Interim Results

RNS Number : 7695H

DCC PLC

10 November 2008

Interim Results for the Six Months ended 30 September 2008

RESULTS HIGHLIGHTS

		Change on prior year
	€	Reported	Constant Currency†
Revenue	3,178.3m	+40.7%	+58.5%
Operating profit*	60.6m	+17.4%	+30.3%
Profit before exceptional items, amortisation of intangible assets and tax	50.5m	+13.6%	+27.1%
Adjusted earnings per share*	54.84 cent	+13.0%	+26.5%
Dividend per share	22.61 cent	+10.0%
Operating cashflow	110.7m	+22.6%
Net debt at 30 September 2008	193.2m
† all constant currency figures quoted in this report are based on retranslating current year figures at prior year translation rates * excluding exceptional items and amortisation of intangible assets

DCC, the business support services group, today announced its results for the six months ended 30 September 2008.

Commenting on the results, Tommy Breen, Chief Executive said:

'DCC achieved excellent profit growth in the first half, again demonstrating the resilience of its business model. Group operating profit grew by 17.4% (30.3% on a constant currency basis) while adjusted earnings per share increased by 13.0% (26.5% on a constant currency basis).

This growth was driven by particularly strong results in DCC's largest division, DCC Energy, and by strong performances in DCC SerCom and DCC Environmental. DCC Healthcare and DCC Food & Beverage achieved more modest constant currency profit growth.

DCC has had an encouraging start to its seasonally more significant second half. The Group is, however, operating in an increasingly challenging and unpredictable economic environment which has impacted, and will continue to impact, the business. Nevertheless, the Group's diversified business model provides defensive qualities and DCC continues to anticipate that it will achieve approximately 10% growth in earnings on a constant currency basis in the year to 31 March 2009. The impact of the translation into Euro of the significant proportion of Group profits that are Sterling denominated, at the current exchange rate, would result in reported earnings being in line with those reported last year.

DCC has a strong balance sheet and a favourable funding and liquidity position. The Group remains ambitious to grow its business through organic development, as well as by acquisition, and is well placed both commercially and financially to take advantage of opportunities arising in these more challenging times.'

For reference, please contact:

Tommy Breen, Chief Executive Tel: +353 1 2799 400

Fergal O'Dwyer, Chief Financial Officer Email: investorrelations@dcc.ie

Conor Murphy, Investor Relations Manager www.dcc.ie

Interim Management Report

Results

A summary of the results for the six months to 30 September 2008 is as follows:

		Change on prior year
	€'m	Reported	Constant Currency†

Revenue	3,178.3	+40.7%	+58.5%

Operating profit*
DCC Energy	22.8	+56.5%	+82.3%
DCC SerCom	13.5	+8.3%	+17.1%
DCC Healthcare	9.8	-5.2%	+2.1%
DCC Environmental	7.3	+0.6%	+12.8%
DCC Food & Beverage	7.2	+3.6%	+5.6%

Group operating profit*	60.6	+17.4%	+30.3%
Share of associates' profit after tax	0.1
Finance costs (net)	(10.2)
Profit before exceptional items, amortisation of intangible assets and tax	50.5	+13.6%	+27.1%
Exceptional profit (net) Amortisation of intangible assets Profit before tax Taxation Profit after tax Adjusted EPS* (cent)	1.2 (3.2) 48.5 (5.0) 43.5 54.84	+13.0%	+26.5%
Dividend per share (cent)	22.61	+10.0%
† all constant currency figures quoted in this report are based on retranslating current year figures at prior year translation rates * excluding exceptional items and amortisation of intangible assets

Excellent operating profit growth

Operating profit grew by 30.3% on a constant currency basis in the six months to 30 September 2008 driven by strong organic growth of approximately 23%. DCC Energy, DCC's largest division, achieved particularly strong operating profit growth as a result of the synergies achieved from acquisitions completed in recent years and the much colder weather conditions in April 2008 (seasonally DCC Energy's most important trading month in the first half) compared to the same month last year. DCC SerCom and DCC Environmental performed strongly, while DCC Healthcare and DCC Food & Beverage achieved more modest constant currency profit growth.

Finance costs (net)

Net finance costs for the period increased to €10.2 million (2007: €7.4 million) primarily as a result of higher interest rates. The Group's net debt level averaged €238 million during the period compared to €227 million during the six months to 30 September 2007.

Exceptional profit (net)

The sale of a small associate company gave rise to an exceptional profit of €5.0 million, which was partly offset by exceptional charges of €3.8 million relating to restructuring and cost reduction programmes. This resulted in a net exceptional profit of €1.2 million for the period.

Excellent growth in adjusted earnings per share

Adjusted earnings per share increased by 13.0% (26.5% on a constant currency basis).

Interim dividend increase of 10.0%

The Board has decided to increase the interim dividend by 10.0% to 22.61 cent per share. This dividend will be paid on 5 December 2008 to shareholders on the register at the close of business on 21 November 2008.

Acquisitions and Development

Acquisition and development expenditure, net of a reduction in working capital in the period, amounted to €69.6 million, as follows:

	Acquisitions	Capex	Working Capital	Total
	€'m	€'m	€'m	€'m
DCC Energy	42.3	16.3	(45.6)	13.0
DCC SerCom	3.0	1.6	8.8	13.4
DCC Healthcare	5.7	3.7	9.2	18.6
DCC Environmental	4.0	7.0	(3.0)	8.0
DCC Food & Beverage	13.0	2.1	1.5	16.6
Total	68.0	30.7	(29.1)	69.6

DCC Energy significantly increased the scale of its Oil distribution business in Britain through the acquisition of Chevron's UK oil distributor business (announced on 15 August 2008).

DCC Food & Beverage acquired a leading Irish wine distribution company, FindlaterGrants (announced on 15 September 2008).

Capital expenditure was €30.7 million, which compares to a depreciation charge of €22.5 million.

The net decrease in working capital of €29.1 million was primarily driven by a reduction in working capital days in DCC Energy.

Financial Strength

Operating cash flow in the period of €110.7 million was 22.6% ahead of the prior year. This was helped by the reduction of €29.1 million in net working capital since 31 March 2008 to €274.1 million, which equates to 14 days revenue and compares favourably with 16 days at 31 March 2008.

DCC's financial position remains very strong. At 30 September 2008 the Group had net debt of €193.2 million and total equity of €760.6 million. At a time of increased focus on funding and liquidity, DCC has significant cash resources and relatively long term debt maturities. Almost 90% of debt has been raised from the US Private Placement market and on 1 October 2008 DCC raised a further €86 million from this market, mainly to refinance a scheduled repayment of existing US Private Placement debt on that date. Adjusting for these transactions, the Group's funding and liquidity position at 30 September 2008 can be summarised as follows:

	€’m	€’m

Cash and short term bank deposits		419.6
Overdrafts		(88.9)
Cash and cash equivalents		330.7

Bank debt repayable within 1 year		(63.8)
US Private Placement debt repayable:
Y/e 31/3/2012	(6.3)
Y/e 31/3/2014	(70.4)
Y/e 31/3/2015	(169.2)
Y/e 31/3/2016	(16.2)
Y/e 31/3/2017	(36.8)
Y/e 31/3/2018	(58.7)
Y/e 31/3/2020	(99.7)	(457.3)
Other debt		(2.8)

Net debt		(193.2)

The strength of DCC's balance sheet leaves it well placed to take advantage of acquisition and development opportunities arising in these more challenging times.

Strategy Review

As previously announced, a reappraisal of the Group's overall strategic direction is underway. It is relevant to strategic considerations that the global financial and economic background has deteriorated dramatically since the strategy review was announced and forward visibility is a challenge. However, the central objective of the process remains - to ensure that DCC continues to pursue a strategy which maximises shareholder value on a consistent basis over the longer term. Good progress has been made to date. The intention is to complete the reappraisal by the end of the financial year and report on the conclusions no later than the date of the announcement of the full year results in May 2009.

Outlook

DCC has had an encouraging start to its seasonally more significant second half. The Group is, however, operating in an increasingly challenging and unpredictable economic environment, which has impacted, and will continue to impact, the business. Nevertheless, the Group's diversified business model provides defensive qualities and DCC continues to anticipate that it will achieve approximately 10% growth in earnings on a constant currency basis in the year to 31 March 2009. The impact of the translation into Euro of the significant proportion of Group profits that are Sterling denominated, at the current exchange rate, would result in reported earnings being in line with those reported last year.

Operating review

DCC Energy			Change on prior year
	2008	2007	Reported	Constant Currency
Revenue	€2,095.8m	€1,343.5m	+56.0%	+79.5%
Operating profit	€22.8m	€14.5m	+56.5%	+82.3%

DCC Energy achieved operating profit growth of 82.3% on a constant currency basis in the first half. This growth was driven by integration synergies arising from acquisitions completed in recent years and the much colder weather conditions in April 2008 (seasonally DCC Energy's most important trading month in the first half) compared to the same month last year.

DCC Energy's Oil distribution business achieved significant operating profit growth, driven by the performance of its business in Britain which benefited from the depot rationalisation programme and operational efficiencies which arose from the integration of acquisitions completed in recent years. The business is benefiting from its extensive nationwide infrastructure and from its particular focus on growing in the non-heating segments of the market. The scale of the business was increased further through the acquisition of Chevron's UK oil distributor business, which was completed on 1 September 2008. DCC Energy is the clear market leader in oil distribution in Britain with a market share of approximately 12%. The Irish oil distribution business was impacted by the general economic slowdown.

The LPG distribution business in Britain and Ireland generated good sales volume growth but operating profit was modestly impacted by the significant rise in the price of propane during the first quarter.

DCC's Fuel Card business continued to achieve excellent volume and operating profit growth.

There is significant momentum within DCC Energy, particularly in oil distribution in Britain, which leaves the business well placed to achieve excellent constant currency operating profit growth for the full year.

DCC SerCom			Change on prior year
	2008	2007	Reported	Constant Currency
Revenue	€694.3m	€575.6m	+20.6%	+30.3%
Operating profit	€13.5m	€12.5m	+8.3%	+17.1%
Operating margin	1.9%	2.2%

DCC SerCom achieved constant currency operating profit growth of 17.1% in the first half, driven by strong organic growth in SerCom Distribution and acquisitions completed in the second half of the prior year.

SerCom Distribution’s Retail business performed strongly, reflecting the acquisition of Banque Magnetique in November 2007 and a good performance in Britain, which benefited from the continued strength of the games market and a particular focus on the growing e-tail and catalogue retail channels. The business in Britain also enjoyed continued success in developing its own brand accessory products. Market conditions in Ireland deteriorated during the first half, impacting the DVD and audio-visual segments of the business. Although consumer demand has weakened in France, Banque Magnetique performed satisfactorily.

The Reseller business performed in line with the prior year.The business in Britain performed strongly, benefiting from market share gains, while the Irish business experienced a marked deterioration in demand.

The Enterprise business performed well as a result of its focus on sales growth in the software sector.

As anticipated in the preliminary results announcement in May 2008, SerCom Solutions suffered a decline in profits due to a change in strategy by a major customer.

Trading in the current quarter to the end of December is critical to the full year result for DCC SerCom. Although October trading in DCC SerCom has been strong, with operating profit well ahead of the prior year on a constant currency basis, the business is operating in an economic environment which has deteriorated in recent months. Against this background, DCC SerCom continues to anticipate modest constant currency operating profit growth for the full year.

DCC Healthcare			Change on prior year
	2008	2007	Reported	Constant Currency
Revenue	€172.7m	€132.3m	+30.6%	+43.9%
Operating profit	€9.8m	€10.4m	-5.2%	+2.1%
Operating margin	5.7%	7.8%

DCC Healthcare's operating profit growth of 2.1% on a constant currency basis in the first half reflects a reduction in profits in Acute Care, which was offset by increased profits in Health & Beauty and Mobility & Rehabilitation.

In Acute Care, the trading environment for Fannin has been challenging as a result of increased competition in the sales and marketing of intravenous pharmaceuticals and due to public healthcare spending constraints in Ireland. The recent acquisitions in Britain, Squadron Medical (acquired in November 2007) and TPS Healthcare (acquired in April 2008), were important contributors to DCC Healthcare's strong revenue growth in the first half and have changed the margin mix within the division. These businesses are focused on the provision of value added distribution services to British acute care hospitals and leading healthcare brand owners.

Profit growth in DCC Health & Beauty Solutions was driven by strong growth in sales to its larger branded, mail order and specialist retailer customers in the nutraceutical and beauty products sectors. The business also benefited from capacity expansion at each of its three licensed facilities in Britain and related investment in business and product development resources.

DCC Mobility & Rehab achieved good growth in Britain, particularly in physiotherapy supplies, where it is the market leader.

Due to the continuing challenging trading environment within Acute Care, DCC Healthcare expects full year operating profit to be broadly in line with the prior year on a constant currency basis.

DCC Environmental			Change on prior year
	2008	2007	Reported	Constant Currency
Revenue	€47.3m	€45.8m	+3.1%	+14.9%
Operating profit	€7.3m	€7.2m	+0.6%	+12.8%
Operating margin	15.4%	15.8%

DCC Environmental achieved constant currency operating profit growth of 12.8% in the first half, driven primarily by strong organic growth.

In Britain, DCC Environmental achieved good operating profit growth despite reduced volumes of waste from the construction sector. DCC Environmental remains well placed to take advantage of the trend towards increasing levels of recycling in Britain.

In Ireland, Enva achieved excellent operating profit growth reflecting strong demand for its broad range of hazardous waste treatment services. The recent publication by the Irish Environmental Protection Agency of the National Hazardous Waste Management Plan 2008-2011 and, in particular, its emphasis on increasing Ireland's self-sufficiency in hazardous waste management is a positive development.

Although DCC Environmental's business is broadly based, it will be impacted by continued reduced activity levels in the construction sector and by lower income from the sale of recycled materials due to recent declines in commodity prices. DCC Environmental expects full year operating profit to be broadly in line with the prior year on a constant currency basis.

DCC Food & Beverage			Change on prior year
	2008	2007	Reported	Constant Currency
Revenue	€168.2m	€161.5m	+4.2%	+8.3%
Operating profit	€7.2m	€7.0m	+3.6%	+5.6%
Operating margin	4.3%	4.3%

DCC Food & Beverage achieved operating profit growth of 5.6% on a constant currency basis, all of which was organic, although it has been increasingly impacted by weaker consumer spending in Ireland in recent months.

There was modest revenue growth in Healthfoods, while in the Indulgence business sales of snackfoods, retail beverages and soft drinks were weak. The Frozen and Chilled Logistics business performed satisfactorily.

DCC strengthened its position in the wine business in Ireland through the acquisition, in September 2008, of FindlaterGrants, a leading wine and spirits distribution business, and its integration with DCC's existing wine business in Ireland is ongoing.

DCC Food & Beverage anticipates a further deterioration in the trading environment in the second half due to the ongoing slowdown in demand, the impact of consumers altering their buying patterns and the response of retailers to these changes. Consequently a decline in constant currency operating profits is anticipated for the full year.

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.

Principal Risks and Uncertainties

Under the Transparency (Directive 2004/109/EC) Regulations 2007 the Group is required to give a description of the principal risks and uncertainties it faces.

As detailed on page 42 of the Annual Report for the year ended 31 March 2008, the principal risks and uncertainties faced by the Group's businesses relate to the economic environment in Ireland, Britain and Continental Europe. The level of activity in these markets is sensitive to economic conditions generally, including, inter alia, economic growth, interest rates, foreign currency exchange rates and inflation. The key risks and uncertainties faced by the Group for the remaining six months of the financial year arise from the general weakening of economies in which the Group operates.

Presentation of results and dial-in facility

There will be a presentation of these results to analysts and investors/fund managers in Dublin at 8:45 am today. The slides for this presentation can be downloaded from DCC's website, www.dcc.ie. A dial-in facility will be available for this meeting:

Ireland: +353 1242 1074

International: +44 20 8974 7940

Passcode: 435 468

This announcement and further information on DCC is available at www.dcc.ie

Group Condensed Income Statement

for the six months ended 30 September 2008


		Unaudited 6 months ended			Unaudited 6 months ended			Audited year ended
		30 September 2008			30 September 2007			31 March 2008
		Pre exceptionals	Exceptionals (note 5)	Total	Pre exceptionals	Exceptionals	Total	Pre exceptionals	Exceptionals	Total
	Notes	€’000	€’000	€’000	€’000	€’000	€’000	€’000	€’000	€’000

Revenue	4	3,178,330	-	3,178,330	2,258,736	-	2,258,736	5,531,962	-	5,531,962

Cost of sales		(2,877,456)	-	(2,877,456)	(1,985,788)	-	(1,985,788)	(4,940,247)	-	(4,940,247)
Gross profit		300,874	-	300,874	272,948	-	272,948	591,715	-	591,715

Administration expenses		(122,184)	-	(122,184)	(107,472)	-	(107,472)	(205,118)	-	(205,118)
Selling and distribution expenses		(120,089)	-	(120,089)	(116,430)	-	(116,430)	(230,470)	-	(230,470)
Other operating income		5,427	4,945	10,372	4,314	-	4,314	14,564	94,763	109,327
Other operating expenses		(3,424)	(3,775)	(7,199)	(1,740)	(55,726)	(57,466)	(3,511)	(55,158)	(58,669)

Operating profit/(loss) before amortisation of intangible assets		60,604	1,170	61,774	51,620	(55,726)	(4,106)	167,180	39,605	206,785

Amortisation of intangible assets		(3,245)	-	(3,245)	(3,608)	-	(3,608)	(7,928)	-	(7,928)

Operating profit/(loss)	4	57,359	1,170	58,529	48,012	(55,726)	(7,714)	159,252	39,605	198,857

Finance costs		(21,519)	-	(21,519)	(18,356)	-	(18,356)	(44,912)	-	(44,912)
Finance income		11,328	-	11,328	10,906	-	10,906	27,120	-	27,120
Share of associates’ profit after tax		127	-	127	305	-	305	639	-	639

Profit/(loss) before tax		47,295	1,170	48,465	40,867	(55,726)	(14,859)	142,099	39,605	181,704

Income tax expense		(4,918)	-	(4,918)	(4,026)	-	(4,026)	(14,774)	(1,756)	(16,530)
Profit/(loss) after tax for the financial period		42,377	1,170	43,547	36,841	(55,726)	(18,885)	127,325	37,849	165,174

Profit/(loss) attributable to:
Equity holders of the Company				43,161			(19,470)			164,491
Minority interest				386			585			683
Profit/(loss) after tax for the financial period				43,547			(18,885)			165,174

Earnings/(loss) per ordinary share
Basic	6			53.06c			(24.21c)			204.28c
Diluted	6			52.49c			(23.68c)			200.31c

Adjusted earnings per ordinary share
Basic	6			54.84c			48.52c			165.06c
Diluted	6			54.25c			47.48c			161.85c

Group Condensed Statement of Recognised Income and Expense

for the six months ended 30 September 2008

	Unaudited	Unaudited	Audited
	6 months	6 months	year
	ended	ended	ended
	30 Sept.	30 Sept.	31 March
	2008	2007	2008
	€’000	€’000	€’000

Items of income and expense recognised directly within equity:
Currency translation	(994)	(7,526)	(64,310)
Group defined benefit pension obligations:
- actuarial loss	(4,071)	(2,757)	(9,086)
- movement in deferred tax asset	589	347	1,200
(Losses)/gains relating to cash flow hedges (net)	(356)	211	385
Deferred tax recognised through equity	40	(13)	(21)
Net expense recognised directly within equity	(4,792)	(9,738)	(71,832)

Profit/(loss) after tax for the period	43,547	(18,885)	165,174

Total recognised income and expense for the period	38,755	(28,623)	93,342

Attributable to:
Equity holders of the Company	38,369	(29,208)	92,659
Minority interest	386	585	683

Total recognised income and expense for the period	38,755	(28,623)	93,342

Group Condensed Balance Sheet

as at 30 September 2008


		Unaudited	Unaudited	Audited
		30 Sept.	30 Sept.	31 March
		2008	2007	2008
	Notes	€'000	€'000	€'000
ASSETS
Non-current assets
Property, plant and equipment		352,820	331,567	337,058
Intangible assets		459,637	395,651	416,883
Investments in associates		2,611	5,131	4,678
Deferred income tax assets		9,567	5,922	10,199
Derivative financial instruments		31,942	4,685	25,347
		856,577	742,956	794,165

Current assets
Inventories		246,999	180,943	219,752
Trade and other receivables		898,480	676,720	807,433
Derivative financial instruments		438	303	1,523
Cash and cash equivalents		408,332	524,622	485,840
		1,554,249	1,382,588	1,514,548
Assets held for sale		-	85,506	-

Total assets		2,410,826	2,211,050	2,308,713


EQUITY
Capital and reserves attributable to equity holders of the Company
Equity share capital		22,057	22,057	22,057
Share premium account		124,687	124,687	124,687
Other reserves - share options		7,597	5,634	6,651
Cash flow hedge reserve		(94)	68	222
Foreign currency translation reserve		(68,218)	(10,440)	(67,224)
Other reserves		1,400	1,400	1,400
Retained earnings		669,733	486,149	650,871
		757,162	629,555	738,664
Minority interest		3,442	3,646	3,771
Total equity	8	760,604	633,201	742,435

LIABILITIES
Non-current liabilities
Borrowings		375,737	438,675	358,119
Derivative financial instruments		28,766	55,213	43,558
Deferred income tax liabilities		11,058	14,244	11,706
Retirement benefit obligations	10	24,811	17,847	21,851
Provisions for liabilities and charges		5,262	5,929	5,399
Deferred acquisition consideration		13,531	14,072	16,155
Government grants		1,849	2,206	1,941
Total non-current liabilities		461,014	548,186	458,729

Current liabilities
Trade and other payables		885,947	749,665	796,902
Current income tax liabilities		54,799	55,823	53,895
Borrowings		217,242	209,357	217,546
Derivative financial instruments		12,216	350	17,206
Provisions for liabilities and charges		8,133	5,160	7,964
Deferred acquisition consideration		10,871	9,308	14,036
Total current liabilities		1,189,208	1,029,663	1,107,549

Total liabilities		1,650,222	1,577,849	1,566,278

Total equity and liabilities		2,410,826	2,211,050	2,308,713

Net debt	9	(193,249)	(173,985)	(123,719)

Group Condensed Cash Flow Statement

for the six months ended 30 September 2008


		Unaudited	Unaudited	Audited
		6 months	6 months	year
		ended	ended	ended
		30 Sept.	30 Sept.	31 March
		2008	2007	2008
	Note	€'000	€'000	€'000

Cash generated from operations	12	110,702	90,305	129,043
Exceptionals		(48,614)	(5,307)	(4,168)
Interest paid		(19,788)	(13,906)	(38,541)
Income tax paid		(4,772)	(2,641)	(21,902)
Net cash flows from operating activities		37,528	68,451	64,432

Cash flows from investing activities
Inflows
Dividends received from associates		-	-	172,000
Proceeds from disposal of property, plant and equipment		865	1,043	7,781
Government grants received		-	-	92
Proceeds on disposal of associate		8,481	-	8,880
Interest received		11,404	8,712	23,560
		20,750	9,755	212,313
Outflows
Purchase of property, plant and equipment		(30,684)	(33,237)	(87,526)
Acquisition of subsidiaries		(63,395)	(82,628)	(166,584)
Purchase of minority interests		-	(30)	-
Deferred acquisition consideration paid		(11,685)	(9,342)	(9,987)
		(105,764)	(125,237)	(264,097)
Net cash flows from investing activities		(85,014)	(115,482)	(51,784)

Cash flows from financing activities
Inflows
Re-issue of treasury shares		8,556	1,280	4,060
Increase in finance lease liabilities		-	266	873
Increase in interest-bearing loans and borrowings		-	190,380	202,049
		8,556	191,926	206,982
Outflows
Repayment of interest-bearing loans and borrowings		(6,387)	(30,549)	(43,490)
Repayment of finance lease liabilities		(521)	(664)	(6,523)
Dividends paid to equity holders of the Company		(29,373)	(25,258)	(41,813)
Dividends paid to minority interests		(735)	(2,725)	(2,725)
		(37,016)	(59,196)	(94,551)
Net cash flows from financing activities		(28,460)	132,730	112,431

Change in cash and cash equivalents		(75,946)	85,699	125,079
Translation adjustment		(718)	(9,294)	(39,220)
Cash and cash equivalents at beginning of period		396,046	310,187	310,187
Cash and cash equivalents at end of period		319,382	386,592	396,046

Cash and cash equivalents consists of:
Cash and short term bank deposits		408,332	524,622	485,840
Overdrafts		(88,950)	(138,030)	(89,794)
		319,382	386,592	396,046

Notes to the Group Condensed Interim Financial Statements

for the six months ended 30 September 2008

1. Basis of Preparation

The Group Condensed Financial Statements which should be read in conjunction with the annual financial statements for the year ended 31 March 2008 have been prepared in accordance with the Transparency (Directive 2004/109/EC) Regulations 2007, the related Transparency rules of the Irish Financial Services Regulatory Authority and in accordance with International Accounting Standard 34, Interim Financial Reporting (IAS 34) as adopted by the EU.

These condensed financial statements for the six months ended 30 September 2008 and the comparative figures for the six months ended 30 September 2007 are unaudited. The summary financial statements for the year ended 31 March 2008 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 Financial Statements are consistent with those applied in the Annual Report for the financial year ended 31 March 2008 and are described in those financial statements on pages 63 to 71.

The following Interpretations are mandatory for the first time for the financial year beginning 1 April 2008 and are either not relevant to the Group or they do not have a significant impact on the condensed interim Group financial statements:

IFRIC Interpretation 12, Service Concession Arrangements; and
IFRIC Interpretation 14, The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction

3. Reporting Currency

The Group's financial statements are prepared in euro denoted by the symbol €. The exchange rates used in translating sterling Balance Sheets and Income Statement amounts were as follows:

	6 months ended	6 months ended	Year ended
	30 Sept. 2008	30 Sept. 2007	31 March 2008
	€1=Stg£	€1=Stg£	€1=Stg£

Balance Sheet (closing rate)	0.796	0.698	0.795
Income Statement (average rate)	0.793	0.678	0.702

4. Segmental Reporting

For management purposes, the Group is primarily organised into five main business segments: DCC Energy, DCC SerCom, DCC Healthcare, DCC Environmental and DCC Food & Beverage.

(a) By business segment


	Unaudited six months ended 30 September 2008

DCC DCC DCC DCC DCC Food

Energy SerCom Healthcare Environmental & Beverage Unallocated Total

	€'000		€'000	€'000	€'000	€'000	€'000	€'000

Segment revenue	2,095,809		694,256	172,743	47,274	168,248	-	3,178,330

Operating profit*	22,736		13,523	9,823	7,288	7,234	-	60,604
Amortisation of intangible assets	(1,231)		(828)	(458)	(376)	(352)	-	(3,245)
Net operating exceptionals	(3,283)		(335)	(157)	-	-	4,945	1,170
Operating profit	18,222		12,360	9,208	6,912	6,882	4,945	58,529

		Unaudited six months ended 30 September 2007

DCC DCC DCC DCC DCC Food

Energy SerCom Healthcare Environmental & Beverage Unallocated Total

	€'000		€'000	€'000	€'000	€'000	€'000	€'000

Segment revenue	1,343,461		575,609	132,270	45,853	161,543	-	2,258,736

Operating profit*	14,528		12,492	10,367	7,248	6,985	-	51,620
Amortisation of intangible assets	(844)		(1,069)	(882)	(308)	(505)	-	(3,608)
Net operating exceptionals	(4,549)		(200)	(18)	-	-	(50,959)	(55,726)
Operating profit/(loss)	9,135		11,223	9,467	6,940	6,480	(50,959)	(7,714)

		Audited year ended 31 March 2008

DCC DCC DCC DCC DCC Food

Energy SerCom Healthcare Environmental & Beverage Unallocated Total

	€'000	€'000	€'000	€'000	€'000	€'000	€'000

Segment revenue	3,420,026	1,423,357	286,782	91,678	310,119	-	5,531,962

Operating profit*	74,339	40,062	23,440	14,038	15,301	-	167,180
Amortisation of intangible assets	(2,389)	(2,216)	(1,586)	(751)	(986)	-	(7,928)
Net operating exceptionals	(4,807)	(1,260)	(665)	(1,392)	3,538	44,191	39,605
Operating profit	67,143	36,586	21,189	11,895	17,853	44,191	198,857
* Operating profit before amortisation of intangible assets and net operating exceptionals

4. Segmental Reporting - continued

(b) By geography

Unaudited six months ended 30 September 2008

Republic of Rest of

Ireland UK the World Total

€’000 €’000 €’000 €’000

€’000

Segment revenue

532,492

2,395,188

250,650

3,178,330

Operating profit*

20,225

35,115

5,264

60,604

Amortisation of intangible assets

(1,164)

(1,990)

(91)

(3,245)

Net operating exceptionals

(597)

(3,145)

4,912

1,170

Operating profit

18,464

29,980

10,085

58,529

Unaudited six months ended 30 September 2007

Republic of Rest of

Ireland UK the World Total

	€’000	€’000	€’000	€’000

Segment revenue	526,040	1,611,534	121,162	2,258,736

Operating profit*	24,233	24,438	2,949	51,620
Amortisation of intangible assets	(1,258)	(2,213)	(137)	(3,608)
Net operating exceptionals	(50,977)	(4,549)	(200)	(55,726)
Operating (loss)/profit	(28,002)	17,676	2,612	(7,714)

Audited year ended 31 March 2008

Republic of Rest of

Ireland UK the World Total

	€’000	€’000	€’000	€’000

Segment revenue	1,112,936	3,982,215	436,811	5,531,962

Operating profit*	61,999	95,521	9,660	167,180
Amortisation of intangible assets	(3,009)	(4,646)	(273)	(7,928)
Net operating exceptionals	45,404	(5,331)	(468)	39,605
Operating profit	104,394	85,544	8,919	198,857

* Operating profit before amortisation of intangible assets and net operating exceptionals

5. Exceptional Items


	Unaudited	Unaudited	Audited
	6 months	6 months	year
	ended	ended	ended
	30 Sept.	30 Sept.	31 March
	2008	2007	2008
	€’000	€’000	€’000

Profit on disposal of associate	4,945	-	94,763
Restructuring and other costs	(3,775)	(5,726)	(5,158)
Costs of legal action with Fyffes plc	-	(50,000)	(50,000)
	1,170	(55,726)	39,605
Taxation	-	-	(1,756)

	1,170	(55,726)	37,849

A profit of €4.945 million arose on the Group's disposal during the period of its 47.5% shareholding in HealthDrive Corporation. The Group incurred other exceptional restructuring charges of €3.775 million.

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
	2008	2007	2008
	€'000	€'000	€'000

Profit/(loss) attributable to equity holders of the Company	43,161	(19,470)	164,491
Amortisation of intangible assets after tax	2,618	2,775	6,269
Exceptionals after tax	(1,170)	55,726	(37,849)

Adjusted profit after taxation and minority interests	44,609	39,031	132,911

Basic earnings per ordinary share	cent	cent	cent

Basic earnings/(loss) per ordinary share	53.06c	(24.21c)	204.28c

Adjusted basic earnings per ordinary share	54.84c	48.52c	165.06c

Weighted average number of ordinary shares in issue (thousands)	81,346	80,436	80,522

Diluted earnings per ordinary share	cent	cent	cent

Diluted earnings/(loss) per ordinary share	52.49c	(23.68c)	200.31c

Adjusted diluted earnings per ordinary share	54.25c	47.48c	161.85c

Diluted weighted average number of ordinary shares in issue (thousands)	82,230	82,208	82,119

The adjusted figures for earnings per share are intended to demonstrate the results of the Group after eliminating the impact of amortisation of intangible assets and net exceptionals.

7. Dividends

	Unaudited		Unaudited	Audited
	6 months		6 months	year
	ended		ended	ended
	30 Sept.		30 Sept.	31 March
	2008		2007	2008
	€'000		€'000	€'000

Interim - paid 20.55 cent per share on 7 December 2007	-		-	16,555
Final - paid 36.12 cent per share on 24 July 2008 (paid 31.41 cent per share on 26 July 2007)	29,373		25,258	25,258
	29,373	25,258	25,258	41,813

On 7 November 2008, the Board approved an interim dividend of 22.61 cent per share (2007/2008 interim dividend: 20.55 cent per share). These condensed consolidated interim financial statements do not reflect this dividend payable.

8. Movement in Total Equity

	Unaudited	Unaudited	Audited
	6 months	6 months	year
	ended	ended	ended
	30 Sept.	30 Sept.	31 March
	2008	2007	2008
	€'000	€'000	€'000


At beginning of period	742,435	687,730	687,730

Re-issue of treasury shares	8,556	1,280	4,060
Share based payment	946	827	1,844
Dividends	(29,373)	(25,258)	(41,813)
Movement in minority interest	(329)	(2,170)	(2,045)

Total recognised expense and income for the period attributable to equity holders	38,369	(29,208)	92,659

At end of period	760,604	633,201	742,435

9. Analysis of Net Debt

	Unaudited	Unaudited	Audited
	30 Sept.	30 Sept.	31 March
	2008	2007	2008
	€'000	€'000	€'000
Non-current assets:
Derivative financial instruments	31,942	4,685	25,347

Current assets:
Derivative financial instruments	438	303	1,523
Cash and term deposits	408,332	524,622	485,840
	408,770	524,925	487,363
Non-current liabilities:
Borrowings	(2,969)	(3,110)	(4,548)
Derivative financial instruments	(28,766)	(55,213)	(43,558)
Unsecured Notes due 2008 to 2019	(372,768)	(435,565)	(353,571)
	(404,503)	(493,888)	(401,677)
Current liabilities:
Borrowings	(152,733)	(209,357)	(157,718)
Derivative financial instruments	(12,216)	(350)	(17,206)
Unsecured Notes due 2008 to 2019	(64,509)	-	(59,828)
	(229,458)	(209,707)	(234,752)

Net debt	(193,249)	(173,985)	(123,719)

Including Group share of joint ventures' net cash	7,293	3,678	9,040

10. Retirement Benefit Obligations

The Group's defined benefit pension schemes' assets were measured at market value at 30 September 2008. The defined benefit pension schemes' liabilities at 30 September were updated to reflect material movements in underlying assumptions.

The deficit on the Group's retirement benefit obligations increased from €21.851 million at 31 March 2008 to €24.811 million at 30 September 2008. The increase in the deficit was primarily driven by a deterioration in investment returns which was partially offset by a reduction in the valuation of pension liabilities due to an increase in corporate bond yields used to value liabilities.

11. Changes in Estimates and Assumptions

The following actuarial assumptions have been made in determining the Group's retirement benefit obligation for the six months ended 30 September 2008:

	Unaudited	Unaudited	Audited
	6 months	6 months	year
	ended	ended	ended
	30 Sept.	30 Sept.	31 March
	2008	2007	2008
	€'000	€'000	€'000
Discount rate
- Republic of Ireland	6.00%	4.70% - 4.80%	5.60%
- UK	6.05%	5.10%	5.85%

12. Cash Generated from Operations

	Unaudited	Unaudited	Audited
	6 months	6 months	year
	ended	ended	ended
	30 Sept.	30 Sept.	31 March
	2008	2007	2008
	€’000	€’000	€’000

Profit/(loss) for the period	43,547	(18,885)	165,174
Add back non-operating (income)/expense
- Tax	4,918	4,026	16,530
- Share of profit from associates	(127)	(305)	(639)
- Net operating exceptionals	(1,170)	55,726	(39,605)
- Net finance costs	10,191	7,450	17,792
Group operating profit	57,359	48,012	159,252
Share-based payments expense	946	827	1,844
Depreciation	22,529	22,099	45,445
Amortisation of intangible assets	3,245	3,608	7,928
Changes in working capital	29,120	16,965	(84,380)
Profit on sale of property, plant and equipment	(162)	(96)	(751)
Amortisation of government grants	(91)	(141)	(288)
Dividends received from associates	-	-	220
Other	(2,244)	(969)	(227)

Cash generated from operations	110,702	90,305	129,043

13. Business Combinations

The principal acquisitions completed by the Group during the six months ended 30 September 2008 were as follows:

the acquisition of the trade, assets and goodwill of Chevron's UK oil distributor business ('Chevron') on 1 September 2008; and
the acquisition of FindlaterGrants (100%) on 15 September 2008.

The acquisition of Chevron has been deemed to be a substantial transaction and separate disclosure of the fair values of the identifiable assets and liabilities has therefore been made. None of the remaining business combinations completed during the year were considered sufficiently material to warrant separate disclosure of the fair values attributable to those combinations.

The initial assignments of fair values to identifiable net assets acquired have been performed on a provisional basis given the timing of closure of these acquisitions.

Identifiable net assets acquired (excluding net cash acquired) were as follows:

	Unaudited 6 months ended 30 Sept. 2008
	Chevron	Others	Total
	€'000	€'000	€'000
Assets
Non-current assets
Property, plant and equipment	5,810	2,758	8,568
Intangible assets - goodwill	22,883	19,724	42,607
Intangible assets - other intangible assets	2,120	1,543	3,663
Deferred income tax assets	-	84	84
Total non-current assets	30,813	24,109	54,922

Current assets
Inventories	6,105	9,455	15,560
Trade and other receivables	84,994	21,021	106,015
Total current assets	91,099	30,476	121,575

Equity
Minority interest	-	(21)	(21)
Total equity	-	(21)	(21)

Liabilities
Non-current liabilities
Deferred income tax liabilities	(594)	(488)	(1,082)
Total non-current liabilities	(594)	(488)	(1,082)

Current liabilities
Trade and other payables	(85,183)	(21,037)	(106,220)
Current income tax liabilities	-	(331)	(331)
Total current liabilities	(85,183)	(21,368)	(106,551)

Total consideration (enterprise value)	36,135	32,708	68,843

Satisfied by:
Cash	36,135	30,203	66,338
Net (cash)/debt acquired	-	(2,943)	(2,943)
Net cash outflow	36,135	27,260	63,395
Deferred acquisition consideration	-	5,448	5,448
Total consideration	36,135	32,708	68,843

13. Business Combinations - continued

The carrying amounts of the assets and liabilities acquired, determined in accordance with IFRS before completion of the combination together with the adjustments made to those carrying values disclosed above were as follows:

	Book value	Fair value adjustments	Fair value
Chevron	€'000	€'000	€'000

Non-current assets (excluding goodwill)	5,810	2,120	7,930
Current assets	93,610	(2,511)	91,099
Non-current liabilities and minority interest	-	(594)	(594)
Current liabilities	(85,183)	-	(85,183)
Identifiable net assets acquired	14,237	(985)	13,252
Goodwill arising on acquisition	21,898	985	22,883
Total consideration (enterprise value)	36,135	-	36,135

	Book value	Fair value adjustments	Fair value
Other acquisitions	€'000	€'000	€'000

Non-current assets (excluding goodwill)	2,842	1,543	4,385
Current assets	30,476	-	30,476
Non-current liabilities and minority interest	(78)	(431)	(509)
Current liabilities	(21,368)	-	(21,368)
Identifiable net assets acquired	11,872	1,112	12,984
Goodwill arising on acquisition	20,836	(1,112)	19,724
Total consideration (enterprise value)	32,708	-	32,708

	Book value	Fair value adjustments	Fair value
Total	€'000	€'000	€'000

Non-current assets (excluding goodwill)	8,652	3,663	12,315
Current assets	124,086	(2,511)	121,575
Non-current liabilities and minority interest	(78)	(1,025)	(1,103)
Current liabilities	(106,551)	-	(106,551)
Identifiable net assets acquired	26,109	127	26,236
Goodwill arising on acquisition	42,734	(127)	42,607
Total consideration (enterprise value)	68,843	-	68,843

The initial assignments of fair values to identifiable net assets acquired have been performed on a provisional basis with any amendments to these fair values to be finalised within a twelve month timeframe from the dates of acquisition.

There were no adjustments processed during the six months ended 30 September 2008 to the fair value of business combinations completed during the preceding twelve months.

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.

The acquisitions during the year contributed €127.879 million to revenues and €0.767 million to operating profit before exceptional items. Had all the business combinations effected during the period occurred at the beginning of the period, total Group revenue for the six months ended 30 September 2008 would be €3,772.724 million and total Group operating profit before exceptional items would be €61.237 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 SerCom Distribution.

15. Related Party Transactions

There have been no related party transactions or changes in related party transactions other than those described in the Annual Report in respect of the year ended 31 March 2008 that could have a material impact on the financial position or performance of the Group in the six months ended 30 September 2008.

16. Events after the Balance Sheet Date

There have been no material events subsequent to 30 September 2008 which would require disclosure in this report.

17. Distribution of Interim Report

This report and further information on DCC is available at the Company's website www.dcc.ie. 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, Ireland.

Statement of Directors' Responsibilities

We confirm that to the best of our knowledge:

1. the condensed set of interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU;

2. 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

Michael Buckley Tommy Breen

Chairman Chief Executive

10 November 2008

This information is provided by RNS

The company news service from the London Stock Exchange

END

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