DCC expects further growth as acquisitions boost energy division – The Irish Times

Irish distribution and services group DCC said it continued to grow in the first quarter of its financial year, with group operating profit rising and acquisitions driving growth in its energy division.

In a trading update for the three months ended June 30, DCC said overall operating profit was “marginally higher” than the same period last year, with increases at DCC Energy and DCC Healthcare. DCC Technology reported a slight year-on-year decline in operating profit.

The first quarter of the year is less seasonal for the company, and the company expects the fiscal year to show strong growth in operating profit.

Growth activity is also expected to continue during the year, with around £65m earmarked for new acquisitions since the results were announced in May. This includes DCC Energy’s acquisition of fleet telematics company Cubo this month and the completion of a transaction with solar photovoltaics (PV) and battery storage expert Wirsol Roof Solutions.

The energy division also completed the acquisitions of Next Energy, Secundo Photovoltaik and Copropriétés Diagnostic during the first fiscal quarter and sold a majority stake in its Hong Kong and Macau liquefied petroleum gas business to Citadel Pacific.

In the second transaction, DCC received $105 million (€96.9 million) in cash, with the remaining $150 million covered by its retained minority stake in the combined operations, which will operate under both the Shell and Exxon brands.

“The sale enhances DCC Energy’s strategic and geographic focus as we deliver on our Cleaner Energy in Your Home strategy,” said CEO Donal Murphy.

Davy analyst Colin Grant said in a note that there is greater upside potential for DCC acquisitions in core markets in Europe and North America.

“This is a positive development given DCC Energy’s focus on services and renewables opportunities in Europe and LPG consolidation in North America. It shows that DCC is recycling capital into higher-growth parts of its portfolio where it makes strategic sense to do so,” he said.

DCC holds its annual general meeting on Thursday. The company has also appointed former Brenntag CEO Steve Holland as a non-executive director, with effect from today.