19th May 2015 06:53
LONDON (Alliance News) - Distribution company DCC Group PLC on Tuesday struck a EUR464 million deal to acquire liquefied petroleum gas company Butagaz SAS from Royal Dutch Shell PLC as the group posted a rise in pretax profit for the year to the end of March.
FTSE 250-listed DCC said the acquisition of Butagaz, which operates in the liquefied petroleum gas cylinder and small bulk market segments, will provide its DCC Energy business with a substantial presence in the French market. It said Butagaz holds a 25% share of the French LPG market.
DCC said it will partly fund the acquisition via the issue of at least 4.2 million shares, raising GBP184.3 million based on its closing price of 4,390 pence on Monday. The remainder of the funding required for the acquisition will come from existing cash resources.
The acquisition came as DCC, in a separate statement, said its pretax profit for the year ended March 31 rose to GBP163.3 million from GBP151 million a year earlier. Revenue for the group fell to GBP10.6 billion from GBP11 million a year earlier, but the company managed to bring down its costs sufficiently to outpace the fall in revenue.
The revenue decline was driven by its DCC Energy business, where revenue fell by 7.5% due to the impact of lower oil prices. Revenue from the rest of the business, excluding DCC Energy, rose by 6.5%, it added.
DCC said it will hike its final dividend by 10%, bringing its total dividend for the year to 84.54 pence per share, also up 10%, from 76.85 pence a year earlier.
"DCC remains ambitious to continue the growth and development of its business. The Group's strategy has always included maintaining a strong and liquid balance sheet to leave it well placed to take advantage of opportunities as they arise," said Chief Executive Tommy Breen.
"At this very early stage, the group anticipates that both operating profit and adjusted earnings per share from continuing activities will be very significantly ahead of the prior year," Breen added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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