DCC has released a trading update for the company’s fiscal first quarter this morning noting that the group as a whole continues to trade in line with management’s expectations.
The group’s main divisions have performed well with the exception of DCC Technology which was modestly behind budget. DCC Energy traded ahead of budget and ahead of last year levels, due to strong performance of the segment’s LPG business. DCC Technology suffered by a weak Tablet market and reduced sales of mobile and smartphone products by a leading supplier. DCC Healthcare performed well with an increase in operating profit being recorded due to the continued strong performance of DCC Vital.
Management are providing qualitative guidance for the current fiscal year that will see operating profit and adjusted earnings per share grow “very significantly”. We don’t envisage making changes to forecasts that will call for a material increase in profitability in the region of 20% during the current fiscal year. Despite near term challenges for the DCC Technology segment, the recent acquisitions of DCC Energy coupled with better operating performance in that division will more than offset and specific IT weakness.
DCC will continue to maintain a very strong balance sheet, which, post the recent equity raise, continues to provide management with ample ability to continue to acquire attractive assets that are accretive to the DCC business model.
David Holohan – Head Of Research
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