DCC reports strong third quarter but technology division lags

DCC, which was promoted to the FTSE 100 in December, reported a strong third quarter but warned of “more difficult” trading in its technology division.

The sales, marketing, distribution and business support services group said operating profit in the third quarter to the end of December was “very significantly ahead” of the previous year, with excellent growth in the energy, healthcare and environment units, although it was a different story for technology.

Operating profit in DCC Energy was significantly ahead of the prior year despite the milder winter weather conditions.

The company said the two large acquisitions completed earlier in the financial year, Esso Retail France and Butagaz, performed in line with, or modestly ahead of expectations.

Meanwhile, overall heating-related volumes were held back by the mild temperatures, but a good margin and cost performance was achieved.

In the technology division, operating profit was behind the previous year, as the business continued to suffer from reduced demand for tablet, smartphone and gaming products.

Healthcare traded well ahead of the prior year thanks to a very strong performance from DCC Health & Beauty Solutions, a continued improvement in the sales mix and good cost control in DCC Vital.

Operating profit in the environmental division was also significantly improved.

DCC said it continues to expect operating profit and adjusted earnings per share to be “very significantly ahead” of the previous year and in line with current market views.

“DCC remains ambitious to continue the growth and development of its business in existing and new geographies and retains a strong, well-funded and liquid balance sheet.”