DCC (DCC) beat full-year consensus estimates, driving up earnings by a third on flat revenues. Continued strong cash generation enabled the Irish distribution and marketing group to bump up the final dividend for the 22nd consecutive year. That's an enviable record, but with a 97 per cent conversion rate of operating profits to free cash flow, it's hardly surprising.
Earnings were driven by a stellar contribution from the energy division, but both the healthcare and environmental segments delivered double-digit growth in operating profits. Management admits that the 24.4 per cent return on capital achieved in the former was "flattered somewhat" by the contributions of Butagaz and Esso Retail France, both of which were acquired in the 12 months under review.
But DCC has established a track record of successfully buying in growth - just look at those intangibles on the balance sheet - and with a minuscule net debt/cash profits ratio of 0.1, there's scope for further earnings-accretive deals. Indeed, in March this year, DCC announced that it had reached an agreement to acquire a commercial, aviation and retail fuels business in Denmark, previously owned by Shell.
Jefferies gives adjusted profits of £303m for the year to March 2017, leading to EPS of 281p, against £272m and 257p in FY2016.
| DCC (DCC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 6,365p | MARKET VALUE: | £5.63bn | |
| TOUCH: | 6,360p-6,370p | 12-MONTHHIGH: | 6,530p | LOW: 4,337p |
| DIVIDEND YIELD: | 1.5% | PE RATIO: | 31 | |
| NET ASSET VALUE: | 1,491p* | NET DEBT: | 4% | |
| Year to 31 Mar | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2012 | 10.7 | 133 | 123 | 77.9 |
| (£bn) | (£m) | (p) | (p) | |
| 2013 | 10.6 | 133 | 127 | 69.9 |
| 2014 | 11.1 | 151 | 144 | 76.9 |
| 2015 | 10.6 | 163 | 153 | 84.5 |
| 2016 | 10.6 | 216 | 203 | 97.2 |
| % change | - | +33 | +32 | +15 |
Ex-div: 26 May Payment: 21 Jul *Includes intangible assets of £1.3bn, or 1,466p a share. | ||||
