Interim Management Statement

RNS Number : 4478K

DCC PLC

15 July 2011

 



DCC plc

Interim Management Statement

DCC plc, the sales, marketing, distribution and business support services group listed on both the Irish and London stock exchanges, is issuing this Interim Management Statement in accordance with the reporting requirements of the Transparency Regulations 2007, in advance of the Company's AGM to be held in Dublin at 11.00 am today. 

First Quarter ended 30 June 2011

As previously advised in the Group's Preliminary Results Announcement on 10 May 2011, DCC Energy, DCC's largest division, was impacted by what was the mildest April on record with temperatures significantly warmer than April last year and this, along with the impact of the number of public holidays in the UK, resulted in DCC Energy's trading being well behind the prior year.  May also transpired to be a much milder month than May last year.

DCC SerCom, DCC's second largest division, traded well ahead of the prior year, notwithstanding a less favourable environment for consumer demand.  The growth was driven by SerCom Distribution which was strongly ahead of last year due to the benefit of acquisitions completed in the prior year and modest organic growth.

DCC Healthcare, DCC Environmental and DCC Food & Beverage traded broadly in line with or modestly ahead of expectations.

Overall Group trading in the first two months of the quarter was impacted by results in DCC Energy.  June has been a better month with Group operating profit well ahead of the prior year; however, reflecting trading in April and May, Group operating profit for the first quarter (which was budgeted to represent approximately 15% of the Group's profit for the year) was well behind the prior year and budget.  The Group's half year to 30 September 2011, which was budgeted to represent approximately 30% of the profit for the year, will be impacted by the result for the first quarter.

Year to 31 March 2012

The outlook for the year to 31 March 2012 continues to be framed against a difficult economic environment, particularly in the UK, and DCC's usual assumption that there will be a return to a more normal weather pattern compared to the extremely cold winter last year.

At this early stage, the Group anticipates that operating profit and adjusted earnings per share, both on a constant currency basis, will be broadly in line with to modestly behind the prior year. 

On a reported basis, and assuming an exchange rate of Stg£0.8800 = €1, this would result in operating profit and adjusted earnings per share being approximately a mid single digit percentage behind the prior year.

The Group remains in a very strong financial position and is actively pursuing a range of development opportunities.

Acquisitions year to date

The cash outlay on acquisitions in the quarter was €21 million.

In relation to the proposed acquisition of Pace Fuelcare, a British oil distribution business (announced on 17 February 2011), the UK Office of Fair Trading ("OFT") announced on 24 June 2011 that it was considering an offer to divest Pace Fuelcare's Isle of Wight operation in order to avoid the transaction as a whole being subject to an in-depth investigation by the UK Competition Commission.   The Pace Fuelcare business sold 515 million litres of fuel in its last financial year to independent retail petrol stations and a broad range of commercial, industrial, agricultural and domestic customers. The Isle of Wight operation is a small portion of the overall Pace Fuelcare business.  The acquisition, which had been subject to clearance from the OFT, is expected to be completed once this divestment pre-condition has been satisfied in the coming weeks.

In April, the scale of the Group's oil distribution business in Austria was increased when DCC Energy completed the acquisition of the trade and certain assets of Top Oil GmbH, a 140 million litre oil distributor based in Northern Austria for a modest initial consideration.

In May 2011, DCC Healthcare invested €9 million in acquiring the business, product licences and certain other assets of Neolab Limited, a British generic pharmaceuticals business based in Hampshire.  The Neolab business is involved in the sourcing, registration, sales, marketing and distribution of generic pharmaceuticals and sells into the British community pharmacy sector under the Neolab and private label brands.  Its portfolio covers a broad range of therapy areas including analgesia, respiratory, cardiology and psychiatry. There is a good strategic fit between the Neolab business and DCC Healthcare's existing pharma activities and the two businesses are being integrated, which will deepen DCC's product registration expertise, broaden its product portfolio and open up new channels to market and supplier relationships. The Neolab product range and pipeline of new product registrations is well placed to benefit from market trends towards generic prescribing.

On 23 June 2011, DCC announced the acquisition by DCC Environmental Britain Limited of Oakwood Fuels Limited for an initial consideration of €11 million.  Oakwood is a British waste oil and hazardous waste collection, processing and recycling business based in Nottinghamshire. It collects waste lubricant oil and hazardous waste from businesses in a variety of sectors and converts the waste oil to processed fuel oil which is then sold to customers for use in a number of applications including road surfacing operations, aggregate drying, industrial and agricultural drying, power stations, large boilers and furnaces. This acquisition broadens DCC Environmental's service offering into additional complementary waste streams in Britain and capitalises on the trend towards more sustainable waste management and in particular increased waste recovery and recycling.

Date for Interim Results

DCC expects to announce its interim results for the six months to 30 September 2011 on Tuesday 8 November 2011. 

For reference:                                                                                               

Tommy Breen, Chief Executive

Fergal O'Dwyer, Chief Financial Officer

Redmond McEvoy, Investor Relations Manager

Telephone: [phone]

Email: [e-mail]

Web: 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 risks and uncertainties.  DCC believes that its expectations and assumptions with respect to these forward-looking statements are reasonable.  However, because they involve risk and uncertainty, which are in some cases beyond DCC's control, actual results or performance may differ materially from those expressed or implied by such forward-looking information.

About DCC plc

DCC plc is a sales, marketing, distribution and business support services group headquartered in Dublin with operations in Britain, continental Europe and Ireland. DCC has five divisions - DCC Energy, DCC SerCom, DCC Healthcare, DCC Environmental and DCC Food & Beverage. In its last financial year ended 31 March 2011, DCC generated revenues of €8.7 billion and operating profits of €230 million and currently employs approximately 8,000 people. DCC's shares are listed on both the Irish and London stock exchanges under Business Support Services.   

 

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