Interim Results
DCC PLC
12 November 2007
Interim Results for the Six Months ended 30 September 2007
€ Change on prior year
Revenue 2,258.7m +25.3%
Operating profit* 51.6m +17.6%
Share of associates' profit after tax 0.3m -95.0%
Profit before exceptional items,
amortisation of intangible assets and tax 44.5m -0.2%
Adjusted earnings per share* 48.52 cent +14.4%**
Dividend per share 20.55 cent +15.0%
Operating cashflow 90.3m +172.6%
Net debt at 30 September 2007 174.0m
* excluding exceptional items and amortisation of intangible assets
** excluding the Manor Park contribution in the prior year
DCC, the business support services group, today announced its results for the
six months ended 30 September 2007.
Commenting on the results, Jim Flavin, Executive Chairman said:
'These excellent results were driven by strong organic growth and acquisitions.
It is pleasing to note the particularly strong profit growth in DCC's two
largest divisions, DCC Energy and DCC SerCom, and also in DCC's growing
environmental services business.
We have had a strong start to the seasonally more significant second half and
the Board now expects high teen growth in operating profit for the full year
which is ahead of current market expectations.'
For reference, please contact:
Jim Flavin, Executive Chairman Tel: +353 1 2799 400
Tommy Breen, Group Managing Director Email: investorrelations@dcc.ie
Fergal O'Dwyer, Chief Financial Officer www.dcc.ie
Conor Murphy, Investor Relations Manager
Results
A summary of the results for the six months to 30 September 2007 is as follows:
€'m Change on prior year
Revenue 2,258.7 +25.3%
Operating profit*
DCC Energy 14.5 +23.9%
DCC SerCom 12.5 +18.8%
DCC Healthcare 10.4 +6.5%
DCC Environmental 7.2 +56.7%
DCC Food & Beverage 7.0 -4.3%
-------
Group operating profit 51.6 +17.6%
Share of associates' profit after tax 0.3 -95.0%
Finance costs (net) (7.4)
------
Profit before exceptional items,amortisation
of intangible assets and tax 44.5 -0.2%
Adjusted EPS* (cent) 48.52 +14.4%**
Dividend per share (cent) 20.55 +15.0%
* excluding exceptional items and amortisation of intangible assets
**excluding the Manor Park contribution in the prior year
Excellent revenue and operating profit growth
The excellent growth in revenue and operating profit was driven by strong
organic growth and acquisitions.
Particularly strong profit growth was achieved in DCC's two largest divisions,
DCC Energy and DCC SerCom, and also in DCC's growing environmental services
business.
Share of associates' profit after tax
DCC's 49% shareholding in Manor Park Homebuilders Ltd is held as an asset for
sale and accordingly has not been accounted for as an associate company, in line
with IFRS 5. The impact of this accounting policy on DCC's reported results in
the six months to 30 September 2007 is immaterial. DCC continues to be actively
engaged in discussions in pursuit of the best return for shareholders from this
investment.
Notwithstanding that the investment in Manor Park Homebuilders has not
contributed to earnings in the current period, there continues to be significant
shareholder value in the investment.
Finance costs (net)
The net financing cost for the period increased to €7.4 million (2006: €5.4
million) driven by acquisitions and higher interest rates. The Group's net debt
levels averaged €227 million during the period compared to €212 million in the
six months to 30 September 2006.
Excellent underlying growth in adjusted earnings per share
There was excellent growth in adjusted earnings per share from DCC's core
managed and controlled businesses and joint ventures which, excluding the
contribution from Manor Park Homebuilders in the comparative period to 30
September 2006, was 14.4%.
Interim dividend increase of 15%
The Board has decided to increase the interim dividend by 15% to 20.55 cent per
share. This dividend will be paid on 7 December 2007 to shareholders on the
register at the close of business on 23 November 2007.
Acquisitions and Development
Acquisition and development expenditure in the period amounted to €119.2 million
of which €33.2 million related to capital expenditure. DCC's ongoing acquisition
search process has resulted in a number of acquisitions at a total committed
cost of €86.0 million. The cash impact of acquisitions in the period was €92.0
million.
The main acquisition during the period was the purchase of CPL Petroleum Ltd, a
leading supplier of transport fuels and heating oils to commercial, domestic and
agricultural customers throughout Britain.
Today DCC announced the acquisition of Banque Magnetique, a leading French
distributor of consumer electronics and IT peripherals to a broad range of
retail customers at a cash cost of €38.1 million made up of consideration of
€12.5 million and debt acquired of €25.6 million.
DCC is actively pursuing further acquisitions in each of its core areas.
Financial strength
Operating cash flow in the period of €90.3 million was an excellent 172.6% ahead
of the prior year. This was helped by a reduction of €17.0 million in net
working capital since 31 March 2007 to €168.4 million, which equates to 11 days
revenue and compares favourably with 13 days at 30 September 2006. At 30
September 2007, the Group had net debt of €174.0 million and total equity of
€633.2 million.
DCC's strong financial position leaves it well placed to pursue its organic and
acquisition growth objectives.
Exceptional items
Exceptional charges in the period totalled €55.7 million.
As announced on 27 July 2007, the Irish Supreme Court allowed the appeal by
Fyffes plc ('Fyffes') which they made against one finding of the Irish High
Court judgment delivered in December 2005. That judgment had found in favour
of DCC and others in the case taken against them by Fyffes under Part V of the
Irish Companies Act, 1990 ('the Act'), seeking an account of profits arising on
the sale of 31,169,493 shares in Fyffes in February 2000 by a DCC Group
subsidiary. Four counterparties lodged claims under Part V of the Act stating
that in the event that Fyffes was successful in its claim they would be entitled
to compensation for losses suffered by them on Fyffes shares purchased by them
from the DCC Group. DCC has been legally advised that Part V of the Act provides
that any amount awarded to the counterparties will be deducted from any amount
awarded to Fyffes. The Supreme Court has listed the matter for further
directions (including on costs) on 13 November 2007 and is expected to remit
to the High Court the quantification of any liability of the DCC Group to the
claimants under Part V of the Act.
As the quantification of any liability is expected to be a matter for the High
Court to determine, the Directors have taken legal advice on the exceptional
charge that should be made in the accounts in order to provide adequately for
any liability that might arise from the High Court hearing and also for costs.
On this basis an exceptional charge of €50 million has been made in the accounts
for the period.
Other exceptional charges of €5.7 million primarily related to restructuring
costs on the integration of the recently acquired CPL Petroleum into DCC's
British oil distribution business.
Outlook
DCC has had a strong start to the seasonally more significant second half and
the Board now expects high teen growth in operating profit for the full year
which is ahead of current market expectations.
This announcement and further information on DCC is available on the web at
www.dcc.ie
Operating review
DCC Energy
2007 2006 Change on prior year
Revenue €1,343.5m €996.3m +34.8%
Operating profit €14.5m €11.7m +23.9%
DCC Energy achieved excellent profit growth in the first half of the year with
the business benefiting from strong organic growth and the first time
contribution from acquisitions completed in the prior year. The result is
particularly pleasing considering the exceptionally mild weather encountered in
April, a seasonally important trading month for the business.
DCC Energy sold 1.7bn litres of product, an increase of 26.9% on the prior year,
further strengthening its position as the leading oil and LPG distributor in
Britain and Ireland.
DCC Energy's oil business performed particularly well. In Britain the business
benefited from its increased scale and, in particular, its expanded national
infrastructure which allowed it to grow its business in the national account and
transport fuels segments of the market. The acquisition of CPL Petroleum Ltd
was another important step in DCC's strategy of consolidating the highly
fragmented oil distribution market in Britain and it is currently being integrated
into the existing business. The LPG business performed satisfactorily.
DCC's fuel card business performed strongly in the first half, with the business
benefiting from its extensive portfolio of branded fuel cards.
DCC Energy is well placed to achieve strong profit growth in the seasonally more
significant second half of the financial year.
DCC SerCom
2007 2006 Change on prior year
Revenue €575.6m €529.2m +8.8%
Operating profit €12.5m €10.5m +18.8%
Operating margin 2.2% 2.0%
DCC SerCom achieved excellent profit growth in the first half of the year, with
good revenue growth in both SerCom Distribution and SerCom Solutions.
SerCom Distribution, the IT & consumer electronics business, generated good
sales growth, particularly in consumer electronic products in Britain and
Ireland and in the Continental European enterprise infrastructure business. The
PC and printer market was more difficult, however, with ongoing price deflation.
SerCom Solutions, the procurement and supply chain management business, had an
excellent first half due to increased demand from key customers in Ireland,
Poland and the US and due to its growing procurement business in China.
It is expected that DCC SerCom will achieve strong profit growth in the second
half of the financial year.
DCC Healthcare
2007 2006 Change on prior year
Revenue €132.3m €112.2m +17.9%
Operating profit €10.4m €9.7m +6.5%
Operating margin 7.8% 8.7%
DCC Healthcare recorded good profit growth in the first half of the year.
Fannin's compounding services to Irish hospitals delivered strong growth and
benefited from the national contract for paediatric nutrition won in September
last year. Fannin also continued to achieve excellent organic growth in
intravenous pharmaceuticals and related services into the acute care sector in
Ireland and Britain. Sales of medical/surgical equipment in Ireland showed
stronger than expected growth in the first half.
DCC Mobility and Rehab had an improved performance, benefiting from good sales
growth in Britain and from the first time contribution of Ausmedic, the leading
supplier of physiotherapy products in Australia and New Zealand, which has
performed in line with expectations since acquisition in March 2007.
The performance of DCC Health and Beauty Solutions was impacted by increased
costs associated with capacity expansion and new product development on behalf
of customers and also a weaker market.
DCC Healthcare expects to achieve good profit growth in the second half of the
financial year.
DCC Environmental
2007 2006 Change on prior year
Revenue €45.8m €29.1m +57.5%
Operating profit €7.2m €4.6m +56.7%
Operating margin 15.8% 15.9%
DCC Environmental achieved excellent profit growth driven by a particularly
strong performance from its UK based recycling and waste management activities.
William Tracey, in which DCC acquired a 50% shareholding in May 2006, performed
strongly in the period and has further strengthened its position as Scotland's
leading recycling and waste management business.
Wastecycle, the Nottingham based waste management and recycling business in
which DCC Environmental acquired a 90% shareholding in November 2006, has
experienced strong organic profit growth across all parts of its business.
Enva, DCC's Irish environmental business, achieved modest profit growth in the
first half.
DCC Environmental is anticipating strong profit growth in the second half of
the financial year based on the growth momentum in both William Tracey and
Wastecycle and the underlying positive dynamics within the UK recycling and
waste management industry.
DCC Food & Beverage
2007 2006 Change on prior year
Revenue €161.5m €136.5m +18.3%
Operating profit €7.0m €7.3m - 4.3%
Operating margin 4.3% 5.3%
DCC Food & Beverage achieved good growth in its healthfoods and indulgence
businesses in Ireland. This positive performance was offset by difficulties
in the frozen and chilled logistics business.
In Ireland, good growth was achieved in healthfoods, which continues to benefit
from ongoing increased investment in the Kelkin brand and new product development.
Coffee, speciality teas, snackfoods and confectionery also performed well.
The frozen and chilled logistics business has experienced start up difficulties
in a significant new logistics contract which impacted negatively on performance
in the first half.
There was modest growth in the small British wine business.
DCC Food & Beverage is expecting operating profits in the second half of the
financial year to be broadly in line with the comparative period in the prior
year. While continued growth is expected in the healthfoods and indulgence
businesses, the new contract in the frozen and chilled logistics business will
have some continuing impact and there will be ongoing pressure on margins in the
British wine market.
Forward-looking statements
This announcement contains some forward-looking statements that represent DCC's
expectations for its business, based on current expectations about future
events, which by their nature involve risks and uncertainties. DCC believes that
its expectations and assumptions with respect to these forward-looking
statements are reasonable. However, because they involve risk and uncertainty,
which are in some cases beyond DCC's control, actual results or performance may
differ materially from those expressed or implied by such forward-looking
information.
Principal Risks and Uncertainties
Under the Transparency (Directive 2004/109/EC) Regulations 2007 the Group is
required to give a description of the principal risks and uncertainties it
faces.
The principal risks and uncertainties faced by the Group's businesses relate to
the economic environment in Ireland, Britain and Continental Europe. The level
of activity in these markets is sensitive to economic conditions generally,
including, inter alia, economic growth, interest rates, foreign currency
exchange rates and inflation. DCC Energy is exposed to commodity price risk in
its LPG and oil distribution businesses and weather conditions have an impact on
the demand for DCC Energy's products.
Statement of the Directors in respect of the half yearly financial report
We confirm our responsibility for the half yearly financial statements and that
to the best of our knowledge:
1. the condensed set of financial statements comprising the condensed income
statement, the condensed statement of recognised income and expense, the
condensed balance sheet and the related notes have been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by the EU;
2. the interim management report includes a fair review of the information
required by:
Regulation 8(2) of the Transparency (Directive 2004/109/EC) Regulations 2007,
being an indication of important events that have occurred during the first
six months of the financial year and their impact on the condensed set of
financial statements; and a description of the principal risks and
uncertainties for the remaining six months of the year; and
Regulation 8(3) of the Transparency (Directive 2004/109/EC) Regulations 2007,
being related party transactions that have taken place in the first six months
of the current financial year and that have materially affected the financial
position or performance of the entity during that period; and any changes in
the related party transactions described in the last annual report that could
do so.
The Group's auditors have not reviewed these condensed financial statements.
On behalf of the Board
Jim Flavin Tommy Breen
Executive Chairman Group Managing Director
12 November 2007
Group Condensed Income Statement
for the six months ended 30 September 2007
Unaudited 6 months ended Unaudited 6 months ended Audited year ended
30 September 2007 30 September 2006 31 March 2007
------------------------------------ --------------------------------- ---------------------------------
Pre Exceptionals Pre Pre
exceptionals (note 4) Total exceptionals Exceptionals Total exceptionals Exceptionals Total
Notes €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
Revenue 3 2,258,736 2,258,736 1,803,345 1,803,345 4,046,118 4,046,118
Cost of sales (1,985,788) (1,985,788) (1,572,214) (1,572,214) (3,544,403) (3,544,403)
Gross profit 272,948 272,948 231,131 231,131 501,715 501,715
Operating costs (221,328) (55,726) (277,054) (187,234) (961) (188,195) (361,631) 24,516 (337,115)
Operating (loss)/
profit before
amortisation of
intangible assets 51,620 (55,726) (4,106) 43,897 (961) 42,936 140,084 24,516 164,600
Amortisation of
intangible assets (3,608) (3,608) (3,135) (3,135) (6,660) (6,660)
Operating
(loss)/
profit 3 48,012 (55,726) (7,714) 40,762 (961) 39,801 133,424 24,516 157,940
Finance costs
(net) (7,450) (7,450) (5,444) (5,444) (10,850) (10,850)
Share of
associates'
profit after
tax 305 305 6,091 6,091 14,710 14,710
(Loss)/profit 40,867 (55,726) (14,859) 41,409 (961) 40,448 137,284 24,516 161,800
before tax
Income tax
expense (4,026) (4,026) (4,161) (4,161) (12,995) (7,700) (20,695)
(Loss)/profit
after tax
for the
financial
period 36,841 (55,726) (18,885) 37,248 (961) 36,287 124,289 16,816 141,105
(Loss)/profit
attributable to:
Equity holders
of the
Company (19,470) 35,827 140,186
Minority interests 585 460 919
(Loss)/profit
after tax
for the
financial
period (18,885) 36,287 141,105
(Loss)/earnings
per ordinary share
Basic 5 (24.21c) 44.61c 174.59c
Diluted 5 (23.68c) 43.70c 170.83c
Adjusted earnings
per ordinary share
Basic 5 48.52c 48.95c 160.02c
Diluted 5 47.48c 47.95c 156.58c
Group Condensed Balance Sheet
as at 30 September 2007
Unaudited Unaudited Audited
30 Sept. 30 Sept. 31 March
2007 2006 2007
Note €'000 €'000 €'000
ASSETS
Non-current assets
Property, plant and equipment 331,567 297,422 319,621
Intangible assets 395,651 294,180 321,369
Investments in associates 5,131 82,440 90,332
Deferred income tax assets 5,922 6,937 8,305
Derivative financial instruments 4,685 5,678 3,091
742,956 686,657 742,718
Current assets
Inventories 180,943 156,795 177,450
Trade and other receivables 676,720 525,471 597,257
Derivative financial instruments 303 93 51
Cash and cash equivalents 524,622 296,584 337,079
1,382,588 978,943 1,111,837
Assets held for sale 85,506 - -
Total assets 2,211,050 1,665,600 1,854,555
EQUITY
Capital and reserves attributable to
the Company's equity holders
Equity share capital 22,057 22,057 22,057
Share premium account 124,687 124,687 124,687
Other reserves 1,400 1,400 1,400
Other reserves - share options 5,634 3,902 4,807
Cash flow hedge reserve 68 (2,470) (117)
Foreign currency translation reserve (10,440) (1,265) (2,914)
Retained earnings 486,149 438,033 531,994
Minority interests 3,646 4,266 5,816
Total equity 7 633,201 590,610 687,730
LIABILITIES
Non-current liabilities
Borrowings 438,675 286,267 268,579
Derivative financial instruments 55,213 33,384 45,944
Deferred income tax liabilities 14,244 11,854 14,748
Retirement benefit obligations 17,847 20,069 16,372
Provisions for liabilities and charges 5,929 6,110 6,122
Deferred acquisition consideration 14,072 13,447 18,523
Capital grants 2,206 2,497 2,393
Total non-current liabilities 548,186 373,628 372,681
Current liabilities
Trade and other payables 749,665 533,658 601,404
Current income tax liabilities 55,823 43,319 50,849
Borrowings 209,357 107,009 125,978
Derivative financial instruments 350 2,905 236
Provisions for liabilities and charges 5,160 5,469 4,807
Deferred acquisition consideration 9,308 9,002 10,870
Total current liabilities 1,029,663 701,362 794,144
Total liabilities 1,577,849 1,074,990 1,166,825
Total equity and liabilities 2,211,050 1,665,600 1,854,555
Net debt 8 (173,985) (127,210) (100,516)
Group Condensed Cash Flow Statement
for the six months ended 30 September 2007
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2007 2006 2007
€'000 €'000 €'000
Cash flows from operating activities
Group operating profit before
exceptional items 48,012 40,762 133,424
Depreciation 22,099 17,512 39,461
Share-based payments expense 827 510 1,415
Amortisation of intangible assets 3,608 3,135 6,660
Decrease/(increase) in working capital 16,965 (26,068) (49,656)
Profit on disposal of property, plant
and equipment (96) (1,028) (1,362)
Amortisation of capital grants (141) (122) (276)
Dividends received from associates - - 268
Other (969) (1,571) (2,513)
Cash generated from operations 90,305 33,130 127,421
Exceptional items (5,307) (1,200) (4,916)
Interest paid (13,906) (11,380) (29,331)
Income tax (paid)/received (2,641) 472 (10,058)
Net cash flows from operating activities 68,451 21,022 83,116
Cash flows from investing activities
Inflows
Proceeds from disposal of fixed assets 1,043 2,331 44,394
Interest received 8,712 6,448 20,211
9,755 8,779 64,605
Outflows
Purchase of property, plant and
equipment (33,237) (24,176) (60,651)
Acquisition of subsidiaries (82,628) (57,507) (100,213)
Purchase of minority interests (30) (1,276) (1,276)
Deferred acquisition consideration paid (9,342) (4,153) (4,176)
(125,237) (87,112) (166,316)
Net cash flows from investing activities (115,482) (78,333) (101,711)
Cash flows from financing activities
Inflows
Proceeds from issue of shares 1,280 4,274 6,098
Increase in interest-bearing loans
and borrowings 190,380 34,058 56,303
Increase in finance lease liabilities 266 2,602 3,545
191,926 40,934 65,946
Outflows
Share buyback - (18,818) (18,818)
Repayment of interest-bearing loans
and borrowings (30,549) (170) (1,240)
Repayment of finance lease
liabilities (664) (71) (4,801)
Dividends paid to equity holders of
the Company (25,258) (22,044) (36,381)
Dividends paid to minority interests (2,725) (14) (38)
(59,196) (41,117) (61,278)
Net cash flows from financing activities 132,730 (183) 4,668
Change in cash and cash equivalents 85,699 (57,494) (13,927)
Translation adjustment (9,294) 3,818 4,196
Cash and cash equivalents at
beginning of period 310,187 319,918 319,918
Cash and cash equivalents at
end of period 386,592 266,242 310,187
Cash and cash equivalents consists of:
Cash at bank and short term deposits 524,622 296,584 337,079
Overdrafts (138,030) (30,342) (26,892)
386,592 266,242 310,187
Group Condensed Statement of Recognised Income and Expense
for the six months ended 30 September 2007
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2007 2006 2007
€'000 €'000 €'000
Items of (expense)/income recognised
directly within equity:
Currency translation (7,526) 9,079 7,430
Group defined benefit pension schemes:
- actuarial (loss)/gain (2,757) (932) 1,576
- movement in deferred tax asset 347 236 (169)
Gains/(losses) relating to cash flow
hedges (net) 211 (2,490) (159)
Deferred tax recognised through equity (13) 13 47
Net (expense)/income recognised
directly within equity (9,738) 5,906 8,725
(Loss)/profit after tax for the
period (18,885) 36,287 141,105
Total recognised expense and income
for the period (28,623) 42,193 149,830
Attributable to:
Equity holders of the Company (29,208) 41,733 148,911
Minority interests 585 460 919
Total recognised expense and income
for the period (28,623) 42,193 149,830
Notes to the Interim Results
for the six months ended 30 September 2007
1. Basis of Preparation
The financial information presented in this Interim Report has been prepared in
accordance with the Group's accounting policies under International Financial
Reporting Standards (IFRS) as set out in the financial statements for the year
ended 31 March 2007.
The interim financial statements for the six months ended 30 September 2007 and
the comparative figures for the six months ended 30 September 2006 are
unaudited. The summary financial statements for the year ended 31 March 2007
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.
Comparative Amounts
It had been DCC's policy to allocate Group central costs against operating
profit and against the share of profit after tax of associates. In the current
year, DCC has allocated all Group central costs against operating profit. For
consistency, the comparative divisional operating profit and total operating
profit and share of profit after tax of associates for the six months ended 30
September 2006 and for the year ended 31 March 2007 have been amended to reflect
the accounting approach adopted in the current year. As a result the comparative
operating profit amounts for these periods have been reduced by €1.3 million and
by €2.9 million respectively and the Group's share of profit after tax of
associates has been increased by €1.3 million and by €2.9 million respectively.
These adjustments have no impact on the profit before tax or earnings per share
previously reported for the six months ended 30 September 2006 and for the year
ended 31 March 2007.
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:
6 months 6 months Year
ended ended ended
30 Sept. 30 Sept. 31 March
2007 2006 2007
€1=Stg£ €1=Stg£ €1=Stg£
Balance sheet (closing rate) 0.698 0.677 0.680
Profit and loss (average rate) 0.678 0.688 0.680
3. Analysis of Revenue and Operating Profit by Business Segment
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2007 2006 2007
Revenue €'000 €'000 €'000
DCC Energy 1,343,461 996,325 2,247,858
DCC SerCom 575,609 529,245 1,218,047
DCC Healthcare 132,270 112,157 234,276
DCC Environmental 45,853 29,112 66,466
DCC Food & Beverage 161,543 136,506 279,471
Revenue 2,258,736 1,803,345 4,046,118
Of which acquisitions contributed 61,263 129,923 411,207
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2007 2006 2007
Operating (Loss)/Profit €'000 €'000 €'000
DCC Energy 14,528 11,724 59,486
DCC SerCom 12,492 10,513 32,603
DCC Healthcare 10,367 9,736 22,485
DCC Environmental 7,248 4,626 10,445
DCC Food & Beverage 6,985 7,298 15,065
51,620 43,897 140,084
Amortisation of intangible assets (3,608) (3,135) (6,660)
Operating exceptional items (55,726) (961) 24,516
Operating (loss)/profit (7,714) 39,801 157,940
Of which acquisitions contributed - 3,616 10,586
4. Exceptional Items
Unaudited
6 months
ended
30 Sept.
2007
€'000
Estimated charge for claims under
Part V of the Companies Act, 1990 (50,000)
Restructuring and other costs (5,726)
---------
(55,726)
As announced on 27 July 2007, the Irish Supreme Court allowed the appeal by
Fyffes plc ('Fyffes') which they made against one finding of the Irish High
Court judgment delivered in December 2005. That judgment had found in favour
of DCC and others in the case taken against them by Fyffes under Part V of the
Irish Companies Act, 1990 ('the Act'), seeking an account of profits arising on
the sale of 31,169,493 shares in Fyffes in February 2000 by a DCC Group
subsidiary. Four counterparties lodged claims under Part V of the Act stating
that in the event that Fyffes was successful in its claim they would be entitled
to compensation for losses suffered by them on Fyffes shares purchased by them
from the DCC Group. DCC has been legally advised that Part V of the Act provides
that any amount awarded to the counterparties will be deducted from any amount
awarded to Fyffes. The Supreme Court has listed the matter for further
directions (including on costs) on 13 November 2007 and is expected to remit to
the High Court the quantification of any liability of the DCC Group to the
claimants under Part V of the Act.
As the quantification of any liability is expected to be a matter for the High
Court to determine, the Directors have taken legal advice on the exceptional
charge that should be made in the accounts in order to provide adequately for
any liability that might arise from the High Court hearing and also for costs.
On this basis an exceptional charge of €50 million has been made in the accounts
for the period.
Other exceptional charges of €5.7 million primarily related to restructuring
costs on the integration of the recently acquired CPL Petroleum into DCC's
British oil distribution business.
5. 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
2007 2006 2007
€'000 €'000 €'000
(Loss)/profit after taxation and
minority interests (19,470) 35,827 140,186
Amortisation of intangible assets
after tax 2,775 2,521 5,119
Exceptional items 55,726 961 (16,816)
Adjusted profit after taxation and
minority interests 39,031 39,309 128,489
Basic earnings per ordinary share cent cent cent
Basic (loss)/earnings per ordinary
share (24.21c) 44.61c 174.59c
Adjusted basic earnings per ordinary
share* 48.52c 48.95c 160.02c
Weighted average number of ordinary
shares in issue ('000) 80,436 80,311 80,294
Diluted earnings per ordinary share cent cent cent
Diluted (loss)/earnings per ordinary
share (23.68c) 43.70c 170.83c
Adjusted diluted earnings per ordinary
share* 47.48c 47.95c 156.58c
Diluted weighted average number of
ordinary shares in issue ('000) 82,208 81,976 82,061
*adjusted to exclude amortisation of intangible assets and exceptional items.
Adjusted earnings per ordinary share excluding the prior year contribution from
Manor Park Homebuilders Limited
The adjusted earnings per ordinary share, excluding the contribution from Manor
Park Homebuilders Limited of €5.230 million, for the six months ended 30
September 2006 was 42.43 cent (€13.256 million and 143.51 cent respectively for
the year ended 31 March 2007).
6. Dividends
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2007 2006 2007
€'000 €'000 €'000
Interim - paid 17.87 cent per share on
8 December 2006 - - 14,337
Final - paid 31.41 cent per share on
26 July 2007
(paid 27.31 cent per share on 14 July 2006) 25,258 22,044 22,044
------- ------ ------
25,258 22,044 36,381
On 9 November 2007, the Board approved an interim dividend of 20.55 cent per
share (2006/2007 interim dividend: 17.87 cent per share). These interim accounts
do not reflect this dividend payable.
7. Movement in Total Equity
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2007 2006 2007
€'000 €'000 €'000
At beginning of period 687,730 585,403 585,403
Issue of share capital 1,280 4,274 6,098
Share based payment 827 510 1,415
Share buyback - (18,818) (18,818)
Dividends (25,258) (22,044) (36,381)
Movement in minority interest (2,170) (448) 1,102
Total recognised expense and income
for the period attributable to equity
holders (29,208) 41,733 148,911
At end of period 633,201 590,610 687,730
8. Analysis of Net Debt
Unaudited Unaudited Audited
30 Sept. 30 Sept. 31 March
2007 2006 2007
€'000 €'000 €'000
Non-current assets:
Derivative financial instruments 4,685 5,678 3,091
Current assets:
Derivative financial instruments 303 93 51
Cash and term deposits 524,622 296,584 337,079
524,925 296,677 337,130
Non-current liabilities:
Borrowings (3,110) (8,170) (3,117)
Derivative financial instruments (55,213) (33,384) (45,944)
Unsecured Notes due 2008 to 2019 (435,565) (278,097) (265,462)
(493,888) (319,651) (314,523)
Current liabilities:
Borrowings (209,357) (107,009) (125,978)
Derivative financial instruments (350) (2,905) (236)
(209,707) (109,914) (126,214)
Net debt (173,985) (127,210) (100,516)
Including Group share of joint
ventures' net cash 3,678 4,508 5,243
During the period, to further strengthen the Group's long term capital structure,
DCC completed its third private placement of Senior Unsecured Loan Notes to a
limited number of institutional investors primarily in the US. In summary, the
Group raised the equivalent of €186.5 million, comprising Stg£25.0 million at 10
year maturity and $200.0 million, of which $43.0 million had a 10 year maturity
and $157.0 million had a 12 year maturity. Both the sterling and the dollar debt
were swapped to floating sterling rates using interest rate and cross currency
swaps.
Part of the proceeds has been used to finance acquisitions and repay short term
sterling debt.
9. Business Combinations
The principal acquisitions completed by the Group during the period were the
acquisitions of CPL Petroleum Ltd, a UK based oil distribution business, and a
number of smaller LPG and oil distribution businesses. The initial assignments
of fair values to identifiable net assets acquired have been performed on a
provisional basis.
10. Seasonality of Operations
The Group's operations are significantly second-half weighted primarily due to
a portion of the demand for DCC Energy's products being weather dependent and
seasonal buying patterns in SerCom Distribution.
11. Distribution of Interim Report
This report and further information on DCC is available at the Company's website
www.dcc.ie. 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, Ireland.
This information is provided by RNS
The company news service from the London Stock Exchange
Monday, 20th May 2024
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