Final Results
DCC PLC
15 May 2006
Preliminary Results for the Year Ended 31 March 2006
Change on prior year
--------------------
€ Reported Constant
currency*
Revenue 3,436.3m +29.9% +30.0%
Profit before net exceptional items, 142.0m +15.5% +16.5%
amortisation of intangible assets and tax
Profit before tax 138.8m +37.5% +38.7%
Adjusted earnings per share** 157.23 cent +14.6% +15.5%
Dividend per share 42.85 cent +15.0%
Net debt at 31 March 2006 32.7m
Return on capital employed
- excluding intangible assets: 43.0% (44.9%: 2005)
- including intangible assets: 19.1% (20.4%: 2005)
* all constant currency figures quoted in this report are based on
retranslating current year figures at prior year translation rates
** excluding net exceptional items and amortisation of intangible assets
DCC, the business support services group, today announced its results for the
year ended 31 March 2006.
Commenting on the results, DCC's Chief Executive/Deputy Chairman, Jim Flavin,
said:
'Excellent profit growth was achieved in DCC Energy, DCC Healthcare,
DCC Food & Beverage and in DCC's share of associates' profit after tax.
DCC SerCom also achieved strong profit growth in the second half after
a difficult first half.
DCC has budgeted for continued good operating profit growth from
subsidiaries in the current year to 31 March 2007. As announced on
3 April 2006, the share of associates' profit after tax may be materially
less in the current year, based on DCC's current expectation of a short
term reduction in the profit contribution from its 49% shareholding in
Manor Park Homebuilders due to planning delays. Manor Park has a large
landbank for housing development and other development projects in the
pipeline from which it should earn substantial profits in the future.'
For reference, please contact:
Jim Flavin, Chief Executive/Deputy Chairman
Fergal O'Dwyer, Chief Financial Officer
Conor Murphy, Investor Relations Manager
Tel: +353 1 2799 400
Email: investorrelations@dcc.ie
Web: www.dcc.ie
IFRS
DCC adopted International Financial Reporting Standards (IFRS) on 1 April 2005
and these results have been prepared in accordance with IFRS. All prior year
comparatives in this report have been restated under IFRS. A full restatement
of DCC's results for the year ended 31 March 2005 under IFRS was issued on 30
September 2005.
Results
A summary of the results for the year to 31 March 2006 is as follows:
Change on prior year
--------------------
Constant
€'m Reported currency*
Revenue 3,436.3 +29.9% +30.0%
Operating profit**
DCC Energy 56.0 +8.0% +9.4%
DCC SerCom 25.0 -4.9% -4.0%
DCC Healthcare 21.6 +40.1% +41.2%
DCC Food & Beverage 15.5 +20.6% +20.9%
DCC Environmental 5.5 +1.2% +1.7%
Group operating profit 123.6 +10.5% +11.6%
Share of associates' profit after tax 25.5 +51.6% +51.6%
Net financing costs (7.1)
Profit before net exceptional items,
amortisation of intangible assets
and tax 142.0 +15.5% +16.5%
Adjusted EPS** (cent) 157.23 +14.6% +15.5%
* all constant currency figures quoted in this report are based on
retranslating current year figures at prior year translation rates
** excluding net exceptional items and amortisation of intangible assets
Excellent profit growth was achieved in DCC Energy, DCC Healthcare, DCC Food &
Beverage and in DCC's share of associates' profit after tax. DCC SerCom also
achieved strong profit growth in the second half after a difficult first half.
Under IFRS, DCC's profit contribution from associates is shown separately as
share of associates' profit after tax.
The net financing cost for the year increased to €7.1 million (2005: €5.7
million).
Profit before net exceptional items, amortisation of intangible assets and tax
increased by 15.5% on a reported basis and by 16.5% on a constant currency
basis.
The effective tax rate for the Group, including associates, increased marginally
to 12.7% from 12.0%.
Adjusted earnings per share for the year of 157.23 cent increased by 14.6% on a
reported basis and by 15.5% on a constant currency basis.
Excellent second half results
DCC achieved excellent profit growth in the seasonally more important second
half of the year. A summary of the second half and first half performance is as
follows:
Second half First half
------------- ------------
€'m Change €'m Change
Operating profit*
DCC Energy 45.3 +9.8% 10.7 +1.2%
DCC SerCom 17.4 +22.0% 7.6 -37.0%
DCC Healthcare 11.5 +33.8% 10.1 +48.1%
DCC Food & Beverage 8.1 +8.1% 7.4 +37.9%
DCC Environmental 2.7 -0.3% 2.8 +2.6%
Group operating profit 85.0 +14.4% 38.6 +2.9%
Share of associates' profit after tax 19.8 +104.8% 5.7 -20.7%
Net financing costs (3.9) (3.2)
Profit before net exceptional items,
amortisation of intangibles and tax 100.9 +25.3% 41.1 -3.0%
Adjusted EPS* (cent) 111.89 +24.6% 45.34 -4.4%
* excluding net exceptional items and amortisation of intangible assets
Financial strength - continued strong cash generation
DCC's record of strong cash generation continued, with cash generated from
operations of €142.9 million, an increase of 22.8% on the previous year. This
cashflow substantially relates to cash generated by DCC's subsidiaries and joint
ventures. While cash generation in DCC's associates increased substantially in
the year, dividends received by DCC from these associates amounted to just €1.0
million.
At 31 March 2006, the Group had net debt of €32.7 million and total equity of
€585.4 million. Despite a 29.9% (€791.6 million) increase in revenue, working
capital increased by just €11.2 million to €114.1 million, which equates to 9.5
days revenue and compares favourably to 10.2 days revenue at 31 March 2005.
This strong financial position leaves DCC well placed to pursue its organic and
acquisition growth objectives.
Dividend increase of 15.0%
The Directors are recommending a final dividend of 27.31 cent per share which,
when added to the interim dividend of 15.54 cent per share, gives a total
dividend of 42.85 cent per share for the year, a 15.0% increase over the prior
year dividend of 37.26 cent per share. The dividend is covered 3.7 times by
adjusted earnings per share (3.7 times: 2005). The final dividend will be paid
on 14 July 2006 to shareholders on the register at the close of business on 26
May 2006.
Acquisitions and development
Acquisition and development expenditure in the year amounted to €120.8 million
of which €57.9 million related to capital expenditure. DCC's ongoing acquisition
search process resulted in the completion of a number of acquisitions at a total
committed cost of €62.9 million. The cash impact of acquisitions in the year was
€54.7 million.
As part of the ongoing planned expansion of its British based oil business, DCC
Energy acquired a number of smaller British oil distributors during the year.
On 13 June 2005, DCC Healthcare expanded its acute and community care business
through the acquisition of British based Physio-Med Services, a market-leading
supplier of a broad range of physiotherapy and rehabilitation equipment and
consumables to physiotherapists, occupational therapists, podiatrists,
chiropractors and end users.
On 15 June 2005, DCC SerCom acquired Pilton Company, a leading distributor of
DVDs, computer games and other products to the home entertainment market in
Ireland, with a developing business in Britain. On 6 July 2005, SerCom
Distribution expanded its continental European operations into Belgium, Holland
and Luxembourg through the acquisition of the trade, goodwill and certain assets
of AB Computing. This business is complementary to operations in France, Spain
and Portugal.
Today DCC announced that it had acquired a 50% shareholding in the William
Tracey Group, Scotland's leading recycling and waste management business. The
acquisition increases the scale and technical expertise of DCC Environmental and
also achieves the dual objective of expanding into the non-hazardous waste
business and entering the British market.
The Group is actively pursuing further acquisition opportunities in all core
areas.
Fyffes and other litigation
On 21 December 2005, the Irish High Court found in favour of DCC and Others in
the case taken against them by Fyffes plc, under Part V of the Irish Companies
Act 1990, in relation to the sale of shares by Lotus Green in February 2000. In
dismissing Fyffes' claim against all of the defendants, the Court held that the
share sales were entirely lawful and that none of the defendants had any
liability arising from the sales of the shares in Fyffes in February 2000.
On 10 February 2006, the Irish High Court decided that Fyffes should pay most of
DCC's costs in relation to Fyffes' failed legal action against the Group. DCC
expects to recoup approximately €8.5 million from Fyffes following this High
Court order and, accordingly, has accrued this amount as a credit under
exceptional operating costs.
On 7 April 2006, Fyffes announced its intention to lodge an appeal to the Irish
Supreme Court seeking to overturn the decision of the Irish High Court in
relation to Fyffes' failed legal action against DCC plc and Others. Fyffes'
appeal will be challenged vigorously and comprehensively and DCC is confident
that there are no good grounds of appeal and that the detailed and considered
decision of the High Court will be upheld.
On 29 November 2005, the Hsinchu District Court in Taiwan issued a judgment
ordering that the London High Court order obtained by DCC's subsidiary, Days
Healthcare, against Pihsiang Machinery Manufacturing Company Limited (a
Taiwanese public company), Donald Wu (its chairman and major shareholder) and
Jenny Wu (his wife and director) be enforced in Taiwan. Accordingly, as at 31
March 2006, these parties are jointly and severally liable to pay the DCC Group
Stg£14.3 million (€20.5 million), including Stg£2.1 million in accrued interest.
DCC has not accrued any of this amount due pending the outcome of an appeal by
the Defendants to the Taiwanese High Court, but has expensed all the litigation
costs as an exceptional item.
Outlook
DCC has budgeted for continued good operating profit growth from subsidiaries in
the current year to 31 March 2007. As announced on 3 April 2006, the share of
associates' profit after tax may be materially less in the current year, based
on DCC's current expectation of a short term reduction in the profit
contribution from its 49% shareholding in Manor Park Homebuilders due to
planning delays. Manor Park has a large landbank for housing development and
other development projects in the pipeline from which it should earn substantial
profits in the future.
Operating review
DCC Energy Change on prior year
---------------------
2006 2005 Reported Constant
currency
Revenue €1,831.6m €1,240.6m +47.6% +47.7%
Operating profit €56.0m €51.8m +8.0% +9.4%
Return on capital employed
- excluding intangible assets 53.8% 53.4%
- including intangible assets 24.5% 25.3%
DCC Energy achieved excellent profit growth in the year. During the year, the
business delivered 2.9 billion litres of fuel products, a volume increase of
19.0% over the prior year.
DCC's LPG business performed satisfactorily against a challenging background of
significantly increasing product costs.
DCC's oil business generated strong growth benefiting from the successful
integration of the acquisitions in the prior year of Shell Direct UK and Dyneley
Holdings. Both of these acquisitions performed ahead of expectations and have
provided the oil business in Britain with a good platform for further growth.
DCC SerCom Change on prior year
---------------------
2006 2005 Reported Constant
currency
Revenue €1,084.6m €983.5m +10.3% +10.3%
Operating profit €25.0m €26.3m -4.9% -4.0%
Operating margin 2.3% 2.7%
Return on capital employed
- excluding intangible assets 24.4% 30.3%
- including intangible assets 14.3% 18.4%
After a difficult first half, the profits of DCC SerCom grew strongly in the
second half by 22.0%, benefiting from the Pilton acquisition and the successful
restructuring of SerCom Solutions.
SerCom Distribution, the IT & entertainment products business, was particularly
impacted in the first half by product price deflation, a rapid deterioration in
the retail trading environment in Britain and a significant decline in demand in
the Continental European enterprise infrastructure market. The business enjoyed
a much improved second half, benefiting from strong sales volume growth, an
increased focus on consumer digital products, the launch of Xbox 360 and the
acquisitions of Pilton Company and AB Computing.
The restructuring of SerCom Solutions, the supply chain management business,
announced in January 2005, was successfully completed in the first half of the
year. Since the restructuring, the business has performed strongly and
contributed €2.8 million operating profit this year compared to a loss of €1.1
million in the prior year. The business achieved excellent top line growth, with
revenue up 19.9% to €126.3 million. During the year the business strengthened
its position with a number of its customers outsourcing further elements of
their supply chains to SerCom Solutions.
DCC Healthcare Change on prior year
---------------------
2006 2005 Reported Constant
currency
Revenue €211.7m €162.3m +30.5% +30.5%
Operating profit €21.6m €15.4m +40.1% +41.2%
Operating margin 10.2% 9.5%
Return on capital employed
- excluding intangible assets 60.5% 50.3%
- including intangible assets 16.7% 13.6%
DCC Healthcare achieved excellent revenue and operating profit growth.
Excellent profit growth was achieved in DCC Healthcare's sales and marketing
activities, benefiting from the acquisition of Physio-Med Services in June 2005
and from good organic growth. Particularly good growth was achieved in
intravenous pharmaceutical products and related devices and in DCC's own branded
rehabilitation and independent living products, which was facilitated by DCC's
procurement and quality control office in Shenzhen, China.
DCC Nutraceuticals, which provides contract services to the health & beauty
sector, achieved excellent profit growth, benefiting from a first full year
contribution from Laleham Healthcare and from continuing strong organic growth.
The business deepened its relationships with existing customers by providing
continuing high service levels and support in new product development.
Additional business development personnel have been recruited to further
accelerate the expansion of its customer base.
DCC Food & Beverage Change on prior year
---------------------
2006 2005 Reported Constant
currency
Revenue €276.9m €232.6m +19.0% +19.0%
Operating profit €15.5m €12.8m +20.6% +20.9%
Operating margin 5.6% 5.5%
Return on capital employed
- excluding intangible assets 55.2% 57.1%
- including intangible assets 18.7% 21.3%
DCC Food & Beverage achieved excellent revenue and operating profit growth in
the year, benefiting from the acquisition of Bottle Green and the full buyout of
Allied Foods in the first half of the prior year and from good organic growth.
The healthfoods business continued to achieve good organic revenue growth.
Investment in the Kelkin healthfood brand and new Kelkin product development
resulted in a small short term reduction in its profits. The British based wine
business, which enjoyed strong growth in the first half, performed below
expectation in the second half. Snackfoods, the Irish wine business, the
restaurant operations and the frozen and chilled business all achieved good
growth.
DCC Environmental Change on prior year
---------------------
2006 2005 Reported Constant
currency
Revenue €31.5m €25.8m +22.0% +22.0%
Operating profit €5.5m €5.5m +1.2% +1.7%
Operating margin 17.5% 21.1%
Return on capital employed
- excluding intangible assets 31.8% 45.7%
- including intangible assets 17.4% 20.7%
DCC Environmental achieved strong revenue growth in the year. Operating profit
growth was held back by tighter margins in some areas of the business.
Today DCC announced that it had acquired a 50% shareholding in the William
Tracey Group, Scotland's leading recycling and waste management business. The
acquisition increases the scale and technical expertise of DCC Environmental
and also achieves the dual objective of expanding into the non-hazardous waste
business and entering the British market.
Associates Change on prior year
---------------------
2006 2005 Reported Constant
currency
Share of associates' profit after
tax €25.5m €16.8m +51.6% +51.6%
DCC's principal associate is Manor Park Homebuilders in which it holds a 49%
shareholding. DCC's share of its profit after tax increased substantially. Manor
Park has a large landbank for housing development and other development
projects in the pipeline.
Annual Report and Annual General Meeting
DCC's 2006 Annual Report is expected to be posted to shareholders on 7 June
2006. The Company's Annual General Meeting will be held at 11:00 am on Monday 10
July 2006 in The Four Seasons Hotel, Simmonscourt Road, Ballsbridge, Dublin 4,
Ireland.
Note: All constant currency figures quoted in this report are based on
retranslating current year figures at prior year translation rates.
This announcement and further information on DCC is available on the web
at www.dcc.ie
There will be a presentation of these results to analysts and
investors/fund managers in Dublin at 8:45 am today. The slides for
this presentation can be downloaded from DCC's website www.dcc.ie.
A dial-in facility will be available for this meeting:
Ireland: + 353 1 2421074
International: +44 20 8974 7916
Passcode: C 649082
GROUP INCOME STATEMENT
for the year ended 31 March 2006
2006 2005
-------------------------------------------- -------------------------------------------
Pre net Net exceptionals Pre net Net
exceptionals ( note 5) Total exceptionals exceptionals Total
Notes €'000 €'000 €'000 €'000 €'000 €'000
Revenue 3 3,436,292 3,436,292 2,644,728 2,644,728
Cost of sales (2,992,240) (2,992,240) (2,258,200) (2,258,200)
Gross profit 444,052 444,052 386,528 386,528
Operating costs (320,457) 2,841 (317,616) (274,715) (15,967) (290,682)
Operating profit
before amortisation
of intangible assets 123,595 2,841 126,436 111,813 (15,967) 95,846
Amortisation
of intangible
assets (4,956) (4,956) (1,261) (1,261)
Operating
profit 4 118,639 2,841 121,480 110,552 (15,967) 94,585
Finance costs
(net) (7,041) (1,145) (8,186) (5,694) (4,809) (10,503)
Share of associates
profit after tax 25,474 25,474 16,807 16,807
Profit
before tax 137,072 1,696 138,768 121,665 (20,776) 100,889
Income tax
expense (13,479) (12,107)
Profit after
tax for the year 125,289 88,782
Profit
attributable to:
Equity holders
of the Company 123,764 87,760
Minority
interests 1,525 1,022
Profit after
tax for the year 125,289 88,782
Earnings per
ordinary share
- basic 6 153.92c 109.68c
Diluted earnings per
ordinary share
- basic 6 150.46c 107.16c
Group Balance Sheet
as at 31 March 2006
2006 2005
Note €'000 €'000
ASSETS
Non-current assets
Property, plant and equipment 267,494 254,791
Intangible assets 248,475 208,053
Investment in associates 76,789 51,384
Derivative financial instruments 8,989 -
Deferred income tax assets 4,596 6,957
606,343 521,185
Current assets
Inventories 138,734 124,049
Trade and other receivables 522,143 410,190
Derivative financial instruments 144 -
Cash and cash equivalents 345,280 353,304
1,006,301 887,543
Total assets 1,612,644 1,408,728
EQUITY
Capital and reserves attributable to the
Company's equity holders
Equity share capital 22,057 22,042
Share premium account 124,687 124,506
Other reserves 1,400 1,400
Other reserves - share options 3,392 1,552
Cash flow hedge reserve 20 -
Foreign currency translation reserves (10,344) (5,565)
Retained earnings 439,477 343,936
580,689 487,871
Minority interests 4,714 4,348
Total equity 585,403 492,219
LIABILITIES
Non-current liabilities
Interest-bearing loans and borrowings 292,793 316,644
Derivative financial instruments 27,077 -
Deferred income tax liabilities 10,718 9,996
Retirement benefit obligations 20,679 25,380
Deferred acquisition consideration 18,808 10,839
Capital grants 1,991 958
Total non-current liabilities 372,066 363,817
Current liabilities
Interest-bearing loans and borrowings 67,151 45,553
Derivative financial instruments 73 -
Trade and other payables 543,913 447,717
Current income tax liabilities 36,697 37,189
Provisions for liabilities and charges 3,785 15,149
Deferred acquisition consideration 3,556 7,084
Total current liabilities 655,175 552,692
Total liabilities 1,027,241 916,509
Total equity and liabilities 1,612,644 1,408,728
Net debt 8 (32,681) (8,893)
Group Cash Flow Statement
for the year ended 31 March 2006
2006 2005
Note €'000 €'000
Cash flows from operating activities
Group operating profit before exceptional
items 118,639 110,552
Depreciation 34,142 32,867
Share-based payments expense 1,840 1,003
Amortisation of intangible assets 4,956 1,261
Increase in working capital (11,162) (24,678)
Profit on disposal of property, plant and
equipment (1,295) (2,050)
Amortisation of capital grants (112) (155)
Dividends received from associates 1,028 1,354
Other (5,114) (3,758)
Cash generated from operations 142,922 116,396
Exceptional items (15,377) (6,560)
Interest paid (20,573) (15,627)
Income tax paid (12,157) (9,289)
Net cash flow from operating activities 94,815 84,920
Cash flows from investing activities
Inflows
Proceeds from disposal of fixed assets 11,223 7,875
Interest received 13,650 12,833
Capital grants received 1,174 -
26,047 20,708
Outflows
Purchase of property, plant and equipment (57,652) (43,647)
Acquisition of subsidiaries (48,625) (77,288)
Purchase of minority interests (506) (905)
Deferred acquisition consideration paid (5,580) (2,955)
(112,363) (124,795)
Net cash outflow from investing activities (86,316) (104,087)
Cash flows from financing activities
Inflows
Proceeds from issue of shares 3,344 6,858
Increase in interest-bearing loans and
borrowings 36,624 213,244
39,968 220,102
Outflows
Share buyback - (26,762)
Repayment of interest-bearing loans and
borrowings (663) (88,918)
Repayment of finance lease liabilities (5,973) (5,062)
Dividends paid to equity holders of the
Company 7 (31,568) (27,212)
Dividends paid to minority interests (201) (176)
(38,405) (148,130)
Net cash inflow from financing activities 1,563 71,972
Change in cash and cash equivalents 10,062 52,805
Translation adjustment (4,541) (10,074)
Cash and cash equivalents at beginning of
year 314,397 271,666
Cash and cash equivalents at end of year 319,918 314,397
Cash and cash equivalents consists of:
Cash at bank and short term deposits 345,280 353,304
Overdrafts (25,362) (38,907)
319,918 314,397
Group Statement of Recognised Income and Expense
for the year ended 31 March 2006
2006 2005
€'000 €'000
Items of income/(expense) recognised directly
within equity:
Currency translation (4,779) (5,565)
Group defined benefit pension schemes:
- actuarial gain/(loss) 1,779 (7,742)
- deferred tax asset 82 771
Deferred tax on share based payment 25 25
Gains relating to cash flow hedges (net) 23 -
Deferred tax liability on cash flow hedge (3) -
Net expense recognised directly within equity (2,873) (12,511)
Group profit for the year 125,289 88,782
Total recognised income and expense for the year 122,416 76,271
Attributable to:
Equity holders of the Company 120,891 75,249
Minority interests 1,525 1,022
Total recognised income and expense for the year 122,416 76,271
Group Statement of Changes in Equity
for the year ended 31 March 2006
2006 2005
€'000 €'000
At beginning of year 492,219 462,816
Impact of adoption of IAS 32 and 39 (1,689) -
At beginning of year as adjusted 490,530 462,816
Issue of share capital 3,344 6,858
Share based payment 1,840 1,003
Share buyback - (26,762)
Dividends (31,568) (27,212)
Movement in minority interest 366 267
Total recognised income and expense for the year
attributable to equity holders 120,891 75,249
At end of year 585,403 492,219
Notes to the Preliminary Results
for the year ended 31 March 2006
1. International Financial Reporting Standards
Basis of Preparation
The financial information presented in this preliminary announcement has been
prepared in accordance with International Financial Reporting Standards (IFRS)
and IFRIC interpretations endorsed by the European Union (EU) and with those
parts of the Companies Act, 1963 to 2005 applicable to companies reporting under
IFRS published on 30 September 2005. The financial statements have been prepared
under the historical cost convention. The financial statements for the year
ended 31 March 2005, which were prepared in accordance with accounting policies
generally accepted in the Republic of Ireland (Irish GAAP), have, with the
exception of IAS 32 Financial Instruments: Disclosure and Presentation and IAS
39 Financial Instruments: Recognition and Measurement, been restated under IFRS
with effect from the transition date.
As permitted under IFRS1: First-time Adoption of International Financial
Reporting Standards, the Group applied hedge accounting in accordance with Irish
GAAP for the year ended 31 March 2005 and adopted IAS 32 and IAS 39 from 1 April
2005.
Full details of the accounting policies adopted by the Group on implementation
of IFRS, and of the impact on the reported results and balance sheet of the
Group on transition to IFRS, were published on 30 September 2005 and are
available on the Group's website www.dcc.ie.
Statutory accounts
The accounts in this preliminary announcement are not the statutory accounts of
the Company, a copy of which is required to be annexed to the Company's annual
return to the Companies Registration Office. A copy of the statutory accounts in
respect of the year ended 31 March 2006 will be annexed to the Company's annual
return for 2006. The auditors of the Company have made a report, without any
qualification on their audit, of the statutory accounts of the Company in
respect of the year ended 31 March 2005 and the Directors approved the statutory
accounts of the Company in respect of the year ended 31 March 2006 on 12 May 2006.
A copy of the statutory accounts of the Company in respect of the year ended 31
March 2005 has been annexed to the Company's annual return for 2005 to the
Companies Registration Office.
Approved IFRS
The Group's accounting policies under IFRS are based on the International
Financial Reporting Standards and Interpretations issued by the International
Accounting Standards Board (IASB) and on International Accounting Standards
(IAS) and Standing Interpretations Committee interpretations approved by the
predecessor International Accounting Standards Committee that have been
subsequently authorised by the IASB and remain in effect.
2. Reporting Currency
The Group's financial statements are prepared in euro denoted by the symbol €.
The exchange rates used in translating sterling balance sheet and profit and
loss amounts were as follows:
2006 2005
€1=Stg£ €1=Stg£
Balance sheet (closing rate) 0.697 0.689
Profit and loss (average rate)* 0.682 0.672
* The average exchange rate for the year ended 31 March 2005 has been adjusted
for the impact of forward foreign exchange contracts used to hedge a portion
of the Group's sterling profits for that year.
3. Revenue
2006 2005
€'000 €'000
DCC Energy 1,831,608 1,240,551
DCC SerCom 1,084,606 983,483
DCC Healthcare 211,701 162,279
DCC Food & Beverage 276,917 232,635
DCC Environmental 31,460 25,780
Revenue 3,436,292 2,644,728
Of which acquisitions contributed 119,348 312,253
4. Operating Profit
2006 2005
€'000 €'000
DCC Energy 55,965 51,806
DCC SerCom 25,015 26,292
DCC Healthcare 21,636 15,441
DCC Food & Beverage 15,467 12,827
DCC Environmental 5,512 5,447
123,595 111,813
Amortisation of intangible assets (4,956) (1,261)
Operating net exceptional items 2,841 (15,967)
Operating profit 121,480 94,585
Of which acquisitions contributed 8,121 9,596
5. Net Exceptional Items
Exceptional items gave rise to a net credit of €1.696 million as follows:
2006
€'000
Costs of legal actions with Fyffes plc and others (5,147)
Provision for recovery of legal costs from Fyffes plc 8,500
Other (512)
Operating net exceptional items 2,841
Foreign exchange losses on intercompany
financing loans to 30 September 2005 (1,145)
1,696
On 21 December 2005, the Irish High Court found in favour of DCC and Others in
the case taken against them by Fyffes plc, under Part V of the Irish Companies
Act 1990, in relation to the sale of shares by Lotus Green in February 2000. In
dismissing Fyffes' claim against all of the defendants, the Court held that the
share sales were entirely lawful and that none of the defendants had any
liability arising from the sales of the shares in Fyffes in February 2000.
On 10 February 2006, the Irish High Court decided that Fyffes should pay most of
DCC's costs in relation to Fyffes' failed legal action against the Group. DCC
expects to recoup approximately €8.5 million from Fyffes following this High
Court order and, accordingly, has accrued this amount as a credit under
exceptional operating costs.
On 7 April 2006, Fyffes announced its intention to lodge an appeal to the Irish
Supreme Court seeking to overturn the decision of the Irish High Court in
relation to Fyffes' failed legal action against DCC plc and Others. Fyffes'
appeal will be challenged vigorously and comprehensively and DCC is confident
that there are no good grounds of appeal and that the detailed and considered
decision of the High Court will be upheld.
On 29 November 2005, the Hsinchu District Court in Taiwan issued a judgment
ordering that the London High Court order obtained by DCC's subsidiary, Days
Healthcare, against Pihsiang Machinery Manufacturing Company Limited (a
Taiwanese public company), Donald Wu (its chairman and major shareholder) and
Jenny Wu (his wife and director) be enforced in Taiwan. Accordingly, as at 31
March 2006, these parties are jointly and severally liable to pay the DCC Group
Stg£14.3 million (€20.5 million), including Stg£2.1 million in accrued interest.
DCC has not accrued any of this amount due pending the outcome of an appeal by
the Defendants to the Taiwanese High Court, but has expensed all the litigation
costs.
Certain intercompany loans had been treated under Irish GAAP as part of net
investment in foreign operations and foreign exchange gains or losses arising on
these loans had been recognised directly in reserves. On transition from Irish
GAAP, certain of these loans between fellow subsidiaries do not qualify under
IFRS as part of net investment in foreign operations and therefore gains or
losses on these loans must be recognised in the Income Statement.
The financial impact of the above is a charge to the Income Statement of €1.145
million for the year ended 31 March 2006 (year ended 31 March 2005: charge of
€4.809 million) in respect of foreign exchange losses and the amounts are
included in exceptional items.
The majority of the intercompany balances which gave rise to these accounting
charges (previously taken to reserves) were restructured during the year ended
31 March 2005 and the half year ended 30 September 2005 so as to eliminate
accounting volatility from 30 September 2005 onwards.
6. Earnings per Ordinary Share and Adjusted Earnings per Ordinary Share
2006 2005
€'000 €'000
Profit after taxation and minority interests 123,764 87,760
Amortisation of intangible assets (net of tax) 4,361 1,261
Net exceptional items (1,696) 20,776
Adjusted profit after taxation and minority interests 126,429 109,797
Basic earnings per ordinary share cent cent
Basic earnings per ordinary share 153.92c 109.68c
Adjusted basic earnings per ordinary share* 157.23c 137.22c
Weighted average number of ordinary shares in 80,408 80,018
issue during the period ('000)
Diluted earnings per ordinary share cent cent
Diluted earnings per ordinary share 150.46c 107.16c
Adjusted diluted earnings per ordinary share* 153.70c 134.07c
Diluted weighted average number of ordinary shares ('000) 82,255 81,898
*adjusted to exclude amortisation of intangible assets and exceptional items.
7. Dividends
2006 2005
€'000 €'000
Interim 2005/2006 dividend of 15.54 cent per share
(2004/2005: 13.51 cent per share) 12,495 10,811
Final 2004/2005 dividend of 23.75 cent per share
(2003/2004: 20.65 cent per share) 19,073 16,401
31,568 27,212
On 12 May 2006, the Board proposed a final 2005/2006 dividend of 27.31 cent per
share. These accounts do not reflect this dividend payable.
8. Analysis of Net Debt
2006 2005
€'000 €'000
Non-current assets:
Derivative financial instruments 8,989 -
Current assets:
Derivative financial instruments 144 -
Cash and term deposits 345,280 353,304
345,424 353,304
Non-current liabilities:
Interest-bearing loans and borrowings (6,327) (11,550)
Derivative financial instruments (27,077) -
Unsecured Notes due 2008 to 2016 (286,466) (305,094)
(319,870) (316,644)
Current liabilities:
Interest-bearing loans and borrowings (67,151) (45,553)
Derivative financial instruments (73) -
(67,224) (45,553)
Net debt (32,681) (8,893)
Including Group share of joint ventures' net cash/(debt) 469 (701)
This information is provided by RNS
The company news service from the London Stock Exchange
Friday, 17th May 2024
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