DCC hails “record year” driven by energy sector acquisitions
DCC shares rose four per cent to 6,395p in early afternoon trade, following what the FTSE 100-listed group described as a "record year".
Support services group DCC — whose activities range from oil distribution, waste management and food distribution — posted a 33.5 per cent rise in operating profit to £300.5m from the year ending 31 March.
However, revenue from its from continuing operations came in flat at £10.6bn, primarily due to oil prices which fell around 20 per cent during this period.
Why it's interesting
DCC's full-year results were driven by a near 72 per cent jump in operating profits in its energy division. This was due to its acquisition of French gas company Butagaz from Shell for €464m (£362.8m) last year, and Esso’s unmanned petrol station business in France for €106m.
Tommy Breen, chief executive of DCC, said: "In the last 15 years or so we've made over 200 acquisitions. A lot of those are in the energy sector where oil majors have been divesting their downstream assets."
He said this was in line with the group's strategy of expanding geographically, and added "we'd love to be doing more of it".
They were also helped by growth in its healthcare and environmental divisions. Nevertheless, its technology segment lagged, primarily due to the UK business.
Breen said this came as Brits bought less mobile phones, tablets, computers and gaming products. "The market slowed down faster than anybody in it predicted last year," he added.
What DCC said
When asked about a potential slowdown in the UK economy ahead of the EU referendum next month, Breen said: "We haven't seen, in our business certainly until this point, any material change or slowdown."
"We would have a view that if there was Brexit it could perhaps bring uncertainty… if there was uncertainty that's not good for anybody."
DCC was helped by acquisitions in its energy sector, and the group suggested that there could be more in the pipeline.