Energy fuels healthy rise in DCC FY profits

Diversified Irish investment group DCC said full year pre-tax profits soared 47% to £216.3m fuelled largely by its energy division.

Revenues were flat at £10bn, largely due to lower oil prices.

Group operating profit from continuing operations increased by 35.5% to £300.5m (40.0% on a constant currency basis), driven predominantly by acquisitions completed during the year. The average euro/sterling translation rate for the year of 0.7301 was 7.5% lower than the average of 0.7890 in the prior year.

Operating profit in DCC Energy, the group's largest division, was 71.9% ahead of the prior year (79.6% on a constant currency basis), largely driven by the significant acquisitions completed during the year of Butagaz, Esso Retail France and DLG, all of which traded at, or ahead of, expectations.

"Although DCC Energy was adversely impacted by the relatively mild winter weather conditions, a good margin and cost performance was achieved," the company said.

Chief executive Tommy Breen said the healthcare and environment divisions also had strong years, although the technology division saw operating profits fell 28.8% due to the weak performance of its UK business which was adversely impacted by a reduction in sales of products from one large supplier, particularly in the first half of the year, and also by weaker than anticipated demand for tablet computing, smartphone and gaming products.

The completion and successful integration of both Butagaz and Esso Retail France were significant achievements during the year and "materially increased" the scale of its energy business. Both acquisitions were trading well, DCC said.

The final dividend jumped 15% to 64.18 pence per share making a total of 97.22 pence per share.

The company said it expected that 2017 will be another year of "profit growth and development".