Interim Results
DCC PLC
12 November 2001
12 November 2001
DCC Group Earnings up 19.3%
Interim Results for the Six Months ended 30 September 2001
EUR
Turnover 925.6 m Up 12.5%
Operating profit 39.2 m Up 14.4%
Profit before net exceptional 37.2 m Up 15.9%
gains, goodwill amortisation and taxation
Profit after taxation and 29.0 m Up 19.3%
minorities
Adjusted earnings per share* 36.83 cent Up 20.1%
Dividend per share 9.288 cent Up 20.0%
Net cash at 30 September 2001 36.9 m
* adjusted to exclude net exceptional gains and goodwill amortisation
DCC, the leading value added marketing and distribution group, today announced
its results for the six months ended 30 September 2001. Commenting on the
results, DCC's Chief Executive & Deputy Chairman, Jim Flavin, said:
'This result reflects well on the resilience of DCC's balanced business model
which is focused on value added marketing and distribution across a number of
market sectors.
This was an excellent result driven principally by organic growth and, in the
context of an increasingly difficult economic climate, we expect to achieve
very good growth for the full year.'
For reference, please contact:
Jim Flavin, Chief Executive & Deputy Chairman
Fergal O'Dwyer, Chief Financial Officer
Conor Costigan, Investor Relations Manager
Tel: +353 1 2799 400
Email: investorrelations@dcc.ie
www.dcc.ie
Results
The strong results in the six months ended 30 September 2001 reflect well on
the resilience of DCC's balanced business model which is focused on value
added marketing and distribution across a number of market sectors.
- Turnover was up 12.5% to EUR 925.6 million.
- Operating profit was up 14.4% to EUR 39.2 million.
- The net interest charge for the period was EUR 2.0 million (EUR 2.1
million).
- Profit before net exceptional gains, goodwill amortisation and taxation
increased by 15.9% to EUR 37.2 million.
- The taxation rate was 14.0% (15% in prior year).
- Profit after taxation and minorities grew by 19.3% to EUR 29.0 million.
- Adjusted earnings per share (i.e. excluding net exceptional gains and
goodwill amortisation) increased by 20.1% to 36.83 cent.
- Interim dividend is up 20.0% to 9.288 cent.
Business Highlights
DCC is a value added marketing and distribution group, operating principally
in the IT, energy and healthcare markets. DCC holds strong market positions
in Britain and Ireland and is expanding in Continental Europe.
- IT - operating profit EUR 13.2m Up 13.1%
SerCom Distribution achieved an excellent result
in very difficult market conditions for the IT
industry. There was particularly good growth in
software and in computer storage products.
- Energy - operating profit EUR 8.2m Up 44.3%
Energy achieved excellent profit growth driven by
increased volumes and more stable oil prices.
- Healthcare - operating profit EUR 10.6m Up 8.4%
Healthcare achieved good organic profit growth
reflecting increased profits in Hospital Supply
and Mobility & Rehab.
- Other activities - operating profit EUR 7.2m Up 1.0%
Strong profit growth in Food was offset by the
impact on SerCom Solutions of the slowdown in the
IT market.
- Group operating profit EUR 39.2m Up 14.4%
Development Activity
DCC has an excellent record of business building through a particular focus on
achieving strong organic growth, supplemented by complementary acquisitions.
In total, EUR 92.9 million was committed to organic growth and acquisitions in
the first half.
A number of strategically important bolt-on acquisitions were completed during
the period:
- The acquisition of BP's oil marketing and distribution business in
Scotland and northern England (now called Scottish Fuels) was completed
during the period and on 1 October, Noble Fuels, a geographically
complementary distributor based in Teeside, was acquired. As a result of
these acquisitions, DCC Energy is now the market leader in oil
distribution in Scotland as well as Northern Ireland and has an excellent
platform for further growth in Britain.
- The acquisition of Envirotech broadens DCC's growing environmental
services business into the water treatment sector. Environmental services
is a high growth market and DCC plans continued development in this area.
- In IT Distribution, the acquisition of AGP, a south of England based
distributor of computer storage products, has accelerated DCC's growth in
computer storage products in Britain, building on DCC's Continental
European strength in this product category.
Acquisition commitments totalled EUR 30.3 million in the period. The cash
impact of acquisitions amounted to EUR 16.9 million (including the payment of
EUR 3.0 million of deferred consideration, which had been provided for at 31
March 2001).
Investment in working capital and fixed assets amounted to EUR 62.6 million.
There was an increase in working capital of EUR 48.4 million, reflecting
normal seasonality and sales growth in the period - working capital days at
21.9 days were consistent with last year. Capital expenditure was EUR 14.2
million.
Financial Strength and Share Buy Back
As announced on 28 September 2001, the Board took advantage of the Group's
attractive share price and strong balance sheet to buy back 2,275,000 shares,
representing 2.7% of the listed share capital, at EUR 9.25 per share, for a
total consideration of EUR 21.04 million. Settlement of this transaction took
place after 30 September 2001 and therefore did not reduce the net cash figure
at that date. Combining this buy back and the 2,563,045 shares purchased on 28
July 2000, the total number of shares that have been bought back amounts to
4,838,045, representing 5.5% of DCC's issued share capital.
At 30 September 2001, the Group had net cash of EUR 36.9 million and
shareholders' funds of EUR 355.4 million. DCC's strong financial position
leaves the Group well placed to pursue its growth objectives and, if deemed
appropriate, to buy back more shares.
Dividend
The Board has decided to pay an interim dividend of 9.288 cent per share - up
20.0% on the interim dividend paid in the previous financial year. The interim
dividend will be paid on 30 November 2001 to shareholders on the register at
the close of business on 23 November 2001.
FTSE Reclassification to Business Support Services
As announced on 2 November, the FTSE Global Classification Committee has
reclassified DCC to the Business Support Services sector with effect from the
close of business on 31 December 2001. DCC welcomes this reclassification to
a bigger, more highly rated and more liquid sector which has a broader analyst
following.
Outlook
DCC's balanced business model leaves it well positioned to continue to achieve
excellent long-term shareholder returns and, in the context of an increasingly
difficult economic climate, to achieve very good growth for the full year.
Operating Review
IT (SerCom Distribution)
2001 2000
Turnover EUR 363.7m EUR 327.9m +10.9%
Operating profit EUR 13.2m EUR 11.6m +13.1%
Operating margin 3.62% 3.55%
SerCom Distribution achieved an excellent result in very difficult market
conditions for the IT industry. There was particularly good growth in
software and in computer storage products.
Micro P, the British hardware distributor, grew its profits and further
strengthened its position in the marketplace. The acquisition of AGP, a south
of England based computer storage products distributor, has created a strong
platform from which to develop a much larger business in the growing computer
storage products sector.
Gem, the British software distributor, had an excellent first half. The
company continues to benefit from its focus on the consumer software market,
as the value of Gem's expertise is recognised by an increasing number of
software publishers. In October, Microsoft announced the appointment of Gem
as sole distributor of the Xbox console, software and peripherals for the UK
and Irish markets. The Xbox is due for launch in these markets in the first
quarter of 2002 and represents a significant opportunity for Gem.
In Continental Europe, Distrilogie had a strong first half based on continued
growth in demand for computer storage products. Distrilogie's performance has
been formally recognised by a number of its vendors including IBM, which has
named the company as its largest storage distributor in Europe.
The Irish business, Sharptext, had a difficult first half due to its product
range being particularly impacted by the significant slowdown in the IT
market.
Energy
2001 2000
Turnover EUR 295.6m EUR 254.3m +16.2%
Operating profit EUR 8.2m EUR 5.7m +44.3%
Operating margin 2.8% 2.2%
Energy achieved excellent profit growth driven by increased volumes and more
stable oil prices.
Oil volumes benefited from a full six months' contribution from Fuel
Services, the Northern Ireland based company acquired in July 2000.
LPG volumes were satisfactory with particularly strong growth achieved in the
autogas sector in Britain. The use of LPG autogas as a transport fuel
continues to grow in Britain and DCC has a significant share of this fast
growing segment of the market.
A number of strategically important bolt-on acquisitions have been completed
in the period which have opened up interesting complementary growth
opportunities for DCC's energy activities:
- The acquisition of BP's oil marketing and distribution business in
Scotland and northern England (now called Scottish Fuels), together with
the subsequent acquisition of Noble Fuels, has extended DCC's fast
growing oil marketing and distribution activities into Britain and
provides an excellent platform for further growth in this market.
- DCC has had a strong presence in the oil treatment sector of the
environmental services market in Ireland for a number of years. The
acquisition of Envirotech broadens DCC's growing environmental services
business into the water treatment sector. Environmental services is a
high growth market and DCC plans continued development in this area.
Healthcare
2001 2000
Turnover EUR 100.8m EUR 97.8m +3.1%
Operating profit EUR 10.6m EUR 9.8m +8.4%
Operating margin 10.6% 10.0%
Healthcare achieved good organic profit growth reflecting increased profits in
Hospital Supply and Mobility & Rehab.
The Irish Hospital Supply business achieved good growth and has recently
secured significant new distribution agreements. Fannin Healthcare has
enhanced its customer service to Irish hospitals through the launch of a
customised e-commerce system in August, initially to a number of major Irish
hospitals.
There was continued good profit growth in the Mobility & Rehabilitation
businesses. Strong sales growth in the domestic British market was somewhat
offset by more competitive export markets.
Operating profits in the Nutraceuticals business, while in line with the prior
year, were impacted by the loss of a major customer towards the end of the
period (as referred to in the operating review for the year ended 31 March
2001). This will have a greater impact on Nutraceuticals in the second half.
Other Activities
2001 2000
Turnover EUR 165.5m EUR 142.6m +16.1%
Operating profit EUR 7.2m EUR 7.1m +1.0%
Operating margin 4.4% 5.0%
Strong profit growth in Food was offset by the impact on SerCom Solutions of
the slowdown in the IT market.
Food - Operating profits were EUR 5.1 million, an increase of 17.9% over the
prior year. Sales for the period of EUR 90.1 million benefited from the
increased investment in the prior year in sales and distribution resources,
including an expanded van sales force. Sales growth was 8.7%, after adjusting
for the cessation of Kylemore's fresh bakery activities.
Supply Chain Management Services - The completion of the developmental
investment in SerCom Solutions towards the end of the last financial year
coincided with the severe slowdown in the IT and telecommunications markets.
While sales in the first half grew by 32.3% to EUR 53.5 million, driven
principally by increased lower margin procurement activity on behalf of
customers, an operating loss of EUR 0.2 million was incurred (profit of EUR
0.7 million in the prior year).
While market conditions in the IT sector are not expected to improve in the
second half, SerCom Solutions is well placed to take advantage of
opportunities which should arise when more normal market conditions prevail.
Other - Operating profit from other interests increased by 5.6% to EUR 2.3
million. The principal other interest is DCC's 49% shareholding in Manor Park
Homebuilders, which has commenced sales at its principal housing development
at Ongar, west Dublin. Manor Park has other ongoing developments in Dublin,
Cork and Drogheda and has a substantial land bank for future development.
DCC plc
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2001 2000 2001
Notes EUR '000 EUR '000 EUR '000
Turnover 2 925,604 822,571 1,870,141
Operating profit 3 39,187 34,251 91,737
Net interest payable (1,972) (2,129) (4,402)
Profit on ordinary activities 37,215 32,122 87,335
before net exceptional gains,
goodwill amortisation and taxation
Net exceptional gains 4 18 - -
Goodwill amortisation (2,533) (2,352) (4,923)
Profit on ordinary activities 3 34,700 29,770 82,412
before taxation
Taxation (5,210) (4,818) (13,100)
Profit after taxation 29,490 24,952 69,312
Minority interests (497) (659) (1,230)
Profit attributable to Group 28,993 24,293 68,082
shareholders
Dividends 5 (7,750) (6,691) (18,140)
Profit retained for the period 21,243 17,602 49,942
Earnings per ordinary share
- basic (cent) 6 33.89c 27.96c 78.98c
- fully diluted (cent) 6 33.66c 27.33c 78.28c
Adjusted earnings per ordinary
share
- basic (cent) 6 36.83c 30.67c 84.69c
- fully diluted (cent) 6 36.57c 29.97c 83.94c
Dividend per ordinary share 5 9.288c 7.740c 21.120c
(cent)
DCC plc
CONSOLIDATED BALANCE SHEET
Unaudited Unaudited Audited
30 Sept. 30 Sept. 31 March
2001 2000 2001
Note EUR '000 EUR '000 EUR '000
Fixed Assets
Intangible assets - goodwill 96,978 83,957 84,447
Tangible fixed assets 144,059 129,353 135,241
Financial assets - associated 33,340 36,103 38,458
undertakings
274,377 249,413 258,146
Current Assets
Stocks 117,987 96,770 93,063
Debtors 304,568 274,289 296,804
Cash and term deposits 392,382 367,223 454,582
814,937 738,282 844,449
Creditors: Amounts falling due within
one year
Bank and other debt 218,416 155,341 200,621
Amount due in respect of buy 21,044 - -
back of shares
Trade and other creditors 318,722 265,045 328,328
Corporation tax 14,361 15,637 18,959
Proposed dividend 7,750 6,619 11,449
580,293 442,642 559,357
Net Current Assets 234,644 295,640 285,092
Total Assets less Current 509,021 545,053 543,238
Liabilities
FINANCED BY:
Creditors: Amounts falling due after
more than one year
Bank and other debt 32,519 89,482 65,753
Unsecured Notes due 2008/11 104,502 108,933 104,977
Deferred acquisition consideration 10,144 15,814 11,464
147,165 214,229 182,194
Provisions for Liabilities and Charges 1,799 2,060 1,801
148,964 216,289 183,995
Capital and Reserves
Equity share capital and share premium 146,481 145,759 146,484
Reserves 208,938 178,634 208,202
Equity Shareholders' Funds 355,419 324,393 354,686
Minority interests 3,662 3,541 3,493
Capital grants 976 830 1,064
360,057 328,764 359,243
509,021 545,053 543,238
Net cash 7 36,945 13,467 83,231
DCC plc
RECONCILIATION OF MOVEMENTS IN EQUITY SHAREHOLDERS' FUNDS
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2001 2000 2001
EUR '000 EUR '000 EUR '000
Profit attributable to Group 28,993 24,293 68,082
shareholders
Dividends (7,750) (6,691) (18,140)
Profit retained for the period 21,243 17,602 49,942
Acquisition of own shares (21,307) (24,668) (24,668)
(inclusive of costs)
Issues of equity share capital 1,246 1,945 2,670
net of capital duty
Movement on other reserves of (30) 38 (25)
associated undertakings
Exchange adjustments (419) 353 (2,356)
Net movement in shareholders' funds 733 (4,730) 25,563
Opening shareholders' funds 354,686 329,123 329,123
Closing shareholders' funds 355,419 324,393 354,686
DCC plc
CASH FLOW
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2001 2000 2001
Note EUR '000 EUR '000 EUR '000
Inflows
Operating cash flow (see below) (2,683) (13,898) 83,369
Disposal proceeds 8,259 16,026 16,026
Share issues (net) - 1,945 1,930
5,576 4,073 101,325
Outflows
Capital expenditure (net) 14,687 13,116 29,506
Acquisitions 16,895 23,299 25,969
Acquisition of own shares - 24,668 24,668
Interest paid 582 2,826 2,587
Taxation paid 8,294 5,765 9,073
Dividends paid 11,449 9,807 16,426
51,907 79,481 108,229
Net cash outflow (46,331) (75,408) (6,904)
Translation adjustment 45 (284) 976
Movement in net cash for the period (46,286) (75,692) (5,928)
Opening net cash 83,231 89,159 89,159
Closing net cash 7 36,945 13,467 83,231
OPERATING CASH FLOW
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2001 2000 2001
EUR '000 EUR '000 EUR '000
Group operating profit 39,187 34,251 91,737
Operating profit of associated (4,383) (3,672) (8,950)
undertakings
Dividends received from 796 917 1,896
associated undertakings
Depreciation of tangible fixed 11,012 9,808 20,766
assets
Increase in working capital (48,388) (54,593) (19,929)
Other (907) (609) (2,151)
Operating cash flow (2,683) (13,898) 83,369
DCC plc
Notes to the Interim Results for the Six Months ended 30 September 2001
1. Basis of Preparation
The interim financial statements for the six months ended 30 September 2001
have been prepared in accordance with the accounting policies set out in the
financial statements for the year ended 31 March 2001.
The interim financial statements for the six months ended 30 September 2001
and the comparative figures for the six months ended 30 September 2000 are
unaudited. The summary financial statements for the year ended 31 March 2001
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.
The Group's financial statements are prepared in euro denoted by the symbol
EUR. The exchange rates used in translating sterling balance sheet and profit
and loss amounts were as follows:
6 months 6 months Year
ended ended ended
30 Sept. 30 Sept. 31 March
2001 2000 2001
EUR 1=Stg£ EUR 1=Stg£ EUR 1=Stg£
Balance sheet (closing rate) 0.622 0.597 0.619
Profit and loss (average rate) 0.614 0.610 0.613
2. Turnover
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2001 2000 2001
EUR '000 EUR '000 EUR '000
IT 363,714 327,855 753,887
Energy 295,628 254,327 610,257
Healthcare 100,808 97,819 182,657
Other Activities 165,454 142,570 323,340
925,604 822,571 1,870,141
Analysis of turnover by
subsidiary undertakings and
associated undertakings:
Subsidiary undertakings 842,405 750,006 1,712,402
Associated undertakings 83,199 72,565 157,739
925,604 822,571 1,870,141
Of which acquisitions 35,709 13,113 69,208
contributed
3. Profit before Taxation
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2001 2000 2001
EUR '000 EUR '000 EUR '000
IT 13,176 11,645 31,203
Energy 8,169 5,660 23,617
Healthcare 10,643 9,818 20,313
Other Activities 7,199 7,128 16,604
Group operating profit * 39,187 34,251 91,737
Net interest payable (1,972) (2,129) (4,402)
Profit on ordinary activities 37,215 32,122 87,335
before net exceptional gains,
goodwill amortisation and taxation
Net exceptional gains 18 - -
Goodwill amortisation (2,533) (2,352) (4,923)
Profit before taxation 34,700 29,770 82,412
Analysis of operating profit
by subsidiary undertakings and
associated undertakings:
Subsidiary undertakings 34,804 30,579 82,787
Associated undertakings 4,383 3,672 8,950
Operating profit 39,187 34,251 91,737
*Of which acquisitions contributed 395 (179) 1,078
4. Net Exceptional Gains
Net exceptional gains comprise mainly the profit on disposal of an associated
undertaking less the Group's share of the reorganisation costs of an
associated undertaking.
5. Dividends
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2001 2000 2001
EUR '000 EUR '000 EUR '000
Interim dividend of 9.288 cent per 7,750 6,619 6,619
share (2000: 7.740 cent per share)
Proposed final dividend of - - 11,449
13.380 cent per share
Additional final dividend - 72 72
7,750 6,691 18,140
The additional final dividend of EUR 72,000 for the six months ended 30
September 2000 and the year ended 31 March 2001 is in respect of shares issued
after the date of approval of the accounts for the year ended 31 March 2000
but qualifying for receipt of the final dividend declared in respect of that
year.
6. Earnings per Ordinary Share and Adjusted Earnings per Ordinary Share
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2001 2000 2001
EUR '000 EUR '000 EUR '000
Profit after taxation and minority 28,993 24,293 68,082
interests
Net exceptional gains (18) - -
Goodwill amortisation 2,533 2,352 4,923
Adjusted profit after taxation and 31,508 26,645 73,005
minority interests
Basic earnings per ordinary share cent cent cent
Basic earnings per ordinary share 33.89 27.96 78.98
Adjusted basic earnings per 36.83 30.67 84.69
ordinary share*
Weighted average number of 85,549 86,890 86,202
ordinary shares in issue
during the period ('000)
Fully diluted earnings per ordinary share
Fully diluted earnings per ordinary share 33.66 27.33 78.28
Adjusted fully diluted earnings 36.57 29.97 83.94
per ordinary share*
Fully diluted weighted average 86,147 89,276 87,030
number of ordinary shares ('000)
*adjusted to exclude goodwill amortisation and net exceptional gains.
7. Analysis of Net Cash
Unaudited Unaudited Audited
30 Sept. 30 Sept. 31 March
2001 2000 2001
EUR '000 EUR '000 EUR '000
Cash and term deposits 392,382 367,223 454,582
Bank and other debt repayable (218,416) (155,341) (200,621)
within one year
Bank and other debt repayable (32,519) (89,482) (65,753)
after more than one year
Unsecured Notes due 2008/11 (104,502) (108,933) (104,977)
Net cash 36,945 13,467 83,231
8. Distribution of Interim Report
This announcement and further information on DCC is available at the Company's
website at www.dcc.ie. A printed copy of this report is being posted to
shareholders and will be available to the public at the Company's registered
office at DCC House, Stillorgan, Blackrock, Co. Dublin.
Latest directors dealings
- 1 day ago Banco Santander S.A.
- 1 day ago Banco Santander S.A.
- 1 day ago Banco Santander S.A.
- 1 day ago Banco Santander S.A.
- 1 day ago Georgia Capital