We last heard from sales, marketing and support services group DCC (DCC) a little over two months ago when it released its full year results. At the time, it said that trading across April and the early weeks of May had been better than anticipated amid the Covid-19 disruption – albeit behind the previous year – and it had remained “significantly” profitable. Since then, trading has continued to improve and performance across the three months to 30 June has come in ahead of the group’s expectations.
Operating profit in the liquefied petroleum gas (LPG) business was down year-on-year owing to weaker commercial and industrial volumes, particularly in the UK and Ireland. This is despite stronger domestic and retail cylinder demand as people spent more time at home. The LPG division accounted for around half of the group’s overall operating profit last year.
Over in the ‘retail and oil’ business – which operates retail petrol stations and distributes oil across Europe – overall volumes were also lower due to decreased demand for transport fuel. But operating profit was “modestly” up in the quarter versus a year earlier thanks to good cost control and an increase in higher margin domestic and agricultural sales. As economies started to reopen, there was also a gradual recovery in transport fuel volumes in the second half of the quarter.
DCC’s smaller healthcare division saw operating profit boosted by last year’s acquisitions of health supplements manufacturer Ion Labs and powdered nutritional products maker Amerilab. The ‘Vital’ business – which sells pharmaceuticals and medical devices – has also benefitted from “very strong” demand for Covid-19-related products, which offset the impact of fewer elective surgery procedures and in-person medical consultations during this crisis.
