12th Sep 2005 12:45
DCC PLC12 September 2005 Trading and Outlook Statement The Board of DCC wishes to update the market on trading and growth expectationsfor the DCC Group for the current financial year to 31 March 2006. DCC's Energy,Healthcare, Food & Beverage and Environmental divisions and Other activities,which are budgeted to contribute over 80% of the Group's operating profit, areexpected to perform broadly in line with market expectations. However, followinga significant deterioration in trading conditions in July and August in DCC's ITDistribution division, which contributed 21% of the Group's operating profit inthe last financial year, the Board now expects mid single-digit growth in DCC'sadjusted earnings per share in the current financial year. IT Distribution The tough trading conditions experienced in DCC's IT Distribution division sincelate 2004 further deteriorated in July and August 2005. The UK software distribution business, Gem Distribution, has been particularlyimpacted by the sharp decline in retail consumer expenditure on technology andentertainment products in July and August. While it is anticipated that thegames market will benefit from the forthcoming release of the Microsoft Xbox 360console later this year, this is not expected to have a material impact in thecurrent financial year. In addition, very difficult trading conditions in the IThardware market and continuing severe product price deflation are impacting both Micro Peripherals and Distrilogie, DCC's UK and Continental European IT distribution businesses. It is expected that the IT Distribution division's operating profits willdecline by approximately 45% in the first half of the financial year comparedwith the first half of the prior year. However, with the benefit of the profitcontribution from the recently acquired Pilton Group, which is performing inline with expectations, the division is expected to earn broadly similar profitsin the second half compared with the second half of the prior year. As the peaktrading period approaches, management is very focused on driving sales growthand on margin and cost management. Interim Results for the six months ended 30 September 2005 In light of the difficult trading in the IT Distribution business along withthe budgeted first time impact of the seasonally loss-making Shell Direct UKbusiness, which was acquired in October 2004, DCC's adjusted earnings per share for the first half of the year is expected to decline by approximately 10%. Outlook The Board expects that the Group will resume double-digit earnings growth in theseasonally more important second half of the current financial year. For reference: Jim Flavin, Chief Executive / Deputy ChairmanFergal O'Dwyer, Chief Financial OfficerDonal Murphy, Managing Director - IT DistributionKieran Conlon, Investor Relations Manager Tel.: +353 1 2799 400Email: [email protected]: www.dcc.ie For Editors: DCC is a sales, marketing and business support services group focused on theenergy, IT, healthcare, food & beverage and environmental markets, operatingprincipally in Britain and Ireland. In its latest financial year to 31 March2005, DCC had sales of €2.7 billion and operating profits of €131.5 million.DCC's shares are traded on the Irish and London Stock Exchanges. For further information please visit www.dcc.ie. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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