17th Feb 2014 09:39
LONDON (Alliance News) - DCC Group PLC said Monday its SerCom and Healthcare divisions performed well in the fourth quarter but has reduced its growth expectations for the full-year after its Energy business continued to be impacted by mild weather.
In an interim management statement, DCC said group operating profit for the third quarter to December 31 2013 was ahead of the previous year, driven primarily by strong growth in DCC SerCom and DCC Healthcare, partially offset by a decline in DCC Energy.
Within the DCC Energy division - the group's largest business - the firm said operating profit lagged behind 2012 and was more significantly behind budget as volumes and margins were hit by the milder weather conditions across northern Europe, particularly in December when average temperatures were above the 10-year average.
Operating profit in DCC SerCom was strongly ahead of the previous year and generated strong revenue growth, driven by mobile computing and communications products in Britain, said DCC.
The Healthcare arm also performed well, with operating profit substantially ahead of 2012, as it continued to benefit from a strong performance in DCC Health & Beauty Solutions and from the acquisition of Kent Pharmaceuticals, which was completed in February 2013.
The firm said its Environmental and Food & Beverage divisions traded modestly ahead of the prior year.
The third quarter figures resulted in the group's operating profit and adjusted earnings per share for the nine months ended December 31 2013 being well ahead of the prior year.
The fourth quarter, DCC's most significant of the year, is heavily influenced by the Energy division, said the company, noting that the particularly mild weather in December 2013 continued into calendar 2014 with temperatures in January again well above the 10 year average, negatively affecting trading in the business. DCC notes however that implementation of a number of operational efficiencies earlier in the year have helped to mitigate the impact of the milder winter weather.
Looking ahead, the firm has reduced its expectations - noting that its guidance is set against the assumption that there will be normal weather conditions for the balance of the quarter. DCC now anticipates that both operating profit and adjusted earnings per share for the year to March 31 2014 will be in the range of 7% - 10% ahead of the prior year, down from the previously expected 15% and 13% ahead, respectively.
The firm said it has committed GBP66 million to acquisition opportunities since September end last year and has recently agreed to acquire Qstar Försäljning AB, a Swedish unmanned retail petrol station company, along with its related fuel distribution and fuel card businesses, Qstar, in a GBP40 million deal.
Together with acquisition expenditure of GPB19 million committed in the Group's first-half ended September 30 2013, total committed acquisition expenditure for the year to date is GBP85 million.
Shares in DCC were trading up 1.62% at 2,830 pence per share Monday, one of the biggest gainers on the FTSE 250.
By Alice Attwood; [email protected]; @AliceAtAlliance
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