DCC Regulatory News (DCC)

5 Feb 2008 07:00

DCC PLC05 February 2008 DCC plc Interim Management Statement DCC plc, the procurement, sales, marketing, distribution and business supportservices group listed on both the Irish and London stock exchanges, is issuingthis Interim Management Statement in accordance with the reporting requirementsof the Transparency Regulations 2007. Quarter to 31 December 2007 DCC had excellent revenue and operating profit growth in its third quarter to 31December 2007 driven by particularly strong growth in DCC Energy, DCC SerCom andDCC Environmental. DCC Food & Beverage results were in line with the Group'sexpectations while DCC Healthcare was impacted by weaker results in its Health &Beauty Solutions business. Relevance of sterling / euro exchange rate It is estimated that sterling profits will represent approximately 63% of DCC'soperating profits in the current financial year and, due to seasonal factors,approximately 73% in the fourth quarter. The sterling exchange rate against theeuro weakened significantly towards the end of the third quarter and hasweakened further in the fourth quarter to date. Outlook for the fourth quarter and the year to 31 March 2008 Taking into account trading in January and the outlook for February and March,strong growth in Group operating profit is anticipated for the fourth quarter.However, the adverse impact of the current sterling / euro exchange rate on thetranslation of DCC's sterling profits into euro will reduce the rate of growth. The translation into euro of expected sterling profits will reduce eurooperating profit by approximately €3 million in the year to 31 March 2008. DCCnow expects to achieve mid to high teen growth in operating profit in the year. Material events and transactions As previously announced, DCC received a dividend of €172 million from Manor ParkHomebuilders Limited ('Manor Park') on 18 December 2007 and subsequentlydisposed of its 49% shareholding in Manor Park for a cash consideration of €9million. The original cost of investment in Manor Park in February 1980 was €56,000(IR£44,100). In addition to the dividend of €172 million received on 18 December2007, DCC had in earlier years received dividends amounting in total toapproximately €10 million. The total profit on cost was therefore €191 million.The book carrying value of the investment in Manor Park, having taken account ofDCC's share of post acquisition profits, was €86 million, which gave rise to aprofit of €95 million over book value. DCC announced on 12 November 2007 that it had reached conditional agreement toacquire Banque Magnetique SAS, a French company based in Paris, which is aleading distributor of consumer electronic products and IT peripherals to theFrench retail market, for a cash cost of €38.1 million, made up of considerationof €12.5 million and net debt of €25.6 million. The acquisition was completed on20 December 2007. As announced on 23 November 2007, DCC Healthcare has expanded its presence inBritain through the acquisition of Squadron Medical Limited ('Squadron') for aninitial consideration of €16 million and further consideration of up to €12million, dependant on future profits. Based in Chesterfield, Squadron procuresand supplies medical and surgical products on a just in time basis to point ofuse within hospitals. Squadron is well positioned for continued strong growth inthe British hospital supply sector. DCC is actively pursuing further acquisitions in each of its core areas, with aparticular focus on DCC's energy, healthcare and environmental servicesbusinesses. Net exceptional profit Arising from the dividend from Manor Park and the profit on its subsequentdisposal and after allowing for exceptional costs, the most material of whichrelates to the exceptional charge of €50 million made in the six months to 30September 2007 in relation to the Fyffes action, DCC expects to report anoverall Group exceptional profit for the year to 31 March 2008 of approximately€34 million. Financial position After the expenditure on recent acquisitions, the financing of increased workingcapital arising from substantial revenue growth and seasonal factors, thereceipt of the dividend from Manor Park and the proceeds of its subsequent sale,the current Group net debt is approximately €250 million. In line with normalseasonal working capital patterns, it is expected that the net debt at the yearend will be significantly lower. Potential impact of sterling / euro exchange rate in the year to 31 March 2009 Based on current exchange rates, the adverse impact of the translation into euroof estimated sterling profits in the year to 31 March 2009 would be approximately €12 million in that year. Jim Flavin, Executive Chairman of DCC plc, commented: "We achieved accelerated operating profit growth in the quarter to 31 December2007 and we expect strong growth in the final quarter. The weakness of sterlingis not helpful but DCC is well positioned, both commercially and financially, tomaintain its record of growth since listing in 1994." Financial calendar DCC expects to announce its preliminary results for the year to 31 March 2008 onMonday, 19 May 2008. For reference: Jim Flavin, Executive Chairman Telephone: + 353 1 2799400Tommy Breen, Group Managing Director Email: investorrelations@dcc.ieFergal O'Dwyer, Chief Financial Officer Web: www.dcc.ieConor Murphy, Investor Relations Manager About DCC plc: DCC plc is a procurement, sales, marketing, distribution and business supportservices group headquartered in Dublin with international operations across fourcontinents. DCC has five divisions - DCC Energy, DCC SerCom, DCC Healthcare, DCCEnvironmental and DCC Food & Beverage. In its last financial year to 31 March2007, DCC had sales of €4.046 billion and operating profits of €140.1 millionand currently employs approximately 7,000 people in 16 countries. DCC's sharesare listed on both the Irish and London stock exchanges under Business SupportServices. This information is provided by RNS The company news service from the London Stock Exchange