------
Operating cash flow (pre add-back for depreciation
on ROU leased assets) 170.4 145.9
Capital expenditure (net) (111.4) (103.9)
--------------------------------------------------- --------- ---------
59.0 42.0
Depreciation on ROU leased assets 39.9 35.6
Repayment of lease creditors (44.4) (40.0)
--------------------------------------------------- --------- ---------
Free cash flow 54.5 37.6
Interest and tax paid, net of dividend from
equity accounted investments (88.6) (59.5)
--------------------------------------------------- --------- ---------
Free cash flow (after interest and tax) (34.1) (21.9)
Acquisitions (151.8) (41.7)
Dividends (126.9) (117.2)
Exceptional items (7.8) (2.5)
Share issues 0.2 0.3
--------------------------------------------------- --------- ---------
Net outflow (320.4) (183.0)
Opening net debt (including lease creditors) (1,113.9) (756.6)
Translation and other 47.8 (178.7)
--------------------------------------------------- --------- ---------
Closing net debt (including lease creditors) (1,386.5) (1,118.3)
--------------------------------------------------- --------- ---------
Analysis of closing net debt (including lease
creditors):
Net debt at 30 September (excluding lease
creditors) (1,039.1) (782.3)
Lease creditors at 30 September (347.4) (336.0)
--------------------------------------------------- --------- ---------
(1,386.5) (1,118.3)
--------------------------------------------------- --------- ---------
Free cash flow generation
Free cash flow in the six months ended 30 September 2023 of
GBP54.5 million compares to GBP37.6 million in the prior year. On a
rolling 12-month basis (i.e., H1 FY24 and H2 FY23 cumulatively),
free cash flow conversion remained strong at 86%.
Working capital
As expected, working capital increased by GBP154.1 million in
the first half of the financial year, reflecting the typical
seasonal outflow across the Group. The net investment through the
period in working capital reflects the scale of the Group's
activities and seasonal working capital requirements, particularly
in DCC Technology and within DCC Energy Solutions. The absolute
value of working capital at 30 September 2023 was in line with the
prior year at GBP440.2 million (GBP448.8 million at 30 September
2022), a good performance given the lower utilisation of supply
chain financing within DCC Technology (see below). Overall working
capital days at 30 September 2023 was 7.4 days sales (2022: 6.8
days sales) reflecting recently completed acquisitions.
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. The level of supply chain financing at 30 September
2023 reduced materially compared with the prior year to GBP122.8
million (2022: GBP159.3 million). Supply chain financing had a
positive impact on Group working capital days of 2.1 days (30
September 2022: 2.4 days).
Net capital expenditure
Net capital expenditure for the six months of GBP111.4 million
(2022: 103.9 million) was net of disposal proceeds (GBP3.4 million)
and government grants received (GBP2.7 million) and reflects
continued investment in development initiatives across the
Group.
2023 2022
GBP'm GBP'm
--------------- ------ ------
DCC Energy 89.7 87.1
DCC Healthcare 17.7 12.3
DCC Technology 4.0 4.5
----------------- ------ ------
Total 111.4 103.9
----------------- ------ ------
Capital expenditure in DCC Energy primarily comprised
expenditure on tanks, cylinders and installations, with a focus on
supporting new and existing LPG customers in Energy Solutions. In
Mobility, there was investment to maintain our retail sites and
upgrades across the business, including adding further lower
emission product capability, EV fast charging and related forecourt
services in the Nordics and France in particular. In DCC
Healthcare, the spending primarily related to increased
manufacturing capability and capacity across DCC Health &
Beauty Solutions. The business recently commissioned its gummy line
in Florida and is in the process of expanding effervescent capacity
at its Minnesota operations. Net capital expenditure for the Group
exceeded the depreciation charge of GBP76.4 million (excluding
right-of-use leased assets) in the period by GBP35.0 million.
Total cash spend on acquisitions in the six months to 30
September 2023
The total cash spend on acquisitions in the six months ended 30
September 2023 was GBP151.8 million. This included the completion
of the acquisition of AEI, Hafod Renewables and O'sitoit in DCC
Energy which were announced in the prior year Results Announcement
in May 2023. Payment of deferred and contingent acquisition
consideration previously provided amounted to GBP30.5 million.
Committed acquisitions
Committed acquisitions in the period amounted to GBP310.5
million as follows:
2023 2022
GBP'm GBP'm
--------------- ------ ------
DCC Energy 310.5 90.6
DCC Healthcare - 213.0
Total 310.5 303.6
----------------- ------ ------
DCC continues to be very active from a development perspective.
The Group's recent acquisitions include:
DCC Energy
DCC Energy has committed approximately GBP310 million to seven
new acquisitions which support its strategy to build a leading
energy management business and further expand its offering in the
distribution of lower-carbon LPG products. The largest of these
transactions was the agreement to acquire Progas, which is set out
in further detail below. In addition, the division completed the
following acquisitions:
-- In July 2023, DCC Energy acquired Centreco, a market-leading
Solar PV and energy consultancy business in the UK, which services
commercial and industrial customers nationally, and SLER40, a
French Solar PV and heat pump business servicing domestic and
commercial customers with design, installation, and maintenance
services.
-- In August 2023, DCC Energy acquired Isolatiespecialist, a
leading provider of energy efficiency and insulation services to
domestic and commercial customers in the Netherlands, and San
Isabel Services Propane, a US LPG distributor which services both
domestic and commercial customers in Colorado.
-- DCC Energy acquired Solcellekraft in September 2023, one of
Norway's largest Solar PV businesses, servicing commercial and
domestic customers.
-- In November 2023, DCC Energy acquired DTGen, a leading
UK-based provider of power solutions, with a particular focus on
emergency power solutions. DTGen offers a comprehensive service
from design to supply, installation, and continuous maintenance,
catering to a diverse range of sectors, including data centres,
utilities, and healthcare.
Progas
In September 2023, DCC Energy agreed to acquire Progas GmbH
("Progas"), a leading distributor of LPG in Germany, for an
enterprise value of approximately GBP140 million, subject to
customary regulatory approval. The synergistic acquisition will
represent DCC Energy's largest acquisition to date in Germany,
Europe's largest energy market, and considerably expands DCC
Energy's customer base in the market to over 100,000 customers. The
acquisition is expected to generate a mid-teen return on capital
employed in the first year of ownership. The transaction is
expected to complete by the end of the financial year. A separate
stock exchange announcement was issued on the acquisition this
morning.
Financial strength
DCC has always maintained a strong balance sheet which enables
the implementation of the Group's strategy. A strong balance sheet
provides many strategic and commercial benefits, enabling DCC to
take advantage of acquisitive or organic development opportunities
as they arise. At 30 September 2023, the Group had net debt
(including lease creditors) of GBP1.4 billion, net debt (excluding
lease creditors) of GBP1.0 billion, cash resources (net of
overdrafts) of GBP842 million and undrawn committed facilities of
over GBP765 million.
Substantially all of the Group's term debt has been raised in
the US private placement market and has an average maturity of 5.1
years. In April 2023, DCC repaid GBP223.3 million of maturing US
private placement notes from cash resources.
DCC has taken a pro-active approach to the credit markets since
going public. The Group has been active in the US private placement
debt market since 1996 and has built up a robust and
well-diversified funding portfolio, with a balanced maturity
profile. DCC's long term banking partners, investors and suppliers
have always appreciated the strong credit quality of the Company.
In November 2023 S&P Global Ratings issued a BBB rating and
Fitch issued a BBB rating for DCC in the first public credit rating
opinions of the Company. These investment grade ratings combined
with our strong balance sheet, resilient business model, cashflow
and a strong track record in the private debt markets, gives access
to an increased array of funding instruments to enable the
continued growth and development of the Group.
Principal risks and uncertainties
The Board of DCC is responsible for the Group's risk management
and internal control systems, which are designed to identify,
manage and mitigate 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 80 to 83 of the 2023
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 in place in relation to identified risks are
designed to provide a reasonable and proportionate, and not an
absolute, level of protection against the impact of the events in
question.
Group Income Statement
For the six months ended 30 September 2023
Unaudited 6 months ended Unaudited 6 months ended Audited year ended
30 September 2023 30 September 2022 31 March 2023
Pre Exceptionals Pre Exceptionals Pre Exceptionals
exceptionals (note Total exceptionals (note 6) Total exceptionals (note 6) Total
6)
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------- ------ ------------- ------------- ------------ ------------- ------------- ------------ ------------- ------------- -------------
Revenue 5 9,615,978 - 9,615,978 10,837,130 - 10,837,130 22,204,846 - 22,204,846
Cost of sales (8,432,158) - (8,432,158) (9,759,622) - (9,759,622) (19,800,114) - (19,800,114)
------------------- ------ ------------- ------------- ------------ ------------- ------------- ------------ ------------- ------------- -------------
Gross profit 1,183,820 - 1,183,820 1,077,508 - 1,077,508 2,404,732 - 2,404,732
Administration
expenses (364,396) - (364,396) (341,072) - (341,072) (629,510) - (629,510)
Selling and distribution
expenses (583,143) - (583,143) (523,803) - (523,803) (1,157,642) - (1,157,642)
Other operating
income/(expenses) 11,361 (12,201) (840) 8,540 (9,045) (505) 38,082 (32,528) 5,554
------------------- ------ ------------- ------------- ------------ ------------- ------------- ------------ ------------- ------------- -------------
Adjusted operating profit 247,642 (12,201) 235,441 221,173 (9,045) 212,128 655,662 (32,528) 623,134
Amortisation of intangible
assets (53,512) - (53,512) (50,405) - (50,405) (111,146) - (111,146)
--------------------------- ------------- ------------- ------------ ------------- ------------- ------------ ------------- ------------- -------------
Operating profit 5 194,130 (12,201) 181,929 170,768 (9,045) 161,723 544,516 (32,528) 511,988
Finance costs (60,270) - (60,270) (41,469) - (41,469) (96,735) - (96,735)
Finance income 7,923 12 7,935 10,185 2,504 12,689 16,111 892 17,003
Equity accounted
investments'
profit/loss after tax 137 - 137 (606) - (606) (692) - (692)
--------------------------- ------------- ------------- ------------ ------------- ------------- ------------ ------------- ------------- -------------
Profit before tax 141,920 (12,189) 129,731 138,878 (6,541) 132,337 463,200 (31,636) 431,564
Income tax expense 7 (28,325) (15) (28,340) (26,630) (498) (27,128) (87,526) 2,764 (84,762)
------------------- ------ ------------- ------------- ------------ ------------- ------------- ------------ ------------- ------------- -------------
Profit after tax for
the financial period 113,595 (12,204) 101,391 112,248 (7,039) 105,209 375,674 (28,872) 346,802
--------------------------- ------------- ------------- ------------ ------------- ------------- ------------ ------------- ------------- -------------
Profit
attributable
to:
Owners of the Parent
Company 105,233 (12,204) 93,029 104,474 (6,948) 97,526 362,683 (28,661) 334,022
Non-controlling
interests 8,362 - 8,362 7,774 (91) 7,683 12,991 (211) 12,780
------------------- ------ ------------- ------------- ------------ ------------- ------------- ------------ ------------- ------------- -------------
113,595 (12,204) 101,391 112,248 (7,039) 105,209 375,674 (28,872) 346,802
------------------- ------ ------------- ------------- ------------ ------------- ------------- ------------ ------------- ------------- -------------
Earnings per ordinary share
Basic earnings per
share 8 94.20p 98.83p 338.40p
Diluted earnings
per share 8 94.14p 98.77p 338.04p
Adjusted basic
earnings
per share 8 149.27p 146.42p 456.27p
Adjusted diluted
earnings
per share 8 149.19p 146.32p 455.79p
------------------- ------ ------------- ------------- ------------ ------------- ------------- ------------ ------------- ------------- -------------
Group Statement of Comprehensive Income
For the six months ended 30 September 2023
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2023 2022 2023
GBP'000 GBP'000 GBP'000
--------------------------------------------- ---- ---------- ---------- ----------
Group profit for the period 101,391 105,209 346,802
Other comprehensive income:
Items that may be reclassified subsequently
to profit or loss
Currency translation (27,569) 166,078 43,280
Movements relating to cash flow
hedges 59,931 (59,784) (164,422)
Movement in deferred tax liability
on cash flow hedges (11,567) 10,089 30,374
--------------------------------------------------- ---------- ---------- ----------
20,795 116,383 (90,768)
--------------------------------------------------- ---------- ---------- ----------
Items that will not be reclassified
to profit or loss
Group defined benefit pension obligations:
* remeasurements 1,839 3,685 2,811
* movement in deferred tax asset (373) (719) (800)
--------------------------------------------------- ---------- ---------- ----------
1,466 2,966 2,011
--------------------------------------------------- ---------- ---------- ----------
Other comprehensive income for the
period, net of tax 22,261 119,349 (88,757)
--------------------------------------------------- ---------- ---------- ----------
Total comprehensive income for
the period 123,652 224,558 258,045
--------------------------------------------------- ---------- ---------- ----------
Attributable to:
Owners of the Parent Company 116,772 214,010 243,242
Non-controlling interests 6,880 10,548 14,803
--------------------------------------------------- ---------- ---------- ----------
123,652 224,558 258,045
---- ---------- ---------- ----------
Group Balance Sheet
As at 30 September 2023
Unaudited Unaudited Audited
30 Sept. 30 Sept. 31 March
2023 2022 2023
Notes GBP'000 GBP'000 GBP'000
===================================== ===== =========== ========= =========
ASSETS
Non-current assets
Property, plant and equipment 1,369,547 1,333,779 1,354,806
Right-of-use leased assets 333,975 326,306 336,221
Intangible assets and goodwill 3,050,965 2,791,596 2,957,629
Equity accounted investments 45,770 46,864 47,789
Deferred income tax assets 68,836 58,924 69,053
Derivative financial instruments 52,021 143,547 89,199
----------------------------------------- ----- ----------- --------- ---------
4,921,114 4,701,016 4,854,697
---------------------------------------- ----- ----------- --------- ---------
Current assets
Inventories 1,335,355 1,454,627 1,192,803
Trade and other receivables 2,015,679 2,218,757 2,312,269
Derivative financial instruments 71,107 178,101 59,258
Cash and cash equivalents 882,923 1,258,065 1,421,749
----------------------------------------- ----- ----------- --------- ---------
4,305,064 5,109,550 4,986,079
---------------------------------------- ----- ----------- --------- ---------
Total assets 9,226,178 9,810,566 9,840,776
----------------------------------------- ----- ----------- --------- ---------
EQUITY
Capital and reserves attributable to owners
of the Parent Company
Share capital 17,422 17,422 17,422
Share premium 883,873 883,652 883,669
Share based payment reserve 10 58,190 50,960 54,596
Cash flow hedge reserve 10 84 36,073 (48,280)
Foreign currency translation reserve 10 102,442 250,485 128,529
Other reserves 10 932 932 932
Retained earnings 1,909,099 1,766,614 1,941,223
----------------------------------------- ----- ----------- --------- ---------
Equity attributable to owners
of the Parent Company 2,972,042 3,006,138 2,978,091
Non-controlling interests 86,789 75,661 80,219
----------------------------------------- ----- ----------- --------- ---------
Total equity 3,058,831 3,081,799 3,058,310
----------------------------------------- ----- ----------- --------- ---------
LIABILITIES
Non-current liabilities
Borrowings 1,600,671 1,851,052 1,933,759
Lease creditors 274,607 270,188 275,388
Derivative financial instruments 39,305 51,789 40,585
Deferred income tax liabilities 261,312 259,590 263,623
Post employment benefit obligations 12 (13,482) (11,761) (11,721)
Provisions for liabilities 294,957 306,536 301,067
Acquisition related liabilities 110,195 72,680 86,172
Government grants 2,914 352 446
----------------------------------------- ----- ----------- --------- ---------
2,570,479 2,800,426 2,889,319
---------------------------------------- ----- ----------- --------- ---------
Current liabilities
Trade and other payables 2,944,129 3,250,559 3,279,898
Current income tax liabilities 79,849 64,268 85,324
Borrowings 375,804 379,746 320,856
Lease creditors 72,763 65,770 71,158
Derivative financial instruments 29,385 79,426 42,341
Provisions for liabilities 53,770 62,137 52,349
Acquisition related liabilities 41,168 26,435 41,221
----------------------------------------- ----- ----------- --------- ---------
3,596,868 3,928,341 3,893,147
---------------------------------------- ----- ----------- --------- ---------
Total liabilities 6,167,347 6,728,767 6,782,466
----------------------------------------- ----- ----------- --------- ---------
Total equity and liabilities 9,226,178 9,810,566 9,840,776
----------------------------------------- ----- ----------- --------- ---------
Net debt included above (excluding
lease creditors) 11 (1,039,114) (782,300) (767,335)
----------------------------------------- ----- ----------- --------- ---------
Group Statement of Changes in Equity
For the six months ended 30 September 2023
Attributable to owners of the
Parent Company
---------------------------------------------------
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 2023 17,422 883,669 1,941,223 135,777 2,978,091 80,219 3,058,310
Profit for the period - - 93,029 - 93,029 8,362 101,391
Other comprehensive income:
Currency translation - - - (26,087) (26,087) (1,482) (27,569)
Group defined benefit pension
obligations:
- remeasurements - - 1,839 - 1,839 - 1,839
- movement in deferred tax
asset - - (373) - (373) - (373)
Movements relating to cash
flow hedges - - - 59,931 59,931 - 59,931
Movement in deferred tax liability
on cash flow hedges - - - (11,567) (11,567) - (11,567)
----------------------------------- -------
Total comprehensive income - - 94,495 22,277 116,772 6,880 123,652
Re-issue of treasury shares - 204 - - 204 - 204
Share based payment - - - 3,594 3,594 - 3,594
Dividends - - (126,619) - (126,619) (310) (126,929)
----------------------------------- ------- ------- --------- ---------- ---------- ----------- ----------
At 30 September 2023 17,422 883,873 1,909,099 161,648 2,972,042 86,789 3,058,831
----------------------------------- ------- ------- --------- ---------- ---------- ----------- ----------
For the six months ended 30 September 2022
Attributable to owners of the
Parent Company
------------------------------------------------
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 2022 17,422 883,321 1,783,033 221,408 2,905,184 65,379 2,970,563
Profit for the period - - 97,526 - 97,526 7,683 105,209
Other comprehensive income:
Currency translation - - - 163,213 163,213 2,865 166,078
Group defined benefit pension
obligations:
- remeasurements - - 3,685 - 3,685 - 3,685
- movement in deferred tax
asset - - (719) - (719) - (719)
Movements relating to cash
flow hedges - - - (59,784) (59,784) - (59,784)
Movement in deferred tax liability
on cash flow hedges - - - 10,089 10,089 - 10,089
----------------------------------- -------
Total comprehensive income - - 100,492 113,518 214,010 10,548 224,558
Re-issue of treasury shares - 331 - - 331 - 331
Share based payment - - - 3,524 3,524 - 3,524
Dividends - - (116,911) - (116,911) (266) (117,177)
----------------------------------- ------- ------- --------- -------- --------- ----------- ---------
At 30 September 2022 17,422 883,652 1,766,614 338,450 3,006,138 75,661 3,081,799
----------------------------------- ------- ------- --------- -------- --------- ----------- ---------
Group Cash Flow Statement
For the six months ended 30 September 2023
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2023 2022 2023
Notes GBP'000 GBP'000 GBP'000
============================================================ ===== ========= ========= =========
Cash flow from operating activities
Profit for the period 101,391 105,209 346,802
Add back non-operating expenses/(income):
* tax 28,340 27,128 84,762
* share of equity accounted investments' (profit)/loss (137) 606 692
* net operating exceptionals 6 12,201 9,045 32,528
* net finance costs 52,335 28,780 79,732
---------------------------------------------------------------- ----- --------- --------- ---------
Group operating profit before exceptionals 194,130 170,768 544,516
Share-based payments expense 3,594 3,524 7,160
Depreciation (including right-of-use
leased assets) 116,329 105,223 219,681
Amortisation of intangible assets 53,512 50,405 111,146
Profit on disposal of property, plant
and equipment (580) (1,872) (12,346)
Amortisation of government grants (208) (9) (114)
Other (2,387) 4,703 4,654
Increase in working capital (154,082) (151,302) (13,951)
---------------------------------------------------------------- ----- --------- --------- ---------
Cash generated from operations before
exceptionals 210,308 181,440 860,746
Exceptionals (7,810) (2,492) (23,780)
---------------------------------------------------------------- ----- --------- --------- ---------
Cash generated from operations 202,498 178,948 836,966
Interest paid (including lease interest) (57,548) (39,575) (82,576)
Income tax paid (45,586) (34,668) (97,485)
---------------------------------------------------------------- ----- --------- --------- ---------
Net cash flow from operating activities 99,364 104,705 656,905
---------------------------------------------------------------- ----- --------- --------- ---------
Investing activities
Inflows:
Proceeds from disposal of property,
plant and equipment 3,404 7,797 22,643
Government grants received in relation
to property, plant and equipment 2,672 - 216
Dividends received from equity accounted
investments 1,234 - -
Interest received 8,003 10,137 15,535
---------------------------------------------------------------- ----- --------- --------- ---------
15,313 17,934 38,394
--------------------------------------------------------------- ----- --------- --------- ---------
Outflows:
Purchase of property, plant and equipment (117,434) (111,671) (229,440)
Acquisition of subsidiaries and equity
accounted investments 13 (121,298) (31,335) (318,486)
Payment of accrued acquisition related
liabilities (30,460) (10,378) (21,987)
---------------------------------------------------------------- ----- --------- --------- ---------
(269,192) (153,384) (569,913)
--------------------------------------------------------------- ----- --------- --------- ---------
Net cash flow from investing activities (253,879) (135,450) (531,519)
---------------------------------------------------------------- ----- --------- --------- ---------
Financing activities
Inflows:
Proceeds from issue of shares 204 331 348
Net cash inflow on derivative financial
instruments 64,951 - -
Increase in interest-bearing loans
and borrowings - - 603,054
---------------------------------------------------------------- ----- --------- --------- ---------
65,155 331 603,402
--------------------------------------------------------------- ----- --------- --------- ---------
Outflows:
Repayment of interest-bearing loans
and borrowings (270,836) - (393,469)
Net cash outflow on derivative financial
instruments - (8,188) (57,902)
Repayment of lease creditors (principal) (39,143) (35,396) (74,219)
Dividends paid to owners of the Parent
Company 9 (126,619) (116,911) (177,843)
Dividends paid to non-controlling
interests (310) (266) (129)
---------------------------------------------------------------- ----- --------- --------- ---------
(436,908) (160,761) (703,562)
--------------------------------------------------------------- ----- --------- --------- ---------
Net cash flow from financing activities (371,753) (160,430) (100,160)
---------------------------------------------------------------- ----- --------- --------- ---------
Change in cash and cash equivalents (526,268) (191,175) 25,226
Translation adjustment (2,517) 42,588 19,376
Cash and cash equivalents at beginning
of period 1,371,206 1,326,604 1,326,604
---------------------------------------------------------------- ----- --------- --------- ---------
Cash and cash equivalents at end
of period 842,421 1,178,017 1,371,206
---------------------------------------------------------------- ----- --------- --------- ---------
Cash and cash equivalents consists
of:
Cash and short-term bank deposits 11 882,923 1,258,065 1,421,749
Overdrafts 11 (40,502) (80,048) (50,543)
---------------------------------------------------------------- ----- --------- --------- ---------
842,421 1,178,017 1,371,206
--------------------------------------------------------------- ----- --------- --------- ---------
Notes to the Condensed Financial Statements
For the six months ended 30 September 2023
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 2023 have been prepared in accordance with
International Financial Reporting Standards ('IFRS'), the
International Financial Reporting Interpretations Committee
('IFRIC') and in accordance with IAS 34 Interim Financial Reporting
as adopted by the European Union. The Group condensed interim
financial statements have also been prepared in accordance with the
Transparency (Directive 2004/109/EC) Regulations 2007 and the
related Transparency rules of the Irish Financial Services
Regulatory Authority.
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 2023 and the comparative figures for the six
months ended 30 September 2022 are unaudited and have not been
reviewed by the Auditors. The summary financial statements for the
year ended 31 March 2023 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 2023 Annual Report and are
described in those financial statements on pages 213 to 223.
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:
-- Disclosure of Accounting Policies - Amendments to IAS 1
-- Definition of Accounting Estimates - Amendments to IAS 8
-- Insurance Contracts - IFRS 17
-- Deferred Tax related to Assets and Liabilities arising from a
Single Transaction - Amendments to IAS 12
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 80 to 83 of the 2023 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
2023 2022 2023 2023 2022 2023
StgGBP1= StgGBP1= StgGBP1= StgGBP1= StgGBP1= StgGBP1=
================= ========= ========= ========= ========= ========= =========
Euro 1.1547 1.1776 1.1597 1.1566 1.1325 1.1374
Danish krone 8.6029 8.7622 8.6304 8.6249 8.4219 8.4719
Swedish krona 13.3771 12.3516 12.4772 13.3385 12.3435 12.8304
Norwegian krone 13.4042 11.7220 11.8985 13.0158 11.9862 12.9595
US dollar 1.2566 1.2356 1.2101 1.2253 1.1040 1.2369
Canadian dollar 1.6934 1.5808 1.5934 1.6455 1.5177 1.6762
Hong Kong dollar 9.8460 9.6922 9.4837 9.5951 8.6660 9.7096
----------------- --------- --------- --------- --------- --------- ---------
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 three operating segments (as
identified under IFRS 8 Operating Segments) and generates revenue
through the following activities:
DCC Energy operates through two business segments, Energy
Solutions and Mobility. The Energy Solutions business is focused on
reducing the complexity of energy transition and delivering
affordable energy solutions. The Mobility business is focused on
developing multi-energy networks and services for people and
businesses on the move. DCC Energy is accelerating the net zero
journey of energy consumers by leading the sales, marketing and
distribution of low carbon energy solutions.
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 and domestic appliances and lifestyle products to
retailers and consumers.
The chief operating decision maker monitors the operating
results of segments separately 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 ('adjusted operating profit') and return on capital employed.
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
2023 amounted to GBP9.2 billion. This figure was not materially
different to the equivalent figure at 31 March 2023 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
2023
DCC DCC DCC
Energy Healthcare Technology Total
GBP'000 GBP'000 GBP'000 GBP'000
=========================== =========== ============= ============ ==========
Segment revenue 6,901,527 420,476 2,293,975 9,615,978
--------------------------- ----------- ------------- ------------ ----------
Adjusted operating profit 170,644 38,317 38,681 247,642
Amortisation of intangible
assets (33,544) (5,670) (14,298) (53,512)
Net operating exceptionals
(note 6) (3,022) (1,001) (8,178) (12,201)
--------------------------- ----------- ------------- ------------ ----------
Operating profit 134,078 31,646 16,205 181,929
--------------------------- ----------- ------------- ------------ ----------
Unaudited six months ended 30 September
2022
DCC DCC DCC
Energy Healthcare Technology Total
GBP'000 GBP'000 GBP'000 GBP'000
=========================== =========== ============ ============ ===========
Segment revenue 7,918,151 377,651 2,541,328 10,837,130
--------------------------- ----------- ------------ ------------ -----------
Adjusted operating profit 132,432 43,222 45,519 221,173
Amortisation of intangible
assets (30,787) (3,241) (16,377) (50,405)
Net operating exceptionals
(note 6) (6,714) (1,479) (852) (9,045)
--------------------------- ----------- ------------ ------------ -----------
Operating profit 94,931 38,502 28,290 161,723
--------------------------- ----------- ------------ ------------ -----------
Audited year ended 31 March 2023
DCC DCC DCC
Energy Healthcare Technology Total
GBP'000 GBP'000 GBP'000 GBP'000
=========================== =========== =========== =========== ===========
Segment revenue 16,119,452 821,527 5,263,867 22,204,846
--------------------------- ----------- ----------- ----------- -----------
Adjusted operating profit 457,815 91,742 106,105 655,662
Amortisation of intangible
assets (68,731) (9,318) (33,097) (111,146)
Net operating exceptionals
(note 6) (21,603) (4,367) (6,558) (32,528)
--------------------------- ----------- ----------- ----------- -----------
Operating profit 367,481 78,057 66,450 511,988
--------------------------- ----------- ----------- ----------- -----------
(b) By geography
The Group has a presence in 22 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. Revenue
from operations is derived almost entirely from the sale of goods
and is disclosed based on the location of the entity selling the
goods.
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2023 2022 2023
GBP'000 GBP'000 GBP'000
================================ ========= ========== ==========
Republic of Ireland (country of
domicile) 957,401 998,903 2,255,595
United Kingdom 3,199,914 3,807,095 7,562,103
France 1,629,130 1,730,440 3,706,272
United States 971,226 1,098,101 2,189,358
Rest of World 2,858,307 3,202,591 6,491,518
-------------------------------- --------- ---------- ----------
9,615,978 10,837,130 22,204,846
-------------------------------- --------- ---------- ----------
(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 Energy segment is of limited relevance due to the influence
of changes in underlying energy product costs on absolute revenues.
Whilst changes in underlying energy product costs will change
percentage operating margins, this has little relevance in the
downstream energy distribution market in which this segment
operates 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 this segment 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
2023
DCC DCC DCC
Energy Healthcare Technology Total
GBP'000 GBP'000 GBP'000 GBP'000
============================== =========== ============== ============= ==========
Republic of Ireland (country
of domicile) 730,753 60,438 166,210 957,401
United Kingdom 2,258,335 185,772 755,807 3,199,914
France 1,475,570 26,939 126,621 1,629,130
North America 74,135 74,710 903,337 1,052,182
Rest of World 2,362,734 72,617 342,000 2,777,351
------------------------------ ----------- -------------- ------------- ----------
Revenue 6,901,527 420,476 2,293,975 9,615,978
------------------------------ ----------- -------------- ------------- ----------
Products transferred at
point in time 6,901,527 420,476 2,293,975 9,615,978
------------------------------ ----------- -------------- ------------- ----------
Energy solutions products
and services 4,131,388 - - 4,131,388
Energy mobility products
and services 2,770,139 - - 2,770,139
Medical and pharmaceutical
products - 249,093 - 249,093
Nutrition and health & beauty
products - 171,383 - 171,383
Technology products and
services - - 2,293,975 2,293,975
------------------------------ ----------- -------------- ------------- ----------
Revenue 6,901,527 420,476 2,293,975 9,615,978
------------------------------ ----------- -------------- ------------- ----------
Unaudited six months ended 30 September
2022 (Restated)
DCC DCC DCC
Energy Healthcare Technology Total
GBP'000 GBP'000 GBP'000 GBP'000
============================== =========== ============= ============= ===========
Republic of Ireland (country
of domicile) 767,473 52,649 178,781 998,903
United Kingdom 2,763,070 201,827 842,198 3,807,095
France 1,575,703 - 154,737 1,730,440
North America 101,716 85,206 992,754 1,179,676
Rest of World 2,710,189 37,969 372,858 3,121,016
------------------------------ ----------- ------------- ------------- -----------
Revenue 7,918,151 377,651 2,541,328 10,837,130
------------------------------ ----------- ------------- ------------- -----------
Products transferred at
point in time 7,918,151 377,651 2,541,328 10,837,130
------------------------------ ----------- ------------- ------------- -----------
Energy solutions products
and services 4,628,849 - - 4,628,849
Energy mobility products
and services 3,289,302 - - 3,289,302
Medical and pharmaceutical
products - 192,496 - 192,496
Nutrition and health & beauty
products - 185,155 - 185,155
Technology products and
services - - 2,541,328 2,541,328
------------------------------ ----------- ------------- ------------- -----------
Revenue 7,918,151 377,651 2,541,328 10,837,130
------------------------------ ----------- ------------- ------------- -----------
Audited year ended 31 March 2023
DCC DCC DCC
Energy Healthcare Technology Total
GBP'000 GBP'000 GBP'000 GBP'000
============================== ========== =========== =========== ==========
Republic of Ireland (country
of domicile) 1,688,901 110,766 455,928 2,255,595
United Kingdom 5,358,282 399,599 1,804,222 7,562,103
France 3,360,372 24,173 321,727 3,706,272
North America 311,521 175,757 1,875,842 2,363,120
Rest of World 5,400,376 111,232 806,148 6,317,756
------------------------------ ---------- ----------- ----------- ----------
Revenue 16,119,452 821,527 5,263,867 22,204,846
------------------------------ ---------- ----------- ----------- ----------
Products transferred at
point in time 16,119,452 821,527 5,263,867 22,204,846
------------------------------ ---------- ----------- ----------- ----------
Energy solutions products and
services 9,996,896 - - 9,996,896
Energy mobility products and
services 6,122,556 - - 6,122,556
Medical and pharmaceutical
products - 448,931 - 448,931
Nutrition and health & beauty
products - 372,596 - 372,596
Technology products and
services - - 5,263,867 5,263,867
------------------------------ ---------- ----------- ----------- ----------
Revenue 16,119,452 821,527 5,263,867 22,204,846
------------------------------ ---------- ----------- ----------- ----------
6. Exceptionals
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2023 2022 2023
GBP'000 GBP'000 GBP'000
------------------------------------------ ---------- ---------- ----------
Restructuring and integration costs and
other (8,411) (4,019) (13,401)
Acquisition and related costs (3,790) (5,026) (10,604)
Adjustments to contingent acquisition
consideration - - (8,523)
------------------------------------------ ---------- ---------- ----------
Net operating exceptional items (12,201) (9,045) (32,528)
Mark to market of swaps and related debt 12 2,504 892
------------------------------------------ ---------- ---------- ----------
Net exceptional items before taxation (12,189) (6,541) (31,636)
Income tax and deferred tax attaching
to exceptional items (15) (498) 2,764
------------------------------------------ ---------- ---------- ----------
Net exceptional items after taxation (12,204) (7,039) (28,872)
Non-controlling interests share of net
exceptional items after taxation - 91 211
------------------------------------------ ---------- ---------- ----------
Net exceptional items attributable to
owners of the Parent Company (12,204) (6,948) (28,661)
------------------------------------------ ---------- ---------- ----------
Restructuring and integration costs and other of GBP8.411
million relates to the restructuring of operations across a number
of businesses and recent acquisitions. Most of the cost relates to
optimisation and integration of operations in the Technology
division.
Acquisition and related costs include the professional fees and
tax costs relating to the evaluation and completion of acquisition
opportunities and amounted to GBP3.790 million.
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 2023, this amounted to an exceptional non-cash gain of
GBP12,000. 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 GBP1.434 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 20.3% (six months ended 30 September
2022: 19.5% and year ended 31 March 2023: 19.3%).
8. Earnings per Ordinary Share
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2023 2022 2023
GBP'000 GBP'000 GBP'000
=================================================== ========= ========= =========
Profit attributable to owners of the Parent
Company 93,029 97,526 334,022
Amortisation of intangible assets after
tax 42,192 40,007 87,690
Exceptionals after tax (note 6) 12,204 6,948 28,661
--------------------------------------------------- --------- --------- ---------
Adjusted profit after taxation and non-controlling
interests 147,425 144,481 450,373
--------------------------------------------------- --------- --------- ---------
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2023 2022 2023
Basic earnings per ordinary share pence pence pence
=========================================== ========= ========= =========
Basic earnings per ordinary share 94.20p 98.83p 338.40p
Amortisation of intangible assets after
tax 42.72p 40.55p 88.84p
Exceptionals after tax 12.35p 7.04p 29.03p
------------------------------------------- --------- --------- ---------
Adjusted basic earnings per ordinary share 149.27p 146.42p 456.27p
------------------------------------------- --------- --------- ---------
Weighted average number of ordinary shares
in issue (thousands) 98,762 98,679 98,707
------------------------------------------- --------- --------- ---------
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
2023 2022 2023
Diluted earnings per ordinary share pence pence pence
=========================================== ========= ========= =========
Diluted earnings per ordinary share 94.14p 98.77p 338.04p
Amortisation of intangible assets after
tax 42.70p 40.51p 88.74p
Exceptionals after tax 12.35p 7.04p 29.01p
------------------------------------------- --------- --------- ---------
Adjusted diluted earnings per ordinary
share 149.19p 146.32p 455.79p
------------------------------------------- --------- --------- ---------
Weighted average number of ordinary shares
in issue (thousands) 98,815 98,745 98,811
------------------------------------------- --------- --------- ---------
The earnings used for the purposes of the diluted earnings per
ordinary share calculations were GBP93.029 million (six months
ended 30 September 2022: GBP97.526 million) and GBP147.425 million
(six months ended 30 September 2022: GBP144.481 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 2023 was 98.815 million (six months ended
30 September 2022: 98.745 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
2023 2022 2023
'000 '000 '000
============================================= ========= ========= =========
Weighted average number of ordinary shares
in issue 98,762 98,679 98,707
Dilutive effect of options and awards 53 66 104
--------------------------------------------- --------- --------- ---------
Weighted average number of ordinary shares
for diluted earnings
per share 98,815 98,745 98,811
--------------------------------------------- --------- --------- ---------
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.
9. Dividends
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2023 2022 2023
Dividends paid per ordinary share: GBP'000 GBP'000 GBP'000
------------------------------------- --------- --------- ---------
Interim - paid 60.04 pence per share
on 9 December 2022 - - 59,128
Final - paid 127.17 pence per share
on 20 July 2023
(2023: paid 119.83 pence per share
on 21 July 2022) 126,619 116,911 118,715
------------------------------------- --------- --------- ---------
126,619 116,911 177,843
------------------------------------- --------- --------- ---------
On 13 November 2023, the Board approved an interim dividend of
63.04 pence per share (GBP62.265 million). These condensed interim
financial statements do not reflect this dividend payable.
10. Other Reserves
For the six months ended 30 September 2023
Share Foreign
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 2023 54,596 (48,280) 128,529 932 135,777
Currency translation - - (26,087) - (26,087)
Movements relating to cash
flow hedges - 59,931 - - 59,931
Movement in deferred tax liability
on cash flow hedges - (11,567) - - (11,567)
Share based payment 3,594 - - - 3,594
----------------------------------- -------- --------- ------------ --------- ----------
At 30 September 2023 58,190 84 102,442 932 161,648
----------------------------------- -------- --------- ------------ --------- ----------
For the six months ended 30 September 2022
Share Foreign
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 2022 47,436 85,768 87,272 932 221,408
Currency translation - - 163,213 - 163,213
Movements relating to cash
flow hedges - (59,784) - - (59,784)
Movement in deferred tax liability
on cash flow hedges - 10,089 - - 10,089
Share based payment 3,524 - - - 3,524
----------------------------------- -------- --------- ------------ --------- ----------
At 30 September 2022 50,960 36,073 250,485 932 338,450
----------------------------------- -------- --------- ------------ --------- ----------
For the year ended 31 March 2023
Cash Foreign
Share based flow currency
payment hedge translation Other
reserve reserve reserve reserves Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------- --------- ------------ --------- ---------
At 1 April 2022 47,436 85,768 87,272 932 221,408
Currency translation - - 41,257 - 41,257
Movements relating to cash
flow hedges - (164,422) - - (164,422)
Movement in deferred tax liability
on cash flow hedges - 30,374 - - 30,374
Share based payment 7,160 - - - 7,160
------------------------------------ ------ --------- ------------ --------- -----------
At 31 March 2023 54,596 (48,280) 128,529 932 135,777
------------------------------------ ------ --------- ------------ --------- -----------
11. Analysis of Net Debt
Unaudited Unaudited Audited
30 Sept. 30 Sept. 31 March
2023 2022 2023
GBP'000 GBP'000 GBP'000
------------------------------------- ----------- ----------- -----------
Non-current assets
Derivative financial instruments 52,021 143,547 89,199
------------------------------------- ----------- ----------- -----------
Current assets
Derivative financial instruments 71,107 178,101 59,258
Cash and cash equivalents 882,923 1,258,065 1,421,749
------------------------------------- ----------- ----------- -----------
954,030 1,436,166 1,481,007
------------------------------------- ----------- ----------- -----------
Non-current liabilities
Derivative financial instruments (39,305) (51,789) (40,585)
Bank borrowings (34,584) (461,958) (35,168)
Unsecured Notes (1,566,087) (1,389,094) (1,898,591)
------------------------------------- ----------- ----------- -----------
(1,639,976) (1,902,841) (1,974,344)
------------------------------------- ----------- ----------- -----------
Current liabilities
Bank borrowings (40,502) (80,048) (50,543)
Derivative financial instruments (29,385) (79,426) (42,341)
Unsecured Notes (335,302) (299,698) (270,313)
------------------------------------- ----------- ----------- -----------
(405,189) (459,172) (363,197)
------------------------------------- ----------- ----------- -----------
Net debt (excluding lease creditors) (1,039,114) (782,300) (767,335)
------------------------------------- ----------- ----------- -----------
Lease creditors (non-current) (274,607) (270,188) (275,388)
Lease creditors (current) (72,763) (65,770) (71,158)
------------------------------------- ----------- ----------- -----------
Total lease creditors (347,370) (335,958) (346,546)
------------------------------------- ----------- ----------- -----------
Net debt (including lease creditors) (1,386,484) (1,118,258) (1,113,881)
------------------------------------- ----------- ----------- -----------
An analysis of the maturity profile of the Group's net debt
(including lease creditors) at 30 September 2023 is as follows:
Between
Between 2 and
Less than 1 and 2 5 Over
1 year years years 5 years Total
As at 30 September 2023 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
=================================== ========= ========= ========= =========== ===========
Cash and short-term deposits 882,923 - - - 882,923
Overdrafts (40,502) - - - (40,502)
=================================== ========= ========= ========= =========== =============
Cash and cash equivalents 842,421 - - - 842,421
Bank borrowings - - (34,584) - (34,584)
Unsecured Notes (335,302) (90,590) (522,657) (952,840) (1,901,389)
Derivative financial instruments:
- Unsecured Notes 45,023 15,888 (3,057) (1,797) 56,057
- Other (3,301) 725 957 - (1,619)
----------------------------------- --------- --------- --------- ----------- -------------
Net debt (excluding lease
creditors) 548,841 (73,977) (559,341) (954,637) (1,039,114)
Lease creditors (72,763) (57,322) (106,192) (111,093) (347,370)
----------------------------------- --------- --------- --------- ----------- -------------
Net debt (including lease
creditors) 476,078 (131,299) (665,533) (1,065,730) (1,386,484)
----------------------------------- --------- --------- --------- ----------- -------------
The Group's Unsecured Notes fall due between 21 April 2024 and 4
April 2034 with an average maturity of 5.1 years at 30 September
2023. The full fair value of a hedging derivative is allocated to
the time period corresponding to the maturity of the hedged
item.
12. Post Employment Benefit Obligations
The Group's defined benefit pension schemes' assets were
measured at fair value at 30 September 2023. The defined benefit
pension schemes' liabilities at 30 September 2023 were updated to
reflect material movements in underlying assumptions.
The Group's post-employment benefit obligations moved from a net
asset of GBP11.721 million at 31 March 2023 to a net asset of
GBP13.482 million at 30 September 2023. This movement was primarily
driven by an actuarial gain on liabilities arising from an increase
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 2023:
Unaudited Unaudited Audited
6 months 6 months year
ended ended
30 Sept. 30 Sept. ended
2023 2022 31 March
2023
------------------- --------- --------- ---------
Discount rate
Republic of Ireland 4.60% 4.10% 4.10%
United Kingdom 5.60% 4.90% 4.85%
Germany 4.60% 4.10% 4.10%
------------------- --------- --------- ---------
13. 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 Energy of 100% of Hafod Renewables in
May 2023. Hafod is a supplier and installer of renewable energy
sources in the UK ;
-- The acquisition by DCC Energy of 100% of O'sitoit in May
2023. O'sitoit is a solar installer in central and eastern France
;
-- The acquisition by DCC Energy of 100% of AEI in May 2023. AEI
is a leading solar installation and services business in Ireland
;
-- The acquisition by DCC Energy of 100% of Centreco in July
2023. Centreco is a market-leading solar PV and energy consultancy
business in the UK which services commercial and industrial
customers nationally;
-- The acquisition by DCC Energy of 100% of SLER40 in July 2023.
SLER40 is a French Solar PV and heat pump business servicing
domestic and commercial customers with design, installation, and
maintenance services ;
-- The acquisition by DCC Energy of 100% of Isolatiespecialist
in August 2023. Isolatiespecialist is a leading provider of energy
efficiency and insulation services to domestic and commercial
customers in the Netherlands ;
-- The acquisition by DCC Energy of 100% of San Isabel Services
Propane in August 2023. San Isabel Services Propane is a US LPG
distributor which services both domestic and commercial customers
in Colorado; and
-- The acquisition by DCC Energy of 100% of Solcellekraft in
September 2023. Solcellekraft is one of Norway's largest Solar PV
businesses, servicing commercial and domestic customers.
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 2023.
6 months 6 months
ended ended
30 Sept. 30 Sept.
2023 2022
GBP'000 GBP'000
-------------------------------- ----------- ----------
Assets
Non-current assets
Property, plant and equipment 3,192 3,721
Right-of-use leased assets 2,725 -
Equity accounted investments - 18,260
Total non-current assets 5,917 21,981
---------------------------------------- ----------- ----------
Current assets
Inventories 6,374 372
Trade and other receivables 16,071 2,115
---------------------------------------- ----------- ----------
Total current assets 22,445 2,487
---------------------------------------- ----------- ----------
Liabilities
Non-current liabilities
Deferred income tax liabilities (158) (12)
Provisions for liabilities
and charges (389) -
Lease creditors (2,104) -
---------------------------------------- ----------- ----------
Total non-current liabilities (2,651) (12)
---------------------------------------- ----------- ----------
Current liabilities
Trade and other payables (14,885) (2,295)
Current income tax liability (1,447) (890)
Lease creditors (621) -
---------------------------------------- ----------- ----------
Total current liabilities (16,953) (3,185)
---------------------------------------- ----------- ----------
Identifiable net assets
acquired 8,758 21,271
Intangible assets and goodwill 166,763 13,926
---------------------------------------- ----------- ----------
Total consideration 175,521 35,197
---------------------------------------- ----------- ----------
Satisfied by:
Cash 126,635 32,509
Cash and cash equivalents
acquired (5,337) (1,174)
---------------------------------------- ----------- ----------
Net cash outflow 121,298 31,335
Acquisition related liabilities 54,223 3,862
---------------------------------------- ----------- ----------
Total consideration 175,521 35,197
---------------------------------------- ----------- ----------
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 2024 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 GBP3.790 million
(six months ended 30 September 2022: GBP5.026 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 GBP16.942 million.
The fair value of these receivables is GBP16.071 million (all of
which is expected to be recoverable).
Approximately GBP12.2 million of the goodwill acquired in 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 GBP1.4 million
to GBP92.4 million.
The acquisitions during the period contributed GBP19.6 million
to revenues and GBP2.4 million to profit after tax. Had all the
business combinations completed during the period occurred at the
beginning of the period, total Group revenue for the six months
ended 30 September 2023 would have been GBP9.7 billion and total
Group profit after tax would have been GBP106.8 million.
14. Seasonality of Operations
The Group's operations are significantly second-half weighted
primarily due to a portion of the demand for DCC Energy's 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
2023 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 2023.
16. Events after the Balance Sheet Date
There have been no material events subsequent to 30 September
2023 which would require disclosure in this Report.
17. Board Approval
This report was approved by the Board of Directors of DCC plc on
13 November 2023.
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 director's responsibilities
We confirm that to the best of our knowledge:
-- the condensed set of interim financial statements for the six
months ended 30 September 2023 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, Chairman
Donal Murphy , Chief Executive
13 November 2023
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 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
2023 2022 2023
Calculation GBP'000 GBP'000 GBP'000
--------------------------- --------- --------- ----------
Operating profit 181,929 161,723 511,988
Net operating exceptional
items 12,201 9,045 32,528
Amortisation of intangible
assets 53,512 50,405 111,146
--------------------------- --------- --------- ----------
Adjusted operating profit
('EBITA') 247,642 221,173 655,662
--------------------------- --------- --------- ----------
Net interest before exceptional items
Definition
The Group defines net interest before exceptional items 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
2023 2022 2023
Calculation GBP'000 GBP'000 GBP'000
---------------------------------- --------- --------- ----------
Finance costs before exceptional
items (60,270) (41,469) (96,735)
Finance income before exceptional
items 7,923 10,185 16,111
Net interest before exceptional
items (52,347) (31,284) (80,624)
---------------------------------- --------- --------- ----------
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 adjusted operating profit
less net interest before exceptional items.
6 months 6 months
ended ended Year ended
30 Sept. 30 Sept. 31 March
2023 2022 2023
Calculation GBP'000 GBP'000 GBP'000
--------------------------------------------- --------- --------- ----------
Adjusted operating profit 247,642 221,173 655,662
Net interest before exceptional items (52,347) (31,284) (80,624)
--------------------------------------------- --------- --------- ----------
Earnings before taxation 195,295 189,889 575,038
--------------------------------------------- --------- --------- ----------
Income tax expense 28,340 27,128 84,762
Income tax attaching to net exceptionals (15) (498) 2,764
Deferred tax attaching to amortisation
of intangible assets 11,320 10,398 23,456
--------------------------------------------- --------- --------- ----------
Total income tax expense before exceptionals
and deferred tax attaching to amortisation
of intangible assets 39,645 37,028 110,982
--------------------------------------------- --------- --------- ----------
Effective tax rate (%) 20.3% 19.5% 19.3%
--------------------------------------------- --------- --------- ----------
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.
2023 2022
Revenue (constant currency) GBP'000 GBP'000
--------------------------------------------------- --------- ---------
Revenue 9,615,978 10,837,130
Currency impact 21,673 -
--------------------------------------------------- --------- -------------
Revenue (constant currency) 9,637,651 10,837,130
--------------------------------------------------- --------- -------------
Adjusted operating profit (constant currency)
--------------------------------------------------- --------- -------------
Adjusted operating profit 247,642 221,173
Currency impact 536 -
--------------------------------------------------- --------- -------------
Adjusted operating profit (constant currency) 248,178 221,173
--------------------------------------------------- --------- -------------
Adjusted earnings per share (constant currency)
--------------------------------------------------- --------- -------------
Adjusted profit after taxation and non-controlling
interests (note 8) 147,425 144,481
Currency impact 552 -
--------------------------------------------------- --------- -------------
Adjusted profit after taxation and non-controlling
interests (constant currency) 147,977 144,481
Weighted average number of ordinary shares in
issue ('000) 98,762 98,679
--------------------------------------------------- --------- -------------
Adjusted earnings per share (constant currency) 149.83p 146.42p
--------------------------------------------------- --------- -------------
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
2023 2022 2023
Calculation GBP'000 GBP'000 GBP'000
------------------------------------------ --------- --------- ----------
Purchase of property, plant and equipment 117,434 111,671 229,440
Government grants received in relation to
property, plant and equipment (2,672) - (216)
Proceeds from disposal of property,
plant and equipment (3,404) (7,797) (22,643)
------------------------------------------ --------- --------- --------------
Net capital expenditure 111,358 103,874 206,581
------------------------------------------ --------- --------- --------------
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
2023 2022 2023
Calculation GBP'000 GBP'000 GBP'000
------------------------------- --------- --------- ----------
Cash generated from operations
before exceptionals 210,308 181,440 860,746
Repayment of lease creditors (44,490) (39,954) (83,796)
Net capital expenditure (111,358) (103,874) (206,581)
------------------------------- --------- --------- ----------
Free cash flow 54,460 37,612 570,369
------------------------------- --------- --------- ----------
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. As noted
in the definition of free cash flow, interest amounts relating to
the repayment of lease creditors has been deducted in arriving at
the Group's free cash flow and are therefore excluded from the
interest paid figure in arriving at the Group's free cash flow
(after interest and tax payments).
6 months 6 months
ended ended Year ended
30 Sept. 30 Sept. 31 March
2023 2022 2023
Calculation GBP'000 GBP'000 GBP'000
----------------------------------------- --------- --------- ----------
Free cash flow 54,460 37,612 570,369
Interest paid (including interest
relating to lease creditors) (57,548) (39,575) (82,576)
Interest relating to lease creditors 5,347 4,558 9,577
Income tax paid (45,586) (34,668) (97,485)
Dividends received from equity accounted
investments 1,234 - -
Interest received 8,003 10,137 15,535
----------------------------------------- --------- --------- --------------
Free cash flow (after interest and
tax payments) (34,090) (21,936) 415,420
----------------------------------------- --------- --------- --------------
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
2023 2022 2023
Calculation GBP'000 GBP'000 GBP'000
-------------------------------------------- ----------- --------- ----------
Net cash outflow on acquisitions during
the period 121,298 31,335 318,486
Net cash outflow on acquisitions which were
committed to in the
previous period (17,246) (25,377) (26,059)
Acquisition related liabilities arising
on acquisitions during the period 54,223 3,862 46,654
Acquisition related liabilities which were
committed to in the
previous period (7,735) (420) (431)
Amounts committed in the current period 160,000 294,240 23,060
--------------------------------------------- ---------- --------- --------------
Committed acquisition expenditure 310,540 303,640 361,710
--------------------------------------------- ---------- --------- --------------
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
2023 2022 2023
Calculation GBP'000 GBP'000 GBP'000
========================================== =========== =========== ===========
Inventories 1,335,355 1,454,627 1,192,803
Trade and other receivables 2,015,679 2,218,757 2,312,269
Less: interest receivable (469) (232) (558)
Trade and other payables (2,944,129) (3,250,559) (3,279,898)
Less: interest payable 24,189 15,181 25,231
Less: amounts due in respect of property,
plant and equipment 9,514 10,980 24,492
Less: government grants 20 13 31
------------------------------------------ ----------- ----------- -----------
Net working capital 440,159 448,767 274,370
------------------------------------------ ----------- ----------- -----------
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
2023 2022 2023
Calculation GBP'000 GBP'000 GBP'000
======================= ========= ========= =========
Net working capital 440,159 448,767 274,370
March revenue 1,786,999 1,986,225 2,068,648
----------------------- --------- --------- ---------
Working capital (days) 7.4 days 6.8 days 4.1 days
----------------------- --------- --------- ---------
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END
IR FZMMMRFGGFZM
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