Interim Results

DCC PLC 12 November 2001 12 November 2001 DCC Group Earnings up 19.3% Interim Results for the Six Months ended 30 September 2001 EUR Turnover 925.6 m Up 12.5% Operating profit 39.2 m Up 14.4% Profit before net exceptional 37.2 m Up 15.9% gains, goodwill amortisation and taxation Profit after taxation and 29.0 m Up 19.3% minorities Adjusted earnings per share* 36.83 cent Up 20.1% Dividend per share 9.288 cent Up 20.0% Net cash at 30 September 2001 36.9 m * adjusted to exclude net exceptional gains and goodwill amortisation DCC, the leading value added marketing and distribution group, today announced its results for the six months ended 30 September 2001. Commenting on the results, DCC's Chief Executive & Deputy Chairman, Jim Flavin, said: 'This result reflects well on the resilience of DCC's balanced business model which is focused on value added marketing and distribution across a number of market sectors. This was an excellent result driven principally by organic growth and, in the context of an increasingly difficult economic climate, we expect to achieve very good growth for the full year.' For reference, please contact: Jim Flavin, Chief Executive & Deputy Chairman Fergal O'Dwyer, Chief Financial Officer Conor Costigan, Investor Relations Manager Tel: +353 1 2799 400 Email: investorrelations@dcc.ie www.dcc.ie Results The strong results in the six months ended 30 September 2001 reflect well on the resilience of DCC's balanced business model which is focused on value added marketing and distribution across a number of market sectors. - Turnover was up 12.5% to EUR 925.6 million. - Operating profit was up 14.4% to EUR 39.2 million. - The net interest charge for the period was EUR 2.0 million (EUR 2.1 million). - Profit before net exceptional gains, goodwill amortisation and taxation increased by 15.9% to EUR 37.2 million. - The taxation rate was 14.0% (15% in prior year). - Profit after taxation and minorities grew by 19.3% to EUR 29.0 million. - Adjusted earnings per share (i.e. excluding net exceptional gains and goodwill amortisation) increased by 20.1% to 36.83 cent. - Interim dividend is up 20.0% to 9.288 cent. Business Highlights DCC is a value added marketing and distribution group, operating principally in the IT, energy and healthcare markets. DCC holds strong market positions in Britain and Ireland and is expanding in Continental Europe. - IT - operating profit EUR 13.2m Up 13.1% SerCom Distribution achieved an excellent result in very difficult market conditions for the IT industry. There was particularly good growth in software and in computer storage products. - Energy - operating profit EUR 8.2m Up 44.3% Energy achieved excellent profit growth driven by increased volumes and more stable oil prices. - Healthcare - operating profit EUR 10.6m Up 8.4% Healthcare achieved good organic profit growth reflecting increased profits in Hospital Supply and Mobility & Rehab. - Other activities - operating profit EUR 7.2m Up 1.0% Strong profit growth in Food was offset by the impact on SerCom Solutions of the slowdown in the IT market. - Group operating profit EUR 39.2m Up 14.4% Development Activity DCC has an excellent record of business building through a particular focus on achieving strong organic growth, supplemented by complementary acquisitions. In total, EUR 92.9 million was committed to organic growth and acquisitions in the first half. A number of strategically important bolt-on acquisitions were completed during the period: - The acquisition of BP's oil marketing and distribution business in Scotland and northern England (now called Scottish Fuels) was completed during the period and on 1 October, Noble Fuels, a geographically complementary distributor based in Teeside, was acquired. As a result of these acquisitions, DCC Energy is now the market leader in oil distribution in Scotland as well as Northern Ireland and has an excellent platform for further growth in Britain. - The acquisition of Envirotech broadens DCC's growing environmental services business into the water treatment sector. Environmental services is a high growth market and DCC plans continued development in this area. - In IT Distribution, the acquisition of AGP, a south of England based distributor of computer storage products, has accelerated DCC's growth in computer storage products in Britain, building on DCC's Continental European strength in this product category. Acquisition commitments totalled EUR 30.3 million in the period. The cash impact of acquisitions amounted to EUR 16.9 million (including the payment of EUR 3.0 million of deferred consideration, which had been provided for at 31 March 2001). Investment in working capital and fixed assets amounted to EUR 62.6 million. There was an increase in working capital of EUR 48.4 million, reflecting normal seasonality and sales growth in the period - working capital days at 21.9 days were consistent with last year. Capital expenditure was EUR 14.2 million. Financial Strength and Share Buy Back As announced on 28 September 2001, the Board took advantage of the Group's attractive share price and strong balance sheet to buy back 2,275,000 shares, representing 2.7% of the listed share capital, at EUR 9.25 per share, for a total consideration of EUR 21.04 million. Settlement of this transaction took place after 30 September 2001 and therefore did not reduce the net cash figure at that date. Combining this buy back and the 2,563,045 shares purchased on 28 July 2000, the total number of shares that have been bought back amounts to 4,838,045, representing 5.5% of DCC's issued share capital. At 30 September 2001, the Group had net cash of EUR 36.9 million and shareholders' funds of EUR 355.4 million. DCC's strong financial position leaves the Group well placed to pursue its growth objectives and, if deemed appropriate, to buy back more shares. Dividend The Board has decided to pay an interim dividend of 9.288 cent per share - up 20.0% on the interim dividend paid in the previous financial year. The interim dividend will be paid on 30 November 2001 to shareholders on the register at the close of business on 23 November 2001. FTSE Reclassification to Business Support Services As announced on 2 November, the FTSE Global Classification Committee has reclassified DCC to the Business Support Services sector with effect from the close of business on 31 December 2001. DCC welcomes this reclassification to a bigger, more highly rated and more liquid sector which has a broader analyst following. Outlook DCC's balanced business model leaves it well positioned to continue to achieve excellent long-term shareholder returns and, in the context of an increasingly difficult economic climate, to achieve very good growth for the full year. Operating Review IT (SerCom Distribution) 2001 2000 Turnover EUR 363.7m EUR 327.9m +10.9% Operating profit EUR 13.2m EUR 11.6m +13.1% Operating margin 3.62% 3.55% SerCom Distribution achieved an excellent result in very difficult market conditions for the IT industry. There was particularly good growth in software and in computer storage products. Micro P, the British hardware distributor, grew its profits and further strengthened its position in the marketplace. The acquisition of AGP, a south of England based computer storage products distributor, has created a strong platform from which to develop a much larger business in the growing computer storage products sector. Gem, the British software distributor, had an excellent first half. The company continues to benefit from its focus on the consumer software market, as the value of Gem's expertise is recognised by an increasing number of software publishers. In October, Microsoft announced the appointment of Gem as sole distributor of the Xbox console, software and peripherals for the UK and Irish markets. The Xbox is due for launch in these markets in the first quarter of 2002 and represents a significant opportunity for Gem. In Continental Europe, Distrilogie had a strong first half based on continued growth in demand for computer storage products. Distrilogie's performance has been formally recognised by a number of its vendors including IBM, which has named the company as its largest storage distributor in Europe. The Irish business, Sharptext, had a difficult first half due to its product range being particularly impacted by the significant slowdown in the IT market. Energy 2001 2000 Turnover EUR 295.6m EUR 254.3m +16.2% Operating profit EUR 8.2m EUR 5.7m +44.3% Operating margin 2.8% 2.2% Energy achieved excellent profit growth driven by increased volumes and more stable oil prices. Oil volumes benefited from a full six months' contribution from Fuel Services, the Northern Ireland based company acquired in July 2000. LPG volumes were satisfactory with particularly strong growth achieved in the autogas sector in Britain. The use of LPG autogas as a transport fuel continues to grow in Britain and DCC has a significant share of this fast growing segment of the market. A number of strategically important bolt-on acquisitions have been completed in the period which have opened up interesting complementary growth opportunities for DCC's energy activities: - The acquisition of BP's oil marketing and distribution business in Scotland and northern England (now called Scottish Fuels), together with the subsequent acquisition of Noble Fuels, has extended DCC's fast growing oil marketing and distribution activities into Britain and provides an excellent platform for further growth in this market. - DCC has had a strong presence in the oil treatment sector of the environmental services market in Ireland for a number of years. The acquisition of Envirotech broadens DCC's growing environmental services business into the water treatment sector. Environmental services is a high growth market and DCC plans continued development in this area. Healthcare 2001 2000 Turnover EUR 100.8m EUR 97.8m +3.1% Operating profit EUR 10.6m EUR 9.8m +8.4% Operating margin 10.6% 10.0% Healthcare achieved good organic profit growth reflecting increased profits in Hospital Supply and Mobility & Rehab. The Irish Hospital Supply business achieved good growth and has recently secured significant new distribution agreements. Fannin Healthcare has enhanced its customer service to Irish hospitals through the launch of a customised e-commerce system in August, initially to a number of major Irish hospitals. There was continued good profit growth in the Mobility & Rehabilitation businesses. Strong sales growth in the domestic British market was somewhat offset by more competitive export markets. Operating profits in the Nutraceuticals business, while in line with the prior year, were impacted by the loss of a major customer towards the end of the period (as referred to in the operating review for the year ended 31 March 2001). This will have a greater impact on Nutraceuticals in the second half. Other Activities 2001 2000 Turnover EUR 165.5m EUR 142.6m +16.1% Operating profit EUR 7.2m EUR 7.1m +1.0% Operating margin 4.4% 5.0% Strong profit growth in Food was offset by the impact on SerCom Solutions of the slowdown in the IT market. Food - Operating profits were EUR 5.1 million, an increase of 17.9% over the prior year. Sales for the period of EUR 90.1 million benefited from the increased investment in the prior year in sales and distribution resources, including an expanded van sales force. Sales growth was 8.7%, after adjusting for the cessation of Kylemore's fresh bakery activities. Supply Chain Management Services - The completion of the developmental investment in SerCom Solutions towards the end of the last financial year coincided with the severe slowdown in the IT and telecommunications markets. While sales in the first half grew by 32.3% to EUR 53.5 million, driven principally by increased lower margin procurement activity on behalf of customers, an operating loss of EUR 0.2 million was incurred (profit of EUR 0.7 million in the prior year). While market conditions in the IT sector are not expected to improve in the second half, SerCom Solutions is well placed to take advantage of opportunities which should arise when more normal market conditions prevail. Other - Operating profit from other interests increased by 5.6% to EUR 2.3 million. The principal other interest is DCC's 49% shareholding in Manor Park Homebuilders, which has commenced sales at its principal housing development at Ongar, west Dublin. Manor Park has other ongoing developments in Dublin, Cork and Drogheda and has a substantial land bank for future development. DCC plc CONSOLIDATED PROFIT AND LOSS ACCOUNT Unaudited Unaudited Audited 6 months 6 months year ended ended ended 30 Sept. 30 Sept. 31 March 2001 2000 2001 Notes EUR '000 EUR '000 EUR '000 Turnover 2 925,604 822,571 1,870,141 Operating profit 3 39,187 34,251 91,737 Net interest payable (1,972) (2,129) (4,402) Profit on ordinary activities 37,215 32,122 87,335 before net exceptional gains, goodwill amortisation and taxation Net exceptional gains 4 18 - - Goodwill amortisation (2,533) (2,352) (4,923) Profit on ordinary activities 3 34,700 29,770 82,412 before taxation Taxation (5,210) (4,818) (13,100) Profit after taxation 29,490 24,952 69,312 Minority interests (497) (659) (1,230) Profit attributable to Group 28,993 24,293 68,082 shareholders Dividends 5 (7,750) (6,691) (18,140) Profit retained for the period 21,243 17,602 49,942 Earnings per ordinary share - basic (cent) 6 33.89c 27.96c 78.98c - fully diluted (cent) 6 33.66c 27.33c 78.28c Adjusted earnings per ordinary share - basic (cent) 6 36.83c 30.67c 84.69c - fully diluted (cent) 6 36.57c 29.97c 83.94c Dividend per ordinary share 5 9.288c 7.740c 21.120c (cent) DCC plc CONSOLIDATED BALANCE SHEET Unaudited Unaudited Audited 30 Sept. 30 Sept. 31 March 2001 2000 2001 Note EUR '000 EUR '000 EUR '000 Fixed Assets Intangible assets - goodwill 96,978 83,957 84,447 Tangible fixed assets 144,059 129,353 135,241 Financial assets - associated 33,340 36,103 38,458 undertakings 274,377 249,413 258,146 Current Assets Stocks 117,987 96,770 93,063 Debtors 304,568 274,289 296,804 Cash and term deposits 392,382 367,223 454,582 814,937 738,282 844,449 Creditors: Amounts falling due within one year Bank and other debt 218,416 155,341 200,621 Amount due in respect of buy 21,044 - - back of shares Trade and other creditors 318,722 265,045 328,328 Corporation tax 14,361 15,637 18,959 Proposed dividend 7,750 6,619 11,449 580,293 442,642 559,357 Net Current Assets 234,644 295,640 285,092 Total Assets less Current 509,021 545,053 543,238 Liabilities FINANCED BY: Creditors: Amounts falling due after more than one year Bank and other debt 32,519 89,482 65,753 Unsecured Notes due 2008/11 104,502 108,933 104,977 Deferred acquisition consideration 10,144 15,814 11,464 147,165 214,229 182,194 Provisions for Liabilities and Charges 1,799 2,060 1,801 148,964 216,289 183,995 Capital and Reserves Equity share capital and share premium 146,481 145,759 146,484 Reserves 208,938 178,634 208,202 Equity Shareholders' Funds 355,419 324,393 354,686 Minority interests 3,662 3,541 3,493 Capital grants 976 830 1,064 360,057 328,764 359,243 509,021 545,053 543,238 Net cash 7 36,945 13,467 83,231 DCC plc RECONCILIATION OF MOVEMENTS IN EQUITY SHAREHOLDERS' FUNDS Unaudited Unaudited Audited 6 months 6 months year ended ended ended 30 Sept. 30 Sept. 31 March 2001 2000 2001 EUR '000 EUR '000 EUR '000 Profit attributable to Group 28,993 24,293 68,082 shareholders Dividends (7,750) (6,691) (18,140) Profit retained for the period 21,243 17,602 49,942 Acquisition of own shares (21,307) (24,668) (24,668) (inclusive of costs) Issues of equity share capital 1,246 1,945 2,670 net of capital duty Movement on other reserves of (30) 38 (25) associated undertakings Exchange adjustments (419) 353 (2,356) Net movement in shareholders' funds 733 (4,730) 25,563 Opening shareholders' funds 354,686 329,123 329,123 Closing shareholders' funds 355,419 324,393 354,686 DCC plc CASH FLOW Unaudited Unaudited Audited 6 months 6 months year ended ended ended 30 Sept. 30 Sept. 31 March 2001 2000 2001 Note EUR '000 EUR '000 EUR '000 Inflows Operating cash flow (see below) (2,683) (13,898) 83,369 Disposal proceeds 8,259 16,026 16,026 Share issues (net) - 1,945 1,930 5,576 4,073 101,325 Outflows Capital expenditure (net) 14,687 13,116 29,506 Acquisitions 16,895 23,299 25,969 Acquisition of own shares - 24,668 24,668 Interest paid 582 2,826 2,587 Taxation paid 8,294 5,765 9,073 Dividends paid 11,449 9,807 16,426 51,907 79,481 108,229 Net cash outflow (46,331) (75,408) (6,904) Translation adjustment 45 (284) 976 Movement in net cash for the period (46,286) (75,692) (5,928) Opening net cash 83,231 89,159 89,159 Closing net cash 7 36,945 13,467 83,231 OPERATING CASH FLOW Unaudited Unaudited Audited 6 months 6 months year ended ended ended 30 Sept. 30 Sept. 31 March 2001 2000 2001 EUR '000 EUR '000 EUR '000 Group operating profit 39,187 34,251 91,737 Operating profit of associated (4,383) (3,672) (8,950) undertakings Dividends received from 796 917 1,896 associated undertakings Depreciation of tangible fixed 11,012 9,808 20,766 assets Increase in working capital (48,388) (54,593) (19,929) Other (907) (609) (2,151) Operating cash flow (2,683) (13,898) 83,369 DCC plc Notes to the Interim Results for the Six Months ended 30 September 2001 1. Basis of Preparation The interim financial statements for the six months ended 30 September 2001 have been prepared in accordance with the accounting policies set out in the financial statements for the year ended 31 March 2001. The interim financial statements for the six months ended 30 September 2001 and the comparative figures for the six months ended 30 September 2000 are unaudited. The summary financial statements for the year ended 31 March 2001 represent an abbreviated version of the Group's full accounts for that year, on which the Auditors issued an unqualified audit report and which have been filed with the Registrar of Companies. The Group's financial statements are prepared in euro denoted by the symbol EUR. The exchange rates used in translating sterling balance sheet and profit and loss amounts were as follows: 6 months 6 months Year ended ended ended 30 Sept. 30 Sept. 31 March 2001 2000 2001 EUR 1=Stg£ EUR 1=Stg£ EUR 1=Stg£ Balance sheet (closing rate) 0.622 0.597 0.619 Profit and loss (average rate) 0.614 0.610 0.613 2. Turnover Unaudited Unaudited Audited 6 months 6 months year ended ended ended 30 Sept. 30 Sept. 31 March 2001 2000 2001 EUR '000 EUR '000 EUR '000 IT 363,714 327,855 753,887 Energy 295,628 254,327 610,257 Healthcare 100,808 97,819 182,657 Other Activities 165,454 142,570 323,340 925,604 822,571 1,870,141 Analysis of turnover by subsidiary undertakings and associated undertakings: Subsidiary undertakings 842,405 750,006 1,712,402 Associated undertakings 83,199 72,565 157,739 925,604 822,571 1,870,141 Of which acquisitions 35,709 13,113 69,208 contributed 3. Profit before Taxation Unaudited Unaudited Audited 6 months 6 months year ended ended ended 30 Sept. 30 Sept. 31 March 2001 2000 2001 EUR '000 EUR '000 EUR '000 IT 13,176 11,645 31,203 Energy 8,169 5,660 23,617 Healthcare 10,643 9,818 20,313 Other Activities 7,199 7,128 16,604 Group operating profit * 39,187 34,251 91,737 Net interest payable (1,972) (2,129) (4,402) Profit on ordinary activities 37,215 32,122 87,335 before net exceptional gains, goodwill amortisation and taxation Net exceptional gains 18 - - Goodwill amortisation (2,533) (2,352) (4,923) Profit before taxation 34,700 29,770 82,412 Analysis of operating profit by subsidiary undertakings and associated undertakings: Subsidiary undertakings 34,804 30,579 82,787 Associated undertakings 4,383 3,672 8,950 Operating profit 39,187 34,251 91,737 *Of which acquisitions contributed 395 (179) 1,078 4. Net Exceptional Gains Net exceptional gains comprise mainly the profit on disposal of an associated undertaking less the Group's share of the reorganisation costs of an associated undertaking. 5. Dividends Unaudited Unaudited Audited 6 months 6 months year ended ended ended 30 Sept. 30 Sept. 31 March 2001 2000 2001 EUR '000 EUR '000 EUR '000 Interim dividend of 9.288 cent per 7,750 6,619 6,619 share (2000: 7.740 cent per share) Proposed final dividend of - - 11,449 13.380 cent per share Additional final dividend - 72 72 7,750 6,691 18,140 The additional final dividend of EUR 72,000 for the six months ended 30 September 2000 and the year ended 31 March 2001 is in respect of shares issued after the date of approval of the accounts for the year ended 31 March 2000 but qualifying for receipt of the final dividend declared in respect of that year. 6. Earnings per Ordinary Share and Adjusted Earnings per Ordinary Share Unaudited Unaudited Audited 6 months 6 months year ended ended ended 30 Sept. 30 Sept. 31 March 2001 2000 2001 EUR '000 EUR '000 EUR '000 Profit after taxation and minority 28,993 24,293 68,082 interests Net exceptional gains (18) - - Goodwill amortisation 2,533 2,352 4,923 Adjusted profit after taxation and 31,508 26,645 73,005 minority interests Basic earnings per ordinary share cent cent cent Basic earnings per ordinary share 33.89 27.96 78.98 Adjusted basic earnings per 36.83 30.67 84.69 ordinary share* Weighted average number of 85,549 86,890 86,202 ordinary shares in issue during the period ('000) Fully diluted earnings per ordinary share Fully diluted earnings per ordinary share 33.66 27.33 78.28 Adjusted fully diluted earnings 36.57 29.97 83.94 per ordinary share* Fully diluted weighted average 86,147 89,276 87,030 number of ordinary shares ('000) *adjusted to exclude goodwill amortisation and net exceptional gains. 7. Analysis of Net Cash Unaudited Unaudited Audited 30 Sept. 30 Sept. 31 March 2001 2000 2001 EUR '000 EUR '000 EUR '000 Cash and term deposits 392,382 367,223 454,582 Bank and other debt repayable (218,416) (155,341) (200,621) within one year Bank and other debt repayable (32,519) (89,482) (65,753) after more than one year Unsecured Notes due 2008/11 (104,502) (108,933) (104,977) Net cash 36,945 13,467 83,231 8. Distribution of Interim Report This announcement and further information on DCC is available at the Company's website at www.dcc.ie. A printed copy of this report is being posted to shareholders and will be available to the public at the Company's registered office at DCC House, Stillorgan, Blackrock, Co. Dublin.

Companies

DCC (CDI) (DCC)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today