27th Sep 2018 14:54
LONDON (Alliance News) - DCC PLC on Thursday said first half operating profit will be well ahead of the prior year, as it made a Canadian acquisition and set out to raise new capital by placing up to 8.9 million new ordinary shares through an accelerated bookbuild process.
The UK sales, marketing and support services group said operating profit for the six months ending September 30 was driven by acquisitions completed in the prior year and good trading across all business divisions. It has reiterated that year to March 31, 2019, will be another year of profit growth and development.
The company placed 8.9 million new ordinary shares at a price of 6,800 pence per share, raising gross proceeds of GBP606 million. The placing price represents a discount of 1.5% to the intra-day price on Thursday.
Shares in DCC were trading 4.0% lower at 7,015.00 pence each on Thursday afternoon.
The share placing represents up to 10% of the existing issued share capital of the company. Net placing proceeds will be used by DCC for acquisitions and to enhance its balance sheet and liquidity.
In one such acquisition, DCC said Thursday it has bought Montreal, Canada-based audio and musical instruments sector focused sales, marketing and services business Jam Group of Companies for USD170 million, or around GBP130 million.
DCC expects the Jam Group acquisition to be 4.5% earnings per share accretive from completion and to generate a return on capital employed of 15% in the first full year of ownership. The acquisition significantly strengthens DCC Technology unit's presence in the North American market.
Jam Group recorded revenue of USD323 million in the year ended April 30 and employs around 570 people.
The company is scheduled to release its interim results on November 13.
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