DCC boss Breen puts Euro deals at top of list
DCC will continue to deploy the most of its acquisition capital in Europe over the next 18 months as it eyes opportunities to expand its fuel activities in the region, according to outgoing CEO Tommy Breen.
The Irish FTSE-100 company – which also has technology and medical distribution businesses – announced last month that it had made its first every foray outside Europe, agreeing to buy Shell’s LPG activities in Hong Kong and Macau in a deal that places a £120m enterprise value on the business.
“We do believe there’ll be an opportunity in southeast Asia to build a bigger LPG business, but that’s in the medium term,” Mr Breen told the Irish Independent.
“We’re not saying that the only acquisitions will be in Europe, but in the next 12 to 18 months the likelihood is that there’s still plenty of opportunity for us in Europe and that’s where the lion’s share of the capital will go.”
DCC committed £554m (€645.3m) to acquisitions in the past financial year.
In February it announced plans to buy Esso’s 142-strong company-owned forecourt chain in Norway for €273m. In January, DCC bought 97pc of France’s Gaz Europeen.
Mr Breen was speaking as DCC reported full year results, with its operating profit rising 21pc to £345m (€402m) as it benefited from a euro translation effect given the weakness of sterling. On a constant currency basis, operating profits were 13pc higher.
Revenue in the 12 months to the end of March, excluding fuel, rose 9pc to £3.2bn (€3.7bn). The company plans to raise its final dividend by 16.3pc, resulting in a 15pc rise in the total dividend for the year. Including fuel sales, revenue was up 17.4pc to £12.2bn (€14.2bn).
Despite what analysts said were good results and strong cash flow generation by DCC, shares in the company fell more than 3pc soon after the opening bell in London.
The group’s fuel sale volumes in the financial year rose 12.5pc to 14.6bn litres and its operating profit at its energy division – its biggest unit – rose 24.3pc to £254.9m (€297m).
The company benefited from the full-year inclusion of the Butagaz LPG business and Esso’s unmanned motorway service stations it acquired in France in 2015.
DCC also said that from now on it will report its LPG and Retail & Oil activities as two separate divisions.
Mr Breen will be succeeded as CEO In July by Donal Murphy, who was managing director of DCC Energy.
Mr Murphy said that DCC will expand its LPG presence in France through organic growth as the market there is already consolidated.
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