REG - DCC PLC - Results for the six months ended 30 September 2021
09/11/2021 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20211109:nRSI7214Ra&default-theme=true
RNS Number : 7214R DCC PLC 09 November 2021
9 November 2021
DCC Delivers Strong Growth in First Half
DCC, the leading international sales, marketing and support services group,
today announces its results for the six months ended 30 September 2021.
Financial highlights: 2021 2020 % change % change CC(1)
Revenue £7.518bn £5.931bn +26.8% +29.7%
Adjusted operating profit(2) £195.8m £176.1m +11.2% +15.5%
DCC LPG £48.4m £45.6m +6.2% +9.6%
DCC Retail & Oil £70.0m £65.2m +7.4% +9.5%
DCC Healthcare £50.2m £39.8m +26.0% +29.8%
DCC Technology £27.2m £25.5m +6.5% +19.0%
Adjusted earnings per share(2) 134.2p 117.9p +13.8% +18.3%
Interim dividend 55.85p 51.95p +7.5%
Net debt (excl. lease creditors)(3) £54.1m £137.2m
· DCC delivered strong growth in the seasonally less significant first
half of the year, a very good performance given the strong growth in the
comparative period. Operating profit increased by 11.2% (15.5% on a constant
currency basis) to £195.8 million and more than half of the constant currency
growth was organic. Adjusted earnings per share increased 13.8% to 134.2 pence
per share.
· All divisions delivered growth, despite the global volatility in
commodity pricing, supply chains and inflation.
· Interim dividend increased by 7.5% to 55.85 pence per share.
· DCC's financial position remains very strong, with net debt
(excluding lease creditors) at 30 September 2021 of £54.1 million.
· DCC continues to grow and develop organically and through acquisition
activity. Since the Group's prior year results announcement in May 2021, DCC
has committed approximately £80 million to bolt-on acquisitions, with
activity across each division. In the energy sector, acquisitions included the
Irish marketing operations of Naturgy, a supplier of renewable power, natural
gas and energy services to large commercial and industrial customers and a
synergistic, convenience-led, retail mobility business in Luxembourg. DCC
Healthcare also completed its first German primary care bolt-on, following its
initial market entry through the acquisition of Wörner in April 2021.
· Notwithstanding the adverse impact of currency translation and the
significantly increased wholesale cost of energy products, DCC continues to
expect that the year ending 31 March 2022 will be another year of strong
operating profit growth and continued development activity, and in line with
current market consensus expectations.
Sustainability:
· Sustainability is embedded in DCC's strategy, business model and
culture. DCC released its first standalone Sustainability Report in July 2021.
Amongst other items, the report outlines the key metrics the Group will use to
track progress against its sustainability objectives. DCC is rated AAA by
MSCI.
· DCC is making good progress towards achieving a 20% reduction in its
own carbon emissions by 2025 from a 2019 base.
· Progress is being achieved through multiple proactive initiatives.
For example, during the first half, DCC has scaled its biofuel usage in a
number of businesses for its own truck fleet. DCC is also investing in
renewable electricity generation on its sites. For example, DCC Healthcare's
soft-gel facility in south Wales generates 50% of its electricity on-site
though wind and solar power and utilises its leading sustainability position
to attract new customers.
Energy transition:
· Leading energy consumers on their transition to renewable or low
carbon energy products is central to DCC's purpose, sustainability objectives
and strategy. DCC continues to introduce innovative energy solutions for its
commercial and industrial, residential, and mobility customers. For example,
since May 2021, DCC has:
- Accelerated the growth of the recently-acquired solar offering in
France, beginning to cross-sell other energy solutions to those customers;
- Launched an energy management service for French B2B power customers,
to help customers better understand, monitor and lower their energy usage and
also launched an 'on-premise' electric vehicle ('EV') charging offering for
office and apartment buildings;
- Further increased the scale of renewable energy solutions provided in
the Irish market through the recent acquisition of Naturgy. All of the
electricity DCC sells to customers in Ireland is renewable;
- Launched a new offering to trial a 100% biofuel solution for
residential heating in Britain this winter, which can offer customers an c.85%
reduction in carbon; and
- Recently announced a new partnership with ENGIE to roll out EV
fast-charging across DCC's French motorway network.
· DCC is investing in its capability in new energy solutions. As a
result, DCC has a strong pipeline of initiatives right across its energy
activities. Together with existing offerings, these will provide energy
consumers with further solutions to assist with the decarbonisation of their
energy usage into the future.
1 Constant currency ('CC') represents the retranslation of foreign
denominated current year results at prior year exchange rates
2 Excluding net exceptionals and amortisation of intangible assets
3 Net debt including lease creditors at 30 September 2021 was £390.3 million
(2020: £441.0 million)
Donal Murphy, Chief Executive, commented:
"I am pleased to report a strong performance in the seasonally less
significant first half, which builds on the growth recorded during the first
half of the prior year. Each of our four divisions has delivered good growth,
underlining the resilience of our business model and our ability to adapt to
the very volatile macro environment. Sustainability is core to how we do
business, and we continue to make good progress across each of our four
sustainability pillars, including within energy transition. During the period
we have developed a number of new partnerships with energy suppliers, bringing
innovative and lower-carbon solutions to our customers. DCC is well positioned
to lead our customers through their energy transition.
With the strength of our market positions and an active acquisition pipeline,
DCC has the capability and financial strength to continue the growth and
development of the Group across the energy, healthcare and technology
sectors."
Contact information
Investor enquiries:
Kevin Lucey, Chief Financial Officer
Tel: +353 1 2799 400
Rossa White, Head of Group Investor Relations
Email: investorrelations@dcc.ie
(mailto:investorrelations@dcc.ie)
Media enquiries:
Powerscourt (Eavan Gannon/Victoria Palmer Moore)
Tel: +44 20 7250 1446
Email: DCC@powerscourt‐group.com
DCC website:
www.dcc.ie (www.dcc.ie)
Presentation of results - audio webcast and conference call details:
DCC will host a live audio webcast and conference call of the presentation at
09.00 today. The slides for this presentation can be downloaded from DCC's
website, www.dcc.ie. The access details for the live presentation are as
follows:
Ireland: +353 (0) 1 506 0650
UK: +44 (0) 2071 928
338
International: +44 (0) 2071 928 338
Passcode:
7839245
Webcast Link: https://edge.media-server.com/mmc/p/uihow8cz
(https://edge.media-server.com/mmc/p/uihow8cz)
This report, presentation slides and a replay of the audio will be made
available at www.dcc.ie.
Document contents Pages
Divisional Performance Reviews 4 - 7
Group Financial Review 8
Income Statement Review 9 - 11
Cash Flow, Development & Financial Position 12 - 16
Interim Financial Statements (Condensed) 17 - 35
Alternative Performance Measures 36 - 39
Divisional Performance Reviews
DCC LPG 2021 2020 % change % change CC
Volumes (thousand tonnes) 918.4kT 726.3kT +26.4%
Operating profit £48.4m £45.6m +6.2% +9.6%
Operating profit per tonne £52.67 £62.72
DCC LPG delivered strong operating profit growth in the seasonally less
significant first half of the financial year, notwithstanding the substantial
increase in the wholesale cost of product during the period. Operating profit
increased by 6.2% (9.6% ahead on a constant currency basis) to £48.4 million
and over half of the constant currency growth was organic.
As anticipated, volumes recovered across most markets during the first half of
the year, driven by the reopening of economies and the corresponding increase
in commercial activity. DCC LPG sold 918.4k tonnes of product in the first
half, a 26.4% increase on the prior year. As expected, operating profit per
tonne reduced due to the mix impact of the significant increase in lower
margin commercial and industrial customer demand, the impact of the UPG
acquisition in the US and the higher cost of product.
The French business performed in line with expectations, benefiting from
continued good cylinder and domestic demand. The recently acquired solar
photovoltaic businesses have performed well since acquisition and experienced
strong demand for their design, build and maintenance solutions. These
acquisitions have continued to broaden the energy solutions the business
offers to customers in France and are delivering strong returns on capital
employed. The B2B gas and power business also expanded its customer base and
the range of energy solutions it provides during the first half, although, as
with the LPG sector, the higher cost of energy was a headwind throughout the
period.
In Britain and Ireland, the business experienced a strong recovery in
commercial volumes. The growth in commercial volumes was supported by momentum
in Britain in oil to LPG conversions, relative to the pandemic-affected
prior year. Oil to LPG customer volumes are well ahead of where they were
prior to the pandemic, as commercial and industrial customers are increasingly
attracted to solutions that significantly reduce their carbon footprint. In
Ireland, similar to the experience in France, the on-grid gas and power
business has faced significant volatility and increases in wholesale prices
for natural gas and electricity. DCC LPG recently agreed to acquire Naturgy's
power and gas marketing operations in Ireland, a business supplying renewable
power, gas and energy services to large energy users. The acquisition enhances
DCC's presence in the Irish electricity and gas markets and represents an
important step in its strategy to expand its energy solutions offering across
the island of Ireland.
In the US, the business recorded very strong volume growth, driven by the
acquisitions of NES Group (September 2020) and UPG (January 2021). The
integration of both businesses has progressed well, and they have traded in
line with expectations. The business continued to build its market position
during the period and recently acquired another small business in Denver,
Colorado. DCC LPG now has a substantial business in the US, operating across
22 states. Overall, the business in the US performed in line with expectations
during the first half.
In Benelux, the business completed the acquisition of Primagaz in June of this
year, following receipt of competition authority approval. Integration is
progressing well, and the acquisition significantly increases DCC LPG's
position in the market, by adding over 10,000 customers. The business in
Germany benefited from three small bolt-on acquisitions completed during the
first half of the year, one in refrigerants and two in LPG, as it expands its
footprint in the sizeable and fragmented German market.
DCC Retail & Oil 2021 2020 % change % change CC
Volumes (billion litres) 5.681bn 4.8.76bn +16.5%
Operating profit £70.0m £65.2m +7.4% +9.5%
Operating profit per litre 1.23ppl 1.34ppl
Following a very strong performance in the first half of the prior year, DCC
Retail & Oil again delivered strong growth. Operating profit increased by
7.4% (9.5% on a constant currency basis), almost all of which was organic,
driven by the recovery in commercial and transport volumes. DCC Retail &
Oil also made good progress in expanding the range of products and services it
offers to its customers and continued to build capability in lower emissions
fuels, EV fast-charging and related services.
DCC Retail & Oil sold 5.681 billion litres of product in the first half, a
16.5% increase on the prior year. Commercial, industrial and transport volumes
increased significantly, particularly in the first quarter, as the easing of
Covid-19 restrictions led to economic activity recovering, relative to the
prior year. The business continues to broaden its product and service offering
to customers, which has benefited operating margins generally in recent years.
Operating profit per litre decreased modestly due to the mix impact of the
recovery in lower-margin, higher-volume commercial activity.
The business in Britain and Ireland recorded very strong organic operating
profit growth, in part due to the recovery in commercial activity, which drove
fuel and fuel card usage. The business also delivered good growth in its
expanded network of company operated retail sites and stores. The increased
range of customer solutions is becoming more material, and in the first half
of the year, good growth was achieved across lubricants, truck stop, roadside
services and heating services. The business in Britain also recently completed
the acquisitions of two small bolt-on acquisitions which will improve its
digital capability and further expand the roadside services offerings. The
business in Ireland delivered strong organic growth in the first half of the
year and benefited from the integration of two modest acquisitions completed
during the last twelve months.
The Scandinavian business performed robustly following an excellent
performance in the prior year. The business in Denmark in particular performed
well and generated good growth across the retail, agricultural and commercial
sectors. In Scandinavia generally, the business continued to deploy capital
into expanding its presence in lower emissions fuels and EV charging
infrastructure, including winning a tender for a transport mobility hub in
Norway.
In France, the business recorded very strong growth, as restrictions lifted
and retail mobility consumers were increasingly active. It has also made good
progress in offering new products and solutions to mobility customers. The
business has entered into a partnership with ENGIE to deploy EV chargers on 14
motorway sites, while rolling out the infrastructure to enable the sale of E85
fuel across its network. E85 offers a lower carbon alternative product for
retail mobility customers. In September 2021, the business also acquired a
synergistic network of 19 convenience-led retail forecourts in Luxembourg. The
acquisition will be fully integrated into DCC Retail & Oil's existing
mobility operating platform and, although modest, will add a good
company-operated convenience retailing capability.
DCC Healthcare 2021 2020 % change % change CC
Revenue £384.2m £322.0m +19.3% +22.9%
Operating profit £50.2m £39.8m +26.0% +29.8%
Operating margin 13.1% 12.4%
DCC Healthcare delivered another excellent performance in the first half of
the financial year, generating operating profit growth of 26.0% (29.8% on a
constant currency basis), approximately two-thirds of which was organic. DCC
Vital generated excellent organic profit growth and benefited from the
acquisition earlier in the year of Wörner, a leading primary care supplier in
Germany and Switzerland. DCC Health & Beauty Solutions also performed
well, growing its operating profit and building on the excellent growth in the
first half of the prior year.
DCC Health & Beauty Solutions, which provides outsourced solutions to
international nutrition and beauty brand owners, achieved good profit growth,
driven by strong growth in Europe. The performance in Europe was driven by
strong growth in sales of 'beauty from within' nutrition and premium skincare
products. Sales growth in the US market was more modest, following excellent
growth in the prior year, as consumer demand normalised towards longer-term
growth trends.
DCC Health & Beauty Solutions continued to invest in its management
resources during the period, particularly in the US where a new divisional
team has been established. It also expanded its capacity and capability across
its manufacturing facilities, including recently adding nutritional gummy
manufacturing in Britain.
DCC Vital, which is focused on the sales and marketing of medical products to
healthcare providers, generated excellent revenue and operating profit growth.
In the British and Irish markets DCC Vital is well positioned to benefit from
an increase in routine hospital procedures and in-person GP consultations,
which have yet to normalise as the pandemic continues to impact healthcare
systems. The business continued to service the healthcare systems with the
supply of pandemic-related PPE and related products.
DCC Vital also benefited from the first-time contribution of Wörner, acquired
in April 2021. This acquisition establishes a continental European growth
platform for DCC Vital in primary care and builds on DCC Vital's leadership
position in this sector in Britain. Wörner performed ahead of expectations
in the first half of the financial year, benefiting from the distribution of
antigen tests into the nursing home sector. The business also completed a
small bolt-on acquisition in the first quarter, further expanding its
footprint in the German market.
DCC Technology 2021 2020 % change % change CC
Revenue £1.985bn £1.969bn +0.8% +3.7%
Operating profit £27.2m £25.5m +6.5% +19.0%
Operating margin 1.4% 1.3%
DCC Technology delivered good profit growth in the first half of the year,
despite the well-documented global supply chain disruption being experienced
by the technology industry and its impact on product availability. The
business recorded operating profit growth of 6.5% (19.0% on a constant
currency basis) in the seasonally less significant first half of the financial
year and approximately one-third of the constant currency growth was organic.
The business performed very strongly in North America across both the consumer
and B2B sectors, where the economy reopened earlier than in Europe. This very
strong performance more than compensated for a challenging environment for the
UK business.
Overall, the business recorded modest revenue growth in the period. Trading
conditions in higher-margin B2B sectors, such as Pro AV products, improved as
economies re-opened. Demand for higher-volume, lower-margin consumer and
working-from-home products generally remained relatively robust, although
activity was somewhat constrained by supply disruption, particularly in the
UK.
The North American business performed very strongly in the first half of the
year and delivered very good organic revenue and profit growth across Pro
Audio, Pro AV and consumer products. As expected, the B2B Pro AV sector
recovered strongly as Covid-19 restrictions eased and activity in areas such
as corporate hospitality, education and healthcare returned towards
pre-pandemic levels. The business also benefited from the first-time
contribution from the two modest bolt-on acquisitions completed in the prior
year, both of which have performed well since acquisition.
In the UK, revenue and operating profit declined. The UK business is
experiencing the most product supply disruption, with labour availability and
logistics challenges also being most acute in this market. The business was
also impacted by the planned implementation of a new warehouse management
system in the second quarter. In Ireland, the business recorded good organic
revenue and operating profit growth in the first half of the financial year.
It also moved to a new, larger, warehouse and office facility during the
period, which will facilitate the continued growth and development of the
business in the Irish market.
In Continental Europe, DCC Technology generated good revenue and profit growth
in the period. As in North America, the business has experienced a recovery in
the demand environment for B2B products generally, although the rate of
recovery has varied across markets. The business performed well in the Benelux
region and delivered good growth in the Nordics, where it also recently
acquired a modest bolt-on acquisition in the AV sector. The performance in the
B2B sector benefited from the completion of the acquisition of Azenn during
the period, a French distributor of structured cabling solutions and network
devices to the French installation market. Azenn, which has performed well
since acquisition, is complementary to the existing French B2B offering.
Group Financial Review
A summary of the Group's results for the six months ended 30 September 2021 is
as follows:
2021 2020
£'m £'m % change
Revenue 7,518 5,931 +26.8%
Adjusted operating profit(1)
DCC LPG 48.4 45.6 +6.2%
DCC Retail & Oil 70.0 65.2 +7.4%
DCC Healthcare 50.2 39.8 +26.0%
DCC Technology 27.2 25.5 +6.5%
Group adjusted operating profit(1) 195.8 176.1 +11.2%
Finance costs (net) and other (26.9) (30.2)
Profit before net exceptionals, amortisation of intangible assets and tax 168.9 145.9 +15.7%
Net exceptional items before tax (17.3) (13.3)
Amortisation of intangible assets (36.6) (30.5)
Profit before tax 115.0 102.1
Taxation (24.3) (18.5)
Profit after tax 90.7 83.6
Non-controlling interests (6.2) (5.0)
Attributable profit 84.5 78.6
Adjusted earnings per share(1) 134.2 pence 117.9 pence +13.8%
Dividend per share 55.85 pence 51.95 pence +7.5%
Free cash flow(2) 12.3 120.7
Net debt at 30 September (excluding lease creditors) 54.1 137.2
Lease creditors 336.2 303.8
Net debt at 30 September (including lease creditors) 390.3 441.0
( )
( )
( )
(1 )Excluding net exceptionals and amortisation of intangible assets
(2 )After net working capital and net capital expenditure but before net
exceptionals, interest and tax payments
( )
Income Statement Review
Reporting currency
The Group's financial statements are presented in sterling, denoted by the
symbol '£'. The principal exchange rates used for the translation of results
into sterling are set out in note 4, Reporting Currency, on page 23.
The net impact of currency translation on the Group income statement versus
the prior period was relatively significant, accounting for a headwind of
approximately 4% to the reported growth in operating profit. Average sterling
exchange rates strengthened against most relevant currencies, including the US
dollar and euro.
Revenue
Overall, Group revenue increased by 26.8% (29.7% increase on a constant
currency basis) to £7.518 billion.
DCC LPG sold 918.4k tonnes of product in the first half of the year, a 26.4%
increase versus the prior year. Volumes recovered across all markets, driven
by the reopening of economies and the corresponding increase in commercial and
industrial activity.
DCC Retail & Oil sold 5.7 billion litres of product in the first half, a
16.5% increase versus the prior year driven by the recovery of commercial,
industrial and transport volumes, particularly in the first quarter.
Combined revenue in DCC Healthcare and DCC Technology was £2.4 billion, an
increase of 3.4% reflecting a strong revenue performance in DCC Healthcare and
DCC Technology's North American businesses.
Group adjusted operating profit
Group adjusted operating profit increased by 11.2% to £195.8 million (15.5%
ahead on a constant currency basis), in the seasonally less significant first
half of the year. More than half of the constant currency growth was organic,
a strong performance in the context of well-documented challenges in global
commodity prices, supply chain shortages and labour availability.
DCC LPG traded strongly during the first half of the year, particularly given
the significant increase in the cost of product. Operating profit increased by
6.2% (9.6% ahead on a constant currency basis) to £48.4 million, over half of
which was organic.
Operating profit in DCC Retail & Oil was well ahead of the prior year
driven by the anticipated recovery in commercial and transport volumes.
Operating profit increased 7.4% to £70.0 million (9.5% ahead on a constant
currency basis), almost all of which was organic.
DCC Healthcare delivered another excellent performance in the first half of
the year, generating operating profit growth of 26.0% to £50.2 million (29.8%
on a constant currency basis), approximately two-thirds of which was organic.
DCC Vital generated very strong organic growth and benefited from the
acquisition of Wörner in April 2021.
DCC Technology traded strongly, and operating profit increased 6.5% to £27.2
million (19.0% ahead on a constant currency basis) and approximately one-third
of the constant currency growth was organic. The growth was driven by the
consumer and B2B sectors in North America, which performed very well.
Finance costs (net) and other
Net finance and other costs decreased to £26.9 million (2020: £30.2
million). The decrease primarily reflects a lower interest charge due to lower
average gross debt balances, following a private placement debt repayment in
May 2021. Average net debt, excluding lease creditors, in the period was £211
million, compared to an average net debt of £223 million in the prior year.
The slight decrease in average net debt excluding lease creditors reflects
lower levels of working capital across the first six months of the year.
Profit before net exceptional items, amortisation of intangible assets and tax
Profit before net exceptional items, amortisation of intangible assets and tax
increased by 15.7% to £168.9 million.
Net exceptional items and amortisation of intangible assets
The Group recorded a net exceptional charge after tax of £17.5 million in the
first six months of the year as follows:
£'m
Adjustments to contingent acquisition consideration 8.0
Acquisition and related costs 5.8
Restructuring and integration costs and other 4.5
IAS 39 mark-to-market gain (1.0)
17.3
Tax attaching to exceptional items 0.2
Net exceptional charge 17.5
Adjustments to contingent acquisition consideration reflects an increase in
the provision for deferred consideration likely payable in respect of two
acquisitions in DCC Technology where the trading performance in North America
has been very strong and ahead of expectations. In accordance with IFRS 3,
this increase in the fair value of contingent consideration is recognised as a
charge in the Income Statement.
Acquisition and related costs include the professional fees and tax costs
relating to the evaluation and completion of acquisition opportunities and
amounted to £5.8 million.
Restructuring and integration costs and other of £4.5 million relates to the
restructuring and integration of operations across a number of businesses and
acquisitions. The most material item relates to DCC LPG, where a project is
underway in France to enhance the efficiency of its operating infrastructure.
The level of ineffectiveness calculated under IAS 39 on the hedging
instruments related to the Group's US private placement debt is charged or
credited as an exceptional item. In the six months ended 30 September 2021,
this amounted to an exceptional non-cash gain of £1.0 million. The cumulative
net exceptional credit taken in respect of IAS 39 ineffectiveness is £0.3
million. This, or any subsequent similar non-cash charges or gains, will net
to zero over the remaining term of this debt and the related hedging
instruments.
The charge for the amortisation of acquisition related intangible assets
increased to £36.6 million from £30.5 million in the prior year, with the
increase primarily reflecting acquisitions completed during the second half of
the prior year.
Profit before tax
Profit before tax increased to £115.0 million.
Taxation
The effective tax rate for the Group in the first half of the year of 18.0% is
based on the anticipated mix of profits for the full year and compares to a
full year effective tax rate in the prior year of 17.0%.
Adjusted earnings per share
Adjusted earnings per share increased by 13.8% to 134.2 pence, reflecting the
increase in profit before exceptional items and goodwill amortisation.
Dividend
The Board has decided to pay an interim dividend of 55.85 pence per share,
which represents a 7.5% increase on the prior year interim dividend of 51.95
pence per share. This dividend will be paid on 10 December 2021 to
shareholders on the register at the close of business on 19 November 2021.
Cash Flow, Development & Financial Position
Cash flow
As with its operating profit, the Group's operating cash flow is significantly
weighted towards the second half of the year. The cash flow of the Group for
the six months ended 30 September 2021 can be summarised as follows:
Six months ended 30 September 2021 2020
£'m £'m
Group operating profit 195.8 176.1
Increase in working capital (183.2) (28.4)
Depreciation (excluding ROU leased assets) and other 70.2 63.8
Operating cash flow (pre add-back for depreciation on ROU leased assets) 82.8 211.5
Capital expenditure (net) (67.0) (87.6)
15.8 123.9
Depreciation on ROU leased assets 32.4 29.9
Repayment of lease creditors (35.9) (33.1)
Free cash flow 12.3 120.7
Interest and tax paid, net of dividend from equity accounted investments (53.4) (42.0)
Free cash flow (after interest and tax) (41.1) 78.7
Acquisitions (162.4) (98.5)
Dividends (106.8) (92.5)
Exceptional items (9.8) (19.2)
Share issues 0.4 -
Net outflow (319.7) (131.5)
Opening net debt (150.2) (367.1)
Translation and other 79.6 57.6
Closing net debt (including lease creditors) (390.3) (441.0)
Analysis of closing net debt (including lease creditors):
Net debt at 30 September (excluding lease creditors) (54.1) (137.2)
Lease creditors at 30 September (336.2) (303.8)
(390.3) (441.0)
The working capital performance of the Group continues to be strong, with the
working capital position at 30 September 2021 comparing favourably to the
prior year and in line with expectations. The absolute value of working
capital at 30 September 2021 was a negative £25.2 million versus £1.0
million (positive) at 30 September 2020.
This good performance reflects a very strong underlying working capital
performance in DCC Retail & Oil, which benefited from the increased
activity levels. The uncertain supply chain environment saw both the
Healthcare and Technology divisions invest in working capital versus the prior
year to ensure service levels to customers. Overall working capital days at 30
September 2021 were negative 0.5 days sales, a slight improvement on the prior
year (2020: 0.0 days sales). DCC Technology selectively uses supply chain
financing solutions to sell, on a non-recourse basis, a portion of its
receivables relating to certain larger supply chain/sales and marketing
activities. As anticipated, the level of supply chain financing at 30
September 2021 was lower than the prior year at £125.9 million (2020: £223.4
million), with the decrease reflecting the lower volume throughput in in the
UK business following the warehouse system upgrades and product supply
disruption. Supply chain financing had a positive impact on Group working
capital days of 2.0 days (30 September 2020: 5.2 days).
As expected, working capital increased by £183.2 million over the six-month
period from 31 March 2021 due to the reversal of approximately £80 million of
one-off timing benefits which were highlighted in the Results Announcement in
May 2021, lower utilisation of supply chain financing and the investment in
the Group's typical seasonal working capital requirements.
Net capital expenditure for the six months amounted to £67.0 million (2020:
£87.6 million), was net of disposal proceeds of £11.1 million, and reflects
continued investment in development initiatives across the Group.
Capital expenditure in DCC LPG primarily comprised development expenditure on
tanks, cylinders and installations, supporting new business, the conversion of
oil customers to LPG, and the continued rollout of bioLPG cylinders and 'Click
and Collect' services. There was also continued development spend in relation
to the Avonmouth LPG storage facility in the UK. In the Retail & Oil
division, there was continued investment in new retail sites and site
upgrades, including adding further lower emission product capability, EV fast
charging and related services. It also included capital expenditure in
relation to the ongoing project to optimise the depot network in the UK to
bring greater network and capital efficiency over time. In DCC Healthcare, the
capital expenditure primarily related to increased manufacturing capability
across DCC Health & Beauty Solutions in both Europe and the US, to
facilitate the strong growth in customer demand. The majority of the capital
expenditure in DCC Technology related to the new warehouse management system
which is now live in the UK, along with development spend in Ireland to
relocate to a new, larger, office and warehouse facility during the period.
Net capital expenditure was broadly in line with the depreciation charge of
£68.9 million (excluding right-of-use leased assets) in the period.
Free cash flow in the six months ended 30 September 2021 of £12.3 million
compares to £120.7 million in the prior year, with the reduction
substantially due to the reversal of the one-off timing benefits to working
capital at 31 March 2021.
Total cash spend on acquisitions in the six months to 30 September 2021
The total cash spend on acquisitions in the six months ended 30 September 2021
was £162.4 million. This included the completion of the acquisition of
Wörner in DCC Healthcare, Primagaz and Solewa in DCC LPG, Jones Ireland in
DCC Retail & Oil and Azenn in DCC Technology which were announced in the
prior year Results Announcement in May 2021. Payment of deferred and
contingent acquisition consideration previously provided amounted to £21.1
million.
Committed acquisition and capital expenditure
Committed acquisition and capital expenditure in the period amounted to
£144.8 million as follows:
Acquisitions Capex Total
£'m £'m £'m
DCC LPG 33.9 36.3 70.2
DCC Retail & Oil 36.8 16.7 53.5
DCC Healthcare 5.8 7.0 12.8
DCC Technology 1.2 7.1 8.3
Total 77.7 67.1 144.8
Acquisition activity
The Group continues to be active from a development perspective. Acquisition
expenditure committed by the Group since the prior year results announcement
on 18 May 2021 amounted to £77.7 million and included:
DCC LPG
Naturgy Ireland
In November 2021, DCC LPG agreed to acquire Naturgy's Irish power and gas
marketing operations, subject to competition approval in Ireland. The business
is a service-led supplier of electricity and gas to large B2B energy customers
and also provides a range of services including demand side management,
lighting as a service, solar PV and PPA management. Founded in 2004, the
business has a long track record of sourcing and supplying renewable power to
industrial and commercial customers and was the first company in Ireland to
supply 100% renewable electricity. The acquisition enhances DCC's presence in
the Irish electricity and gas markets and represents an important step in its
strategy to expand its energy solutions offering across the island of Ireland.
The acquisition is expected to complete by the end of the calendar year.
DCC LPG recently completed a small bolt-on acquisition in the Denver region of
Colorado, further expanding its presence in the US propane market and also
completed a number of modest acquisitions in the German and Austrian markets.
DCC Retail & Oil
Luxembourg retail convenience network
DCC Retail & Oil acquired a network of 19 retail sites in Luxembourg in
September 2021. The sites will be managed by DCC's existing French management
team and the network and operations centre in Ireland. Most of the sites are
Gulf branded, with established convenience retail operations under the leading
Cactus Shoppi brand, which DCC will operate. The network contains
well-located, urban sites, suitable for investment in EV fast charging
infrastructure in the future.
In Britain, DCC Retail & Oil completed a number of complementary bolt-on
acquisitions including a HGV service business, offering multiple services to
hauliers including secure parking, fuel provision, truck washing facilities
and accommodation.
DCC Retail & Oil also completed a small bolt-on acquisition in the bulk
fuels and lubricants market in Norway.
DCC Healthcare
In June 2021, DCC Healthcare completed its first primary care bolt-on
acquisition in Germany following its initial market entry through the
Wörner acquisition in April 2021.
DCC Technology
DCC Technology recently acquired a small business in the Nordics which
distributes AV and security camera equipment, further enhancing DCC
Technology's service offering to its customers in the region.
Financial strength
An integral part of the Group's strategy is the maintenance of a strong and
liquid balance sheet which, among other benefits, enables it to take advantage
of development opportunities as they arise. The increasing scale and
geographic diversity of DCC will enable the Group to evolve its approach
somewhat into the future, leveraging a broader array of funding options and,
over time, reducing relative levels of gross cash on the balance sheet. At 30
September 2021, the Group had net debt (excluding lease creditors) of £54.1
million, cash of approximately £1.3 billion and undrawn committed bank
facilities of £400 million. Lease creditors at the same date amounted to
£336.2 million.
The Group's outstanding term debt at 30 September 2021, which has been raised
in the US private placement market, had an average maturity of 5.0 years, with
an implied average credit margin of 1.65% over Euribor/Libor.
Outlook
Notwithstanding the adverse impact of currency translation and the
significantly increased wholesale cost of energy products, DCC continues to
expect that the year ending 31 March 2022 will be another year of strong
operating profit growth and continued development activity, and in line with
current market consensus expectations.
Forward-looking statements
This announcement contains some forward-looking statements that represent
DCC's expectations for its business, based on current expectations about
future events, which by their nature involve risk and uncertainty. DCC
believes that its expectations and assumptions with respect to these
forward-looking statements are reasonable; however, because they involve risk
and uncertainty as to future circumstances, which are in many cases beyond
DCC's control, actual results or performance may differ materially from those
expressed in or implied by such forward-looking statements.
Principal risks and uncertainties
The Board of DCC is responsible for the Group's risk management and internal
control systems, which are designed to identify, manage and mitigate potential
material risks to the achievement of the Group's strategic and business
objectives. The Board has approved a Risk Management Policy which sets out
delegated responsibilities and procedures for the management of risk across
the Group.
The principal risks and uncertainties facing the Group in the short to medium
term, as set out on pages 85 to 89 of the 2021 Annual Report (together with
the principal mitigation measures), continue to be the principal risks and
uncertainties facing the Group for the remaining six months of the financial
year.
This is not an exhaustive statement of all relevant risks and uncertainties.
Matters which are not currently known to the Board or events which the Board
considers to be of low likelihood could emerge and give rise to material
consequences. The mitigation measures that are maintained in relation to these
risks are designed to provide a reasonable and not an absolute level of
protection against the impact of the events in question.
Group Income Statement
Unaudited 6 months ended Unaudited 6 months ended Audited year ended
30 September 2021 30 September 2020 31 March 2021
Pre exceptionals Exceptionals Pre exceptionals Exceptionals Pre exceptionals Exceptionals
(note 6) Total (note 6) Total (note 6) Total
Notes £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue 5 7,518,329 - 7,518,329 5,931,094 - 5,931,094 13,412,450 - 13,412,450
Cost of sales (6,621,722) - (6,621,722) (5,140,742) - (5,140,742) (11,592,970) - (11,592,970)
Gross profit 896,607 - 896,607 790,352 - 790,352 1,819,480 - 1,819,480
Administration expenses (280,674) - (280,674) (250,582) - (250,582) (499,812) - (499,812)
Selling and distribution expenses (430,615) - (430,615) (375,131) - (375,131) (814,758) - (814,758)
Other operating income/(expenses) 10,463 (18,305) (7,842) 11,459 (14,703) (3,244) 25,333 (40,495) (15,162)
Adjusted operating profit 195,781 (18,305) 177,476 176,098 (14,703) 161,395 530,243 (40,495) 489,748
Amortisation of intangible assets (36,566) - (36,566) (30,534) - (30,534) (66,898) - (66,898)
Operating profit 5 159,215 (18,305) 140,910 145,564 (14,703) 130,861 463,345 (40,495) 422,850
Finance costs (39,355) - (39,355) (45,070) - (45,070) (85,639) - (85,639)
Finance income 12,056 967 13,023 14,819 1,406 16,225 26,253 1,384 27,637
Equity accounted investments' profit after tax 390 - 390 62 - 62 233 - 233
Profit before tax 132,306 (17,338) 114,968 115,375 (13,297) 102,078 404,192 (39,111) 365,081
Income tax expense 7 (24,089) (184) (24,273) (18,254) (226) (18,480) (66,382) 4,104 (62,278)
Profit after tax for the financial period 108,217 97,121
(17,522) 90,695 (13,523) 83,598 337,810 (35,007) 302,803
Profit attributable to:
Owners of the Parent Company 102,029 (17,522) 84,507 92,137 (13,523) 78,614 327,626 (35,007) 292,619
Non-controlling interests 6,188 - 6,188 4,984 - 4,984 10,184 - 10,184
108,217 (17,522) 90,695 97,121 (13,523) 83,598 337,810 (35,007) 302,803
Earnings per ordinary share
Basic earnings per share 8 85.71p 79.83p 297.04p
Diluted earnings per share 8 85.66p 79.70p 296.62p
Adjusted basic earnings per share 8 134.24p 117.93p 386.62p
Adjusted diluted earnings per share 8 134.16p 117.74p 386.07p
Group Statement of Comprehensive Income
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
£'000 £'000 £'000
Group profit for the period 90,695 83,598 302,803
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss
Currency translation 17,481 19,388 (53,527)
Movements relating to cash flow hedges 105,035 54,668 67,961
Movement in deferred tax liability on cash flow hedges (19,065) (9,294) (11,554)
103,451 64,762 2,880
Items that will not be reclassified to profit or loss
Group defined benefit pension obligations:
- remeasurements (2,747) (1,950) 254
- movement in deferred tax asset 494 332 159
(2,253) (1,618) 413
Other comprehensive income for the period, net of tax 101,198 63,144 3,293
Total comprehensive income for the period 191,893 146,742 306,096
Attributable to:
Owners of the Parent Company 185,077 140,021 298,172
Non-controlling interests 6,816 6,721 7,924
191,893 146,742 306,096
Group Balance Sheet
Unaudited Unaudited Audited
30 Sept. 30 Sept. 31 March
2021 2020 2021
Notes £'000 £'000 £'000
ASSETS
Non-current assets
Property, plant and equipment 1,171,866 1,132,586 1,137,634
Right-of-use leased assets 328,432 298,533 308,863
Intangible assets and goodwill 2,343,529 2,186,447 2,206,735
Equity accounted investments 26,891 28,937 27,134
Deferred income tax assets 30,974 35,975 30,706
Derivative financial instruments 126,079 178,094 121,671
4,027,771 3,860,572 3,832,743
Current assets
Inventories 941,545 756,464 685,950
Trade and other receivables 1,557,229 1,434,777 1,689,372
Derivative financial instruments 150,744 33,389 40,181
Cash and cash equivalents 1,437,725 1,574,329 1,786,556
4,087,243 3,798,959 4,202,059
Total assets 8,115,014 7,659,531 8,034,802
EQUITY
Capital and reserves attributable to owners of the Parent Company
Share capital 17,422 17,422 17,422
Share premium 883,318 882,912 882,924
Share based payment reserve 10 44,531 38,625 40,969
Cash flow hedge reserve 10 99,100 2,097 13,130
Foreign currency translation reserve 10 77,113 129,178 60,260
Other reserves 10 932 932 932
Retained earnings 1,607,747 1,466,814 1,631,797
Equity attributable to owners of the Parent Company 2,730,163 2,537,980 2,647,434
Non-controlling interests 66,582 61,486 58,210
Total equity 2,796,745 2,599,466 2,705,644
LIABILITIES
Non-current liabilities
Borrowings 1,568,450 1,716,427 1,553,200
Lease creditors 275,859 256,747 261,617
Derivative financial instruments - 687 652
Deferred income tax liabilities 198,237 186,612 183,220
Post employment benefit obligations 13 (5,517) (5,604) (8,024)
Provisions for liabilities 282,641 265,880 279,492
Acquisition related liabilities 74,942 67,804 62,549
Government grants 367 324 373
2,394,979 2,488,877 2,333,079
Current liabilities
Trade and other payables 2,548,083 2,202,991 2,604,177
Current income tax liabilities 41,744 44,517 44,081
Borrowings 147,108 193,999 219,659
Lease creditors 60,322 47,009 53,607
Derivative financial instruments 53,140 11,896 9,843
Provisions for liabilities 47,723 48,062 42,859
Acquisition related liabilities 25,170 22,714 21,853
2,923,290 2,571,188 2,996,079
Total liabilities 5,318,269 5,060,065 5,329,158
Total equity and liabilities 8,115,014 7,659,531 8,034,802
Net (debt)/cash included above (excluding lease creditors) 11 (54,150) (137,197) 165,054
Group Statement of Changes in Equity
For the six months ended 30 September 2021 Attributable to owners of the Parent Company
Other Non-
Share Share Retained reserves controlling Total
capital premium earnings (note 10) Total interests equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 April 2021 17,422 882,924 1,631,797 115,291 2,647,434 58,210 2,705,644
Profit for the period - - 84,507 - 84,507 6,188 90,695
Currency translation - - - 16,853 16,853 628 17,481
Group defined benefit pension obligations:
- remeasurements - - (2,747) - (2,747) - (2,747)
- movement in deferred tax asset - - 494 - 494 - 494
Movements relating to cash flow hedges - - - 105,035 105,035 - 105,035
Movement in deferred tax liability on cash flow hedges - - - (19,065) (19,065) - (19,065)
Total comprehensive income - - 82,254 102,823 185,077 6,816 191,893
Re-issue of treasury shares - 394 - - 394 - 394
Share based payment - - - 3,562 3,562 - 3,562
Non-controlling interest arising on acquisition - - - - - 2,058 2,058
Dividends - - (106,304) - (106,304) (502) (106,806)
At 30 September 2021 17,422 883,318 1,607,747 221,676 2,730,163 66,582 2,796,745
For the six months ended 30 September 2020 Attributable to owners of the Parent Company
Other Non-
Share Share Retained reserves controlling Total
capital premium earnings (note 10) Total interests equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 April 2020 17,422 882,887 1,482,288 104,096 2,486,693 54,765 2,541,458
Profit for the period - - 78,614 - 78,614 4,984 83,598
Currency translation - - - 17,651 17,651 1,737 19,388
Group defined benefit pension obligations:
- remeasurements - - (1,950) - (1,950) - (1,950)
- movement in deferred tax asset - - 332 - 332 - 332
Movements relating to cash flow hedges - - - 54,668 54,668 - 54,668
Movement in deferred tax liability on cash flow hedges - - - (9,294) (9,294) - (9,294)
Total comprehensive income - - 76,996 63,025 140,021 6,721 146,742
Re-issue of treasury shares - 25 - - 25 - 25
Share based payment - - - 3,711 3,711 - 3,711
Dividends - - (92,470) - (92,470) - (92,470)
At 30 September 2020 17,422 882,912 1,466,814 170,832 2,537,980 61,486 2,599,466
For the year ended 31 March 2021 Attributable to owners of the Parent Company
Other Non-
Share Share Retained reserves controlling Total
capital premium earnings (note 10) Total interests equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 April 2020 17,422 882,887 1,482,288 104,096 2,486,693 54,765 2,541,458
Profit for the period - - 292,619 - 292,619 10,184 302,803
Currency translation - - - (51,267) (51,267) (2,260) (53,527)
Group defined benefit pension obligations:
- remeasurements - - 254 - 254 - 254
- movement in deferred tax asset - - 159 - 159 - 159
Movements relating to cash flow hedges - - - 67,961 67,961 - 67,961
Movement in deferred tax liability on cash flow hedges - - - (11,554) (11,554) - (11,554)
Total comprehensive income - - 293,032 5,140 298,172 7,924 306,096
Re-issue of treasury shares - 37 - - 37 - 37
Share based payment - - - 6,055 6,055 - 6,055
Non-controlling interest arising on acquisition - - - - - 323 323
Dividends - - (143,523) - (143,523) (4,802) (148,325)
At 31 March 2021 17,422 882,924 1,631,797 115,291 2,647,434 58,210 2,705,644
Group Cash Flow Statement
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
Notes £'000 £'000 £'000
Cash flows from operating activities
Profit for the period 90,695 83,598 302,803
Add back non-operating expenses/(income)
- tax 24,273 18,480 62,278
- share of equity accounted investments' profit (390) (62) (233)
- net operating exceptionals 18,305 14,703 40,495
- net finance costs 26,332 28,845 58,002
Group operating profit before exceptionals 159,215 145,564 463,345
Share-based payments expense 3,562 3,711 6,055
Depreciation (including right-of-use leased assets) 101,428 92,303 192,572
Amortisation of intangible assets 36,566 30,534 66,898
(Profit)/loss on disposal of property, plant and equipment (3,746) 3 (5,263)
Amortisation of government grants (9) (7) (36)
Other 1,470 (2,344) 2,418
(Increase)/decrease in working capital (183,210) (28,375) 177,670
Cash generated from operations before exceptionals 115,276 241,389 903,659
Exceptionals (10,564) (19,257) (29,358)
Cash generated from operations 104,712 222,132 874,301
Interest paid (including lease interest) (35,281) (44,989) (84,342)
Income tax paid (34,894) (16,967) (62,191)
Net cash flows from operating activities 34,537 160,176 727,768
Investing activities
Inflows:
Proceeds from disposal of property, plant and equipment 11,148 1,056 15,898
Proceeds on disposal of equity accounted investment 778 - -
Government grants received in relation to property, plant and equipment - - 89
Interest received 12,033 15,155 27,930
23,959 16,211 43,917
Outflows:
Purchase of property, plant and equipment (78,187) (88,615) (162,879)
Acquisition of subsidiaries 12 (141,281) (72,685) (236,232)
Payment of accrued acquisition related liabilities (21,140) (25,801) (36,330)
(240,608) (187,101) (435,441)
Net cash flows from investing activities (216,649) (170,890) (391,524)
Financing activities
Inflows:
Proceeds from issue of shares 394 25 37
Net cash inflow on derivative financial instruments 31,475 50,697 68,554
Increase in interest-bearing loans and borrowings - 320,000 320,000
31,869 370,722 388,591
Outflows:
Repayment of interest-bearing loans and borrowings (105,166) (439,185) (437,612)
Repayment of lease creditors (31,173) (28,302) (59,279)
Dividends paid to owners of the Parent Company 9 (106,304) (92,470) (143,523)
Dividends paid to non-controlling interests (502) - (4,802)
(243,145) (559,957) (645,216)
Net cash flows from financing activities (211,276) (189,235) (256,625)
Change in cash and cash equivalents (393,388) (199,949) 79,619
Translation adjustment 11,761 9,469 (47,496)
Cash and cash equivalents at beginning of period 1,716,896 1,684,773 1,684,773
Cash and cash equivalents at end of period 1,335,269 1,494,293 1,716,896
Cash and cash equivalents consists of:
Cash and short-term bank deposits 11 1,437,725 1,574,329 1,786,556
Overdrafts 11 (102,456) (80,036) (69,660)
1,335,269 1,494,293 1,716,896
Notes to the Condensed Financial Statements
for the six months ended 30 September 2021
1. Basis of Preparation
The Group condensed interim financial statements which should be read in
conjunction with the annual financial statements for the year ended 31 March
2021 have been prepared in accordance with the Transparency (Directive
2004/109/EC) Regulations 2007, the related Transparency rules of the Irish
Financial Services Regulatory Authority and in accordance with IAS 34 Interim
Financial Reporting as adopted by the European Union.
The preparation of the interim financial statements requires management to
make judgements, estimates and assumptions that affect the application of
policies and reported amounts of certain assets, liabilities, revenues and
expenses together with disclosure of contingent assets and liabilities.
Estimates and underlying assumptions are reviewed on an ongoing basis.
These condensed interim financial statements for the six months ended 30
September 2021 and the comparative figures for the six months ended 30
September 2020 are unaudited and have not been reviewed by the Auditors. The
summary financial statements for the year ended 31 March 2021 represent an
abbreviated version of the Group's full accounts for that year, on which the
Auditors issued an unqualified audit report and which have been filed with the
Registrar of Companies.
2. Accounting Policies
The accounting policies and methods of computation adopted in the preparation
of the Group condensed interim financial statements are consistent with those
applied in the 2021 Annual Report and are described in those financial
statements on pages 206 to 214.
The following changes to IFRS became effective for the Group during the period
but did not result in material changes to the Group's consolidated financial
statements:
· Interest Rate Benchmark Reform - Phase 2 (Amendments to IFRS 9, IAS
39, IFRS 7, IFRS 4 and IFRS 16)
· Covid 19-Related Rent Concessions beyond 30 June 2021 (Amendment to
IFRS 16)
The Group has not applied certain new standards, amendments and
interpretations to existing standards that have been issued but are not yet
effective. They are either not expected to have a material effect on the
consolidated financial statements or they are not currently relevant for the
Group.
3. Going Concern
Having reassessed the principal risks facing the Group (as detailed on pages
85 to 89 of the 2021 Annual Report), the Directors believe that the Group is
well placed to manage these risks successfully. No concerns or material
uncertainties have been identified as part of our assessment.
The Directors have a reasonable expectation that DCC plc, and the Group as a
whole, has adequate resources to continue in operational existence for the
foreseeable future, a period of not less than twelve months from the date of
this report. For this reason, the Directors continue to adopt the going
concern basis of accounting in preparing the condensed interim financial
statements.
4. Reporting Currency
The Group's financial statements are presented in sterling, denoted by the
symbol '£'. Results and cash flows of operations based in non-sterling
countries have been translated into sterling at average rates for the period,
and the related balance sheets have been translated at the rates of exchange
ruling at the balance sheet date. The principal exchange rates used for
translation of results and balance sheets into sterling were as follows:
Average rate Closing rate
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30 Sept. 30 Sept. 31 March 30 Sept. 30 Sept. 31 March
2021 2020 2021 2021 2020 2021
Stg£1= Stg£1= Stg£1= Stg£1= Stg£1= Stg£1=
Euro 1.1652 1.1183 1.1182 1.1621 1.0960 1.1736
Danish Krone 8.6661 8.3370 8.3295 8.6415 8.1611 8.7282
Swedish Krona 11.8445 11.7989 11.6205 11.8167 11.5863 12.0154
Norwegian Krone 11.8558 12.2289 12.0742 11.8129 12.1666 11.7304
US Dollar 1.3909 1.2665 1.3036 1.3456 1.2832 1.3760
Hong Kong Dollar 10.8076 9.8172 10.1056 10.4804 9.9454 10.6975
5. Segmental Reporting
DCC is an international sales, marketing and support services group
headquartered in Dublin, Ireland. Operating segments are reported in a manner
consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker has been identified as Mr.
Donal Murphy, Chief Executive and his executive management team. The Group
is organised into four operating segments (as identified under IFRS 8
Operating Segments) and generates revenue through the following activities:
DCC LPG is a leading liquefied ('LPG') sales and marketing business, supplying
LPG in cylinder and bulk format to residential, commercial and industrial
customers. In addition, DCC LPG is developing a broader customer offering
through the supply of natural gas, power and renewables products, plus a range
of specialty gases such as refrigerants and medical gases.
DCC Retail & Oil is a leading provider of transport and heating energy,
lower emission fuels and biofuels, and related services to consumers and SME
businesses across Europe and has a key focus on being a market leader in
providing sustainable energy solutions to consumers.
DCC Healthcare is a leading healthcare business, providing products and
services to health and beauty brand owners and healthcare providers.
DCC Technology is a leading route-to-market and supply chain partner for
global technology brands and customers. DCC Technology provides a broad range
of consumer, business and enterprise technology products and services to
retailers, resellers and integrators.
The chief operating decision maker monitors the operating results of segments
separately in order to allocate resources between segments and to assess
performance. Segment performance is predominantly evaluated based on operating
profit before amortisation of intangible assets and net operating exceptional
items. Net finance costs and income tax are managed on a centralised basis and
therefore these items are not allocated between operating segments for the
purpose of presenting information to the chief operating decision maker and
accordingly are not included in the detailed segmental analysis.
The consolidated total assets of the Group as at 30 September 2021 amounted to
£8.1 billion. This figure was not materially different from the equivalent
figure at 31 March 2021 and therefore the related segmental disclosure note
has been omitted in accordance with IAS 34 Interim Financial Reporting.
Intersegment revenue is not material and thus not subject to separate
disclosure.
An analysis of the Group's performance by segment and geographic location is
as follows:
(a) By operating segment
Unaudited six
months ended 30 September 2021
DCC DCC
DCC
DCC
LPG Retail & Oil
Healthcare Technology
Total
£'000 £'000 £'000 £'000 £'000
Segment revenue 862,268 4,286,533 384,224 1,985,304 7,518,329
Adjusted operating profit 48,369 70,022 50,203 27,187 195,781
Amortisation of intangible assets (21,798) (4,255) (1,804) (8,709) (36,566)
Net operating exceptionals (note 6) (6,036) (1,631) (789) (9,849) (18,305)
Operating profit 20,535 64,136 47,610 8,629 140,910
Unaudited six
months ended 30 September 2020
DCC DCC
DCC
DCC
LPG Retail & Oil
Healthcare Technology
Total
£'000 £'000 £'000 £'000 £'000
Segment revenue 578,314 3,061,937 322,009 1,968,834 5,931,094
Adjusted operating profit 45,557 65,172 39,840 25,529 176,098
Amortisation of intangible assets (16,689) (1,681) (3,150) (9,014) (30,534)
Net operating exceptionals (note 6) (6,839) (246) (326) (7,292) (14,703)
Operating profit 22,029 63,245 36,364 9,223 130,861
Audited year ended 31 March 2021
DCC DCC
DCC
DCC
LPG Retail & Oil
Healthcare Technology
Total
£'000 £'000 £'000 £'000 £'000
Segment revenue 1,685,570 6,588,186 655,364 4,483,330 13,412,450
Adjusted operating profit 231,253 144,824 81,721 72,445 530,243
Amortisation of intangible assets (37,829) (4,926) (5,504) (18,639) (66,898)
Net operating exceptionals (note 6) (17,732) (5,261) (4,229) (13,273) (40,495)
Operating profit 175,692 134,637 71,988 40,533 422,850
(b) By geography
The Group has a presence in 20 countries worldwide. The following represents a
geographical revenue analysis about the country of domicile (Republic of
Ireland) and countries with material revenue representing over 10% of Group
revenue.
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
£'000 £'000 £'000
Republic of Ireland 588,902 370,466 901,802
United Kingdom 3,122,439 2,637,784 5,932,234
France 1,383,777 1,051,881 2,442,082
Other 2,423,211 1,870,963 4,136,332
7,518,329 5,931,094 13,412,450
(c) Disaggregation of revenue
The following table disaggregates revenue by primary geographical market,
major revenue lines and timing of revenue recognition. The use of revenue as a
metric of performance in the Group's LPG and Retail & Oil segments is of
limited relevance due to the influence of changes in underlying oil product
costs on absolute revenues. Whilst changes in underlying oil product costs
will change percentage operating margins, this has little relevance in the
downstream energy distribution market in which these two segments operate
where profitability is driven by absolute contribution per tonne/litre of
product sold, and not a percentage margin. Accordingly, management review
geographic volume performance rather than geographic revenue performance for
these two segments as country-specific GDP and weather patterns can influence
volumes. The disaggregated revenue information presented below for DCC
Healthcare and Technology, which can also be influenced by country-specific
GDP movements, is consistent with how revenue is reported and reviewed
internally.
Unaudited six
months ended 30 September 2021
DCC DCC
DCC
DCC
LPG Retail & Oil
Healthcare Technology
Total
£'000 £'000 £'000 £'000 £'000
Republic of Ireland (country of domicile) 73,411 289,173 60,088 166,230 588,902
United Kingdom 167,833 1,780,427 208,998 965,181 3,122,439
France 376,626 848,666 - 158,485 1,383,777
Other 244,398 1,368,267 115,138 695,408 2,423,211
862,268 4,286,533 384,224 1,985,304 7,518,329
LPG and related products 862,268 - - - 862,268
Oil and related products - 4,286,533 - - 4,286,533
Nutrition and health & beauty products - - 179,759 - 179,759
Medical and pharmaceutical products - - 204,465 - 204,465
Technology products and services - - - 1,985,304 1,985,304
862,268 4,286,533 384,224 1,985,304 7,518,329
Products transferred at point in time 862,268 4,286,533 384,224 1,985,304 7,518,329
Unaudited six
months ended 30 September 2020
DCC DCC
DCC
DCC
LPG Retail & Oil
Healthcare Technology
Total
£'000 £'000 £'000 £'000 £'000
Republic of Ireland (country of domicile) 41,988 142,456 46,537 139,485 370,466
United Kingdom 120,744 1,194,942 192,747 1,129,351 2,637,784
France 273,222 643,211 - 135,448 1,051,881
Other 142,360 1,081,328 82,725 564,550 1,870,963
578,314 3,061,937 322,009 1,968,834 5,931,094
LPG and related products 578,314 - - - 578,314
Oil and related products - 3,061,937 - - 3,061,937
Nutrition and health & beauty products - - 176,369 - 176,369
Medical and pharmaceutical products - - 145,640 - 145,640
Technology products and services - - - 1,968,834 1,968,834
578,314 3,061,937 322,009 1,968,834 5,931,094
Products transferred at point in time 578,314 3,061,937 322,009 1,968,834 5,931,094
Audited year ended 31 March 2021
DCC DCC
DCC
DCC
LPG Retail & Oil
Healthcare Technology
Total
£'000 £'000 £'000 £'000 £'000
Republic of Ireland (country of domicile) 130,842 340,285 103,364 327,311 901,802
United Kingdom 330,907 2,699,344 373,413 2,528,570 5,932,234
France 767,199 1,348,429 - 326,454 2,442,082
Other 456,622 2,200,128 178,587 1,300,995 4,136,332
1,685,570 6,588,186 655,364 4,483,330 13,412,450
LPG and related products 1,685,570 - - - 1,685,570
Oil and related products - 6,588,186 - - 6,588,186
Nutrition and health & beauty products - - 373,824 - 373,824
Medical and pharmaceutical products - - 281,540 - 281,540
Technology products and services - - - 4,483,330 4,483,330
1,685,570 6,588,186 655,364 4,483,330 13,412,450
Products transferred at point in time 1,685,570 6,588,186 655,364 4,483,330 13,412,450
6. Exceptionals
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
£'000 £'000 £'000
Restructuring and integration costs (5,344) (12,657) (26,724)
Acquisition and related costs (5,782) (1,921) (13,604)
Adjustments to contingent acquisition consideration (8,000) 27 27
Other operating exceptional items 821 (152) (194)
Net operating exceptional items (18,305) (14,703) (40,495)
Mark to market of swaps and related debt 967 1,406 1,384
Net exceptional items before taxation (17,338) (13,297) (39,111)
Income tax (charge)/credit attaching to exceptional items (184) (226) 4,104
Net exceptional items attributable to owners of the Parent (17,522) (13,523) (35,007)
Adjustments to contingent acquisition consideration reflects an increase in
the provision for deferred consideration likely payable in respect of two
acquisitions in DCC Technology where the trading performance in North America
has been very strong and ahead of expectations. In accordance with IFRS 3,
this increase in the fair value of contingent consideration is recognised as a
charge in the Income Statement.
Acquisition and related costs include the professional fees and tax costs
(such as stamp duty) relating to the evaluation and/or completion of
acquisition opportunities and amounted to £5.782 million.
Restructuring and integration costs of £5.344 million primarily relates to
the restructuring and integration of operations across a number of businesses
and acquisitions. The most material item relates to DCC LPG, where a project
is underway in France to enhance the efficiency of its operating
infrastructure.
Most of the Group's debt has been raised in the US private placement market,
denominated in US dollars, euro and sterling. Long-term interest and cross
currency interest rate derivatives have been utilised to achieve an
appropriate mix of fixed and floating rate debt across the three currencies.
The level of ineffectiveness calculated under IAS 39 on the fair value and
cash flow hedge relationships relating to this debt is charged or credited as
an exceptional item. In the six months ended 30 September 2021, this amounted
to an exceptional non-cash gain of £0.967 million. Following this credit, the
cumulative net exceptional credit taken in respect of the Group's outstanding
US Private Placement debt and related hedging instruments is £0.300 million.
This, or any subsequent similar non-cash charges or gains, will net to zero
over the remaining term of this debt and the related hedging instruments.
7. Taxation
The taxation expense for the interim period is based on management's best
estimate of the weighted average tax rate that is expected to be applicable
for the full year. The Group's effective tax rate for the period was 18% (six
months ended 30 September 2020: 17% and year ended 31 March 2021: 17%).
8. Earnings per Ordinary Share
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
£'000 £'000 £'000
Profit attributable to owners of the Parent 84,507 78,614 292,619
Amortisation of intangible assets after tax 30,328 23,994 53,234
Exceptionals after tax 17,522 13,523 35,007
Adjusted profit after taxation and non-controlling interests 132,357 116,131 380,860
Basic earnings per ordinary share
Basic earnings per share is calculated by dividing the profit attributable to
owners of the Parent Company by the weighted average number of ordinary shares
in issue during the period, excluding ordinary shares purchased by the Company
and held as treasury shares. The adjusted figures for basic earnings per
ordinary share (a non-GAAP financial measure) are intended to demonstrate the
results of the Group after eliminating the impact of amortisation of
intangible assets and net exceptionals.
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
pence pence pence
Basic earnings per ordinary share 85.71p 79.83p 297.04p
Amortisation of intangible assets after tax 30.76p 24.37p 54.04p
Exceptionals after tax 17.77p 13.73p 35.54p
Adjusted basic earnings per ordinary share 134.24p 117.93p 386.62p
Weighted average number of ordinary shares in issue (thousands) 98,596 98,472 98,510
Diluted earnings per ordinary share
Diluted earnings per ordinary share is calculated by adjusting the weighted
average number of ordinary shares outstanding to assume conversion of all
dilutive potential ordinary shares. Share options and awards are the Company's
only category of dilutive potential ordinary shares. The adjusted figures for
diluted earnings per ordinary share (a non-GAAP financial measure) are
intended to demonstrate the results of the Group after eliminating the impact
of amortisation of intangible assets and net exceptionals.
Employee share options and awards, which are performance-based, are treated as
contingently issuable shares because their issue is contingent upon
satisfaction of specified performance conditions in addition to the passage of
time. These contingently issuable shares are excluded from the computation of
diluted earnings per ordinary share where the conditions governing
exercisability would not have been satisfied as at the end of the reporting
period if that were the end of the vesting period.
The adjusted figures for diluted earnings per ordinary share (a non-GAAP
financial measure) are intended to demonstrate the results of the Group after
eliminating the impact of amortisation of intangible assets and net
exceptionals.
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
pence pence pence
Diluted earnings per ordinary share 85.66p 79.70p 296.62p
Amortisation of intangible assets after tax 30.74p 24.33p 53.96p
Exceptionals after tax 17.76p 13.71p 35.49p
Adjusted diluted earnings per ordinary share 134.16p 117.74p 386.07p
Weighted average number of ordinary shares in issue (dilutive, thousands) 98,654 98,634 98,650
The earnings used for the purposes of the diluted earnings per ordinary share
calculations were £84.507 million (six months ended 30 September 2020:
£78.614 million) and £132.357 million (six months ended 30 September 2020:
£116.131 million) for the purposes of the adjusted diluted earnings per
ordinary share calculations. The weighted average number of ordinary shares
used in calculating the diluted earnings per ordinary share for the six months
ended 30 September 2021 was 98.654 million (six months ended 30 September
2020: 98.634 million). A reconciliation of the weighted average number of
ordinary shares used for the purposes of calculating the diluted earnings per
ordinary share amounts is as follows:
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
'000 '000 '000
Weighted average number of ordinary shares in issue 98,596 98,472 98,510
Dilutive effect of options and awards 58 162 140
Weighted average number of ordinary shares for diluted earnings per share 98,654 98,634 98,650
9. Dividends
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
£'000 £'000 £'000
Interim - paid 51.95 pence per share on 9 December 2020 - - 51,045
Final - paid 107.85 pence per share on 22 July 2021
(paid 95.79 pence per share on 23 July 2020) 106,304 92,470 92,478
106,304 92,470 143,523
On 8 November 2021, the Board approved an interim dividend of 55.85 pence per
share (£55.074 million). These condensed interim financial statements do not
reflect this dividend payable.
10. Other Reserves
For the six months ended 30 September 2021 Foreign
Share based Cash flow currency
payment hedge translation Other
reserve reserve reserve reserves Total
£'000 £'000 £'000 £'000 £'000
At 1 April 2021 40,969 13,130 60,260 932 115,291
Currency translation - - 16,853 - 16,853
Movements relating to cash flow hedges - 105,035 - - 105,035
Movement in deferred tax liability on cash flow (19,065) - - (19,065)
hedges -
Share based payment 3,562 - - - 3,562
At 30 September 2021 44,531 99,100 77,113 932 221,676
For the six months ended 30 September 2020 Foreign
Share based Cash flow currency
payment hedge translation Other
reserve reserve reserve reserves Total
£'000 £'000 £'000 £'000 £'000
At 1 April 2020 34,914 (43,277) 111,527 932 104,096
Currency translation - - 17,651 - 17,651
Movements relating to cash flow hedges - 54,668 - - 54,668
Movement in deferred tax liability on cash flow (9,294) - - (9,294)
hedges -
Share based payment 3,711 - - - 3,711
At 30 September 2020 38,625 2,097 129,178 932 170,832
For the year ended 31 March 2021 Foreign
Share based Cash flow currency
payment hedge translation Other
reserve reserve reserve reserves Total
£'000 £'000 £'000 £'000 £'000
At 1 April 2020 34,914 (43,277) 111,527 932 104,096
Currency translation - - (51,267) - (51,267)
Movements relating to cash flow hedges - 67,961 - - 67,961
Movement in deferred tax liability on cash flow (11,554) - - (11,554)
hedges -
Share based payment 6,055 - - - 6,055
At 31 March 2021 40,969 13,130 60,260 932 115,291
11. Analysis of Net Debt
Unaudited Unaudited Audited
30 Sept. 30 Sept. 31 March
2021 2020 2021
£'000 £'000 £'000
Non-current assets:
Derivative financial instruments 126,079 178,094 121,671
Current assets:
Derivative financial instruments 150,744 33,389 40,181
Cash and cash equivalents 1,437,725 1,574,329 1,786,556
1,588,469 1,607,718 1,826,737
Non-current liabilities:
Derivative financial instruments - (687) (652)
Unsecured Notes (1,568,450) (1,716,427) (1,553,200)
(1,568,450) (1,717,114) (1,553,852)
Current liabilities:
Derivative financial instruments (53,140) (11,896) (9,843)
Bank borrowings (102,456) (80,036) (69,660)
Unsecured Notes (44,652) (113,963) (149,999)
(200,248) (205,895) (229,502)
Net (debt)/cash (excluding lease creditors) (54,150) (137,197) 165,054
Lease creditors - non-current (275,859) (256,747) (261,617)
Lease creditors - current (60,322) (47,009) (53,607)
Total lease creditors (336,181) (303,756) (315,224)
Net debt (including lease creditors) (390,331) (440,953) (150,170)
An analysis of the maturity profile of the Group's net debt (including lease
creditors) at 30 September 2021 is as follows:
Between Between
Less than 1 and 2 2 and 5 Over
1 year years years 5 years Total
At 30 September 2021 £'000 £'000 £'000 £'000 £'000
Cash and short-term deposits 1,437,725 - - - 1,437,725
Overdrafts (102,456) - - - (102,456)
Cash and cash equivalents 1,335,269 - - - 1,335,269
Unsecured Notes (44,652) (255,330) (626,845) (686,275) (1,613,102)
Derivative financial instruments - Unsecured Notes 6,995 34,803 77,200 14,076 133,074
Derivative financial instruments - other 90,609 - - - 90,609
Net debt (excluding lease (220,527) (549,645) (672,199) (54,150)
creditors)
1,388,221
Lease creditors (60,322) (51,354) (103,073) (121,432) (336,181)
Net debt (including lease creditors) 1,327,899 (271,881) (652,718) (793,631) (390,331)
The Group's Unsecured Notes fall due between 24 March 2022 and 4 April 2034
with an average maturity of 5.0 years at 30 September 2021. The full fair
value of a hedging derivative is allocated to the time period corresponding to
the maturity of the hedged item.
12. Business Combinations
A key strategy of the Group is to create and sustain market leadership
positions through acquisitions in markets it currently operates in, together
with extending the Group's footprint into new geographic markets. In line with
this strategy, the principal acquisitions completed by the Group during the
period, together with percentages acquired, were as follows:
· The acquisition by DCC Healthcare in June 2021 of Wörner
Medizinprodukte Holding GmbH ("Wörner"), a leading supplier of medical and
laboratory products to the primary care sector in Germany and Switzerland.
Wörner sells a broad product range to approximately 20,000 customers
annually, including general practitioners, primary care centres, specialist
medical centres and laboratories;
· The acquisition by DCC LPG of 100% of Primagaz from SHV Energy in
July 2021. The business focuses on the bulk and cylinder LPG markets, and
serves approximately 10,000 customers annually; and
· The acquisition by DCC Retail & Oil in September 2021 of a
network of 19 retail forecourt sites in Luxembourg. Most of the sites are Gulf
branded with established convenience retail operations under the Cactus Shoppi
brand which DCC will operate.
The acquisition data presented below reflects the fair value of the
identifiable net assets acquired (excluding cash and cash equivalents
acquired) in respect of acquisitions completed during the six months ended 30
September 2021.
6 months 6 months
ended ended
30 Sept. 30 Sept.
2021 2020
£'000 £'000
Assets
Non-current assets
Property, plant and equipment 29,840 6,867
Right-of-use leased assets 21,793 -
Deferred income tax assets 376 7
Total non-current assets 52,009 6,874
Current assets
Inventories 23,262 100
Trade and other receivables 26,999 617
Total current assets 50,261 717
Liabilities
Non-current liabilities
Lease creditors (18,617) -
Provisions for liabilities and charges (7,879) -
Total non-current liabilities (26,496) -
Current liabilities
Trade and other payables (54,630) (251)
Current income tax liability (1,337) (195)
Lease creditors (3,176) -
Total current liabilities (59,143) (446)
Identifiable net assets acquired 16,631 7,145
Non-controlling interest arising on acquisition (2,058) -
Intangible assets - goodwill 152,471 67,330
Total consideration 167,044 74,475
Satisfied by:
Cash 152,865 82,341
Cash and cash equivalents acquired (11,584) (9,656)
Net cash outflow 141,281 72,685
Acquisition related liabilities 25,763 1,790
Total consideration 167,044 74,475
None of the business combinations completed during the period were considered
sufficiently material to warrant separate disclosure of the fair values
attributable to those combinations.
There were no adjustments made to the carrying amounts of assets and
liabilities acquired in arriving at their fair values. The initial assignment
of fair values to identifiable net assets acquired has been performed on a
provisional basis in respect of a number of the business combinations above
given the timing of closure of these transactions. Any amendments to these
fair values within the twelve-month timeframe from the date of acquisition
will be disclosable in the Group's condensed interim financial statements for
the six months ending 30 September 2022 as stipulated by IFRS 3.
The principal factors contributing to the recognition of goodwill on business
combinations entered into by the Group are the expected profitability of the
acquired business and the realisation of cost savings and synergies with
existing Group entities.
Acquisition and related costs included in other operating expenses in the
Group Income Statement amounted to £5.782 million (six months ended 30
September 2020: £1.921 million).
No contingent liabilities were recognised on the acquisitions completed during
the financial period or the prior financial years.
The gross contractual value of trade and other receivables as at the
respective dates of acquisition amounted to £27.431 million. The fair value
of these receivables is £26.999 million (all of which is expected to be
recoverable).
None of the goodwill recognised in respect of acquisitions completed during
the period is expected to be deductible for tax purposes.
The fair value of contingent consideration recognised at the date of
acquisition is calculated by discounting the expected future payment to
present value at the acquisition date. In general, for contingent
consideration to become payable, pre-defined profit thresholds must be
exceeded. On an undiscounted basis, the future payments for which the Group
may be liable for acquisitions completed during the period range from nil to
£40.7 million.
The acquisitions during the period contributed £123.5 million to revenues and
£5.6 million to profit after tax. The revenue and profit of the Group
determined in accordance with IFRS for the period ended 30 September 2021
would not have been materially different than reported in the Income Statement
if the acquisition date for all business combinations completed during the
period had been as of the beginning of the period.
13. Post Employment Benefit Obligations
The Group's defined benefit pension schemes' assets were measured at fair
value at 30 September 2021. The defined benefit pension schemes' liabilities
at 30 September 2021 were updated to reflect material movements in underlying
assumptions.
The Group's post employment benefit obligations moved from a net asset of
£8.024 million at 31 March 2021 to a net asset of £5.517 million at 30
September 2021. This movement was primarily driven by an actuarial loss on
liabilities arising from a decrease in the discount rates used to value these
liabilities.
The following actuarial assumptions have been made in determining the Group's
retirement benefit obligation for the six months ended 30 September 2021:
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
Discount rate
- Republic of Ireland 1.30% 1.25% 1.50%
- United Kingdom 2.00% 1.75% 2.20%
- Germany 1.30% 1.25% 1.50%
14. Seasonality of Operations
The Group's operations are significantly second-half weighted primarily due to
a portion of the demand for DCC's LPG and Retail & Oil products being
weather dependent and seasonal buying patterns in DCC Technology.
15. Related Party Transactions
There have been no related party transactions or changes in the nature and
scale of the related party transactions described in the 2021 Annual Report
that could have had a material impact on the financial position or performance
of the Group in the six months ended 30 September 2021.
16. Events after the Balance Sheet Date
There have been no material events subsequent to 30 September 2021 which would
require disclosure in this Report.
17. Board Approval
This report was approved by the Board of Directors of DCC plc on 8 November
2021.
18. Distribution of Interim Report
This report and further information on DCC is available at the Company's
website www.dcc.ie. A printed copy is available to the public at the Company's
registered office at DCC House, Leopardstown Road, Foxrock, Dublin 18,
Ireland.
Statement of Directors' Responsibilities
We confirm that to the best of our knowledge:
· the condensed set of interim financial statements for the six months
ended 30 September 2021 have been prepared in accordance with IAS 34 Interim
Financial Reporting as adopted by the EU; and
· the interim management report includes a fair review of the
information required by:
‒ Regulation 8(2) of the Transparency (Directive 2004/109/EC) Regulations
2007, being an indication of important events that have occurred during the
first six months of the financial year and their impact on the condensed set
of financial statements; and a description of the principal risks and
uncertainties for the remaining six months of the year; and
‒ Regulation 8(3) of the Transparency (Directive 2004/109/EC) Regulations
2007, being related party transactions that have taken place in the first six
months of the current financial year and that have materially affected the
financial position or performance of the entity during that period; and any
changes in the related party transactions described in the last annual report
that could do so.
On behalf of the Board
Mark
Breuer
Donal Murphy
Chairman Chief
Executive
8 November 2021
Supplementary Financial Information
Alternative Performance Measures
The Group reports certain alternative performance measures ('APMs') that are
not required under International Financial Reporting Standards ('IFRS') which
represent the generally accepted accounting principles ('GAAP') under which
the Group reports. The Group believes that the presentation of these APMs
provides useful supplemental information which, when viewed in conjunction
with our IFRS financial information, provides investors with a more meaningful
understanding of the underlying financial and operating performance of the
Group and its divisions.
These APMs are primarily used for the following purposes:
• to evaluate the historical and planned underlying results of our
operations;
• to set director and management remuneration; and
• to discuss and explain the Group's performance with the investment
analyst community.
None of the APMs should be considered as an alternative to financial measures
derived in accordance with GAAP. The APMs can have limitations as analytical
tools and should not be considered in isolation or as a substitute for an
analysis of our results as reported under GAAP. These performance measures may
not be calculated uniformly by all companies and therefore may not be directly
comparable with similarly titled measures and disclosures of other companies.
The principal APMs used by the Group, together with reconciliations where the
non-GAAP measures are not readily identifiable from the financial statements,
are as follows:
Adjusted operating profit ('EBITA')
Definition
This comprises operating profit as reported in the Group Income Statement
before net operating exceptional items and amortisation of intangible assets.
Net operating exceptional items and amortisation of intangible assets are
excluded in order to assess the underlying performance of our operations. In
addition, neither metric forms part of Director or management remuneration
targets.
6 months ended 6 months ended
Year ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
£'000 £'000 £'000
Operating profit 140,910 130,861 422,850
Net operating exceptional items 18,305 14,703 40,495
Amortisation of intangible assets 36,566 30,534 66,898
Adjusted operating profit ('EBITA') 195,781 176,098 530,243
Net interest
Definition
The Group defines net interest as the net total of finance costs and finance
income before interest related exceptional items as presented in the Group
Income Statement.
6 months ended 6 months ended
Year ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
£'000 £'000 £'000
Finance costs before exceptional items (39,355) (45,070) (85,639)
Finance income before exceptional items 12,056 14,819 26,253
Net interest (27,299) (30,251) (59,386)
Constant currency
Definition
The translation of foreign denominated earnings can be impacted by movements
in foreign exchange rates versus sterling, the Group's presentation currency.
In order to present a better reflection of underlying performance in the
period, the Group retranslates foreign denominated current year earnings at
prior year exchange rates.
6 months ended 6 months ended
30 Sept. 30 Sept.
2021 2020
Calculation: Revenue - constant currency £'000 £'000
Revenue 7,518,329 5,931,094
Currency impact 172,846 -
Revenue - constant currency 7,691,175 5,931,094
6 months ended 6 months ended
30 Sept. 30 Sept.
2021 2020
Calculation: Adjusted operating profit - constant currency £'000 £'000
Adjusted operating profit 195,781 176,098
Currency impact 7,618 -
Adjusted operating profit - constant currency 203,399 176,098
Effective tax rate
Definition
The Group's effective tax rate expresses the income tax expense before
exceptionals and deferred tax attaching to the amortisation of intangible
assets as a percentage of EBITA less net interest.
6 months ended 6 months ended
Year ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
£'000 £'000 £'000
Adjusted operating profit 195,781 176,098 530,243
Net interest (27,299) (30,251) (59,386)
Earnings before taxation 168,482 145,847 470,857
Income tax expense 24,273 18,480 62,278
Income tax attaching to net exceptionals (184) (226) 4,104
Deferred tax attaching to amortisation of intangible assets 6,238 6,540 13,664
Total income tax expense before exceptionals and deferred tax attaching to
amortisation of intangible assets
30,327 24,794 80,046
Effective tax rate (%) 18.0% 17.0% 17.0%
Net capital expenditure
Definition
Net capital expenditure comprises purchases of property, plant and equipment,
proceeds from the disposal of property, plant and equipment and government
grants received in relation to property, plant and equipment.
6 months ended 6 months ended
Year ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
£'000 £'000 £'000
Purchase of property, plant and equipment 78,187 88,615 162,879
Government grants received in relation to property, plant and equipment - - (89)
Proceeds from disposal of property, plant and equipment (11,148) (1,056) (15,898)
Net capital expenditure 67,039 87,559 146,892
Free cash flow
Definition
Free cash flow is defined by the Group as cash generated from operations
before exceptional items as reported in the Group Cash Flow Statement after
repayment of lease creditors and net capital expenditure.
6 months ended 6 months ended
Year ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
£'000 £'000 £'000
Cash generated from operations before exceptionals 115,276 241,389 903,659
Repayment of lease creditors (35,911) (33,137) (68,986)
Net capital expenditure (67,039) (87,559) (146,892)
Free cash flow 12,326 120,693 687,781
Free cash flow (after interest and tax payments)
Definition
Free cash flow (after interest and tax payments) is defined by the Group as
free cash flow after interest paid (excluding interest relating to lease
creditors), income tax paid, dividends received from equity accounted
investments and interest received.
6 months ended 6 months ended
Year ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
£'000 £'000 £'000
Free cash flow 12,326 120,693 687,781
Interest paid (excluding interest relating to lease creditors) (30,543) (40,154) (74,635)
Income tax paid (34,894) (16,967) (62,191)
Interest received 12,033 15,155 27,930
Free cash flow (after interest and tax payments) (41,078) 78,727 578,885
Committed acquisition expenditure
Definition
The Group defines committed acquisition expenditure as the total acquisition
cost of subsidiaries as presented in the Group Cash Flow Statement (excluding
amounts related to acquisitions which were committed to in previous years) and
future acquisition related liabilities for acquisitions committed to during
the period.
6 months ended 6 months ended
Year ended
30 Sept. 30 Sept. 31 March
2021 2020 2021
£'000 £'000 £'000
Net cash outflow on acquisitions during the period 141,281 72,685 236,232
Net cash outflow on acquisitions which were committed to in the previous (112,478) (22,560) (22,388)
period
Acquisition related liabilities arising on acquisitions during the period 25,763 1,790 9,321
Acquisition related liabilities which were committed to in the previous period (18,912) (417) (539)
Amounts committed in the current period 42,081 35,500 152,000
Committed acquisition expenditure 77,735 86,998 374,626
Net working capital
Definition
Net working capital represents the net total of inventories, trade and other
receivables (excluding interest receivable), and trade and other payables
(excluding interest payable, amounts due in respect of property, plant and
equipment and current government grants).
As at As at As at
30 Sept. 30 Sept. 31 March
2021 2020 2021
£'000 £'000 £'000
Inventories 941,545 756,464 685,950
Trade and other receivables 1,557,229 1,434,777 1,689,372
Less: interest receivable (39) (98) (16)
Trade and other payables (2,548,083) (2,202,991) (2,604,177)
Less: interest payable 14,625 10,763 11,668
Less: amounts due in respect of property, plant and equipment 9,510 2,111 13,554
Less: government grants 17 11 20
Net working capital (25,196) 1,037 (203,629)
Working capital (days)
Definition
Working capital days measures how long it takes in days for the Group to
convert working capital into revenue.
As at As at As at
30 Sept. 30 Sept. 31 March
2021 2020 2021
£'000 £'000 £'000
Net working capital (25,196) 1,037 (203,629)
September/March revenue 1,485,343 1,287,071 1,468,052
Working capital (days) (0.5 days) 0.0 days (4.3 days)
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR GZMGMLRLGMZMRecent news on DCC
See all newsREG - Allianz Global Invs - Top 10 Holdings
AnnouncementREG - DCC PLC - Holding in Company
AnnouncementREG - DCC PLC - Total Voting Rights
AnnouncementREG - DCC PLC - Interim Management Statement
AnnouncementREG - Allianz Global Invs - Top 10 Holdings
Announcement