DCC (ie: DCC) downgraded its growth expectations following the unusually warm British spring and summer. The Dublin-based distributor's core energy division, which transports oil and liquified gas to depots for domestic and other uses, reported a 5 per cent fall in profits as demand for heating fuel was impacted by milder weather in April, May and September. As energy accounts for 44 per cent of operating profit and October also turned out to be a mild month, management now expects adjusted EPS growth of 5-10 per cent for the full year, down from 10-12 per cent.
Elsewhere, things look rosier. The group’s four other divisions all reported profit growth on the back of strong markets and £148m of acquisitions, pushing adjusted operating profits up 6 per cent at the group level. DCC Technology, which provides business services to tech retailers and resellers, posted 8 per cent growth in operating profit, thanks partly to the booming gaming console market. DCC Healthcare, meanwhile, was boosted by the acquisitions of Williams Medical and Universal Products Manufacturing, together with strong organic growth in its health and beauty business. The small food and beverages business also traded ahead of the prior year, but since the period-end has been sold for about £60m.
Broker Jefferies has downgraded its pre-tax profit forecast from £206m to £193m for the current financial year, giving EPS of 200p.
| DCC (DCC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 3,475p | MARKET VALUE: | £2.9bn | |
| TOUCH: | 3,474-3,476p | 12-MONTH HIGH: | 3,708p | LOW: 2,720p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 1,097p* | NET DEBT: | 29% | |
| Half-year to 30 Sep | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 5.41 | 42.5 | 41.8 | 26.12 |
| 2014 | 5.51 | 47.5 | 50.4 | 28.73 |
| % change | +2 | +12 | +21 | +10 |
Ex-div: 13 Nov Payment: 28 Nov *Includes intangible assets of £784.6m, or 934p a share | ||||
