DCC (DCC) rounded off a half year laden with acquisitions with the announcement of the $60m (£46.8m) purchase of Ion Laboratories, a Florida-based contract manufacturer of nutritional products. The deal follows a further £118m in acquisition spend over the conglomerate’s first six months, as DCC built out its LPG, energy, retail & oil and healthcare segments over the period.
DCC’s net debt shot up to £245m – or 1.5 times adjusted operating profits – from just £18.4m at March 2019, with the group’s working capital increasing by £98.1m owing to “seasonal working capital requirements, lower supply chain financing utilisation” and “increasing scale”, the company noted. DCC remains intent on making more acquisitions, according to chief executive Donal Murphy. The Ion deal represents the latest step in a strategic move made three years ago to enter the US nutritional market, which is projected to grow annual at 6 per cent and stands as the world’s largest, at $46bn. DCC’s nutritional health and beauty products are its highest source of organic growth, Mr Murphy added.
Peel Hunt forecasts full-year 2020 pre-tax profits and earnings per share of £446.3m and 366.8p, respectively, rising to £451.6m and 367.4p in 2021.
| DCC (DCC) | ||||
| ORD PRICE: | 7,118p | MARKET VALUE: | £7bn | |
| TOUCH: | 7,114-7,120p | 12-MONTH HIGH: | 7,548p | LOW: 5,555p |
| DIVIDEND YIELD: | 2% | PE RATIO: | 29 | |
| NET ASSET VALUE: | 2,417p* | NET DEBT: | 10%** | |
| Half-year to 30 Sep | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 7.42 | 85.9 | 76.15 | 44.98 |
| 2019 | 7.31 | 57.6 | 38.34 | 49.48 |
| % change | -1 | -33 | -50 | +10 |
| Ex-div: | 21 Nov | |||
| Payment: | 11 Dec | |||
| *Includes intangible assets of £2.1bn, or 21.5p a share **Excludes lease liabilities of £286.4m | ||||
