REG - DCC PLC - Results for the six months ended 30 September 2024
12/11/2024 07:15
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RNS Number : 7926L DCC PLC 12 November 2024
12 November 2024
Interim results for the six months ended 30 September 2024
DCC delivers good profit growth in first half; Announces significant strategic update
· Group adjusted operating profit increased 4.7% (6.0% constant currency) in
the seasonally less significant first half of the year. Organic growth was
0.5% with M&A activity (net of divestments) contributing 5.5%.
· Adjusted earnings per share up 6.2% (7.5% constant currency).
· Interim dividend up 5.0% to 66.19 pence per share.
· Since our prior year Final Results in May 2024, DCC has committed
approximately £130 million to eight bolt-on acquisitions. The largest
acquisitions were in DCC Energy: Wirsol in Germany, a solar photovoltaic (PV)
and battery storage business; and Acteam ENR, a French solar PV business.
During the period, DCC also disposed of a majority stake in its liquid gas
business in Hong Kong & Macau.
· Separately this morning, DCC has announced a strategy update which will see
the Group focus on the energy sector, simplify the Group's operations and
maximise shareholder value.
· Notwithstanding the headwind of currency translation, DCC expects that the
year ending 31 March 2025 will be a year of good operating profit growth and
significant strategic progress.
Donal Murphy, Chief Executive, commented:
"We delivered good profit growth in the first half of our financial year.
Although the macro environment remains volatile, our resilient business
continued to perform well. Today we are also announcing decisive actions to
simplify our Group, pursue our largest growth and returns opportunity in the
energy sector and unlock substantial shareholder value. In DCC Energy, we are
executing our Cleaner Energy in Your Power strategy and completed a number
of complementary acquisitions and a divestment. Our disciplined approach to
capital allocation is aligned with our strategic priorities to give all our
customers the power to choose a cleaner energy future."
Financial Highlights 2024 2023 % change % change CC(1)
Revenue £9.325bn £9.616bn -3.0% -1.8%
Adjusted operating profit2 £259.3m £247.6m +4.7% +6.0%
DCC Energy £182.7m £170.6m +7.0% +8.4%
DCC Healthcare £38.1m £38.3m -0.4% +0.4%
DCC Technology £38.5m £38.7m -0.4% +1.1%
Adjusted earnings per share(2) 158.5p 149.3p +6.2% +7.5%
Interim dividend 66.19p 63.04p +5.0%
Net debt (excl. lease creditors)(3) £1,092.1m £1,039.1m
(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 2024 was £1,446.7
million (30 September 2023: £1,386.5 million)
Contact information
Investor enquiries:
Kevin Lucey, Chief Financial Officer Tel: +353 1 2799 400
Rossa White, Head of Group Investor Relations & Comms Email: investorrelations@dcc.ie
Media enquiries:
Sodali & Co (Eavan Gannon/Pete Lambie) Tel: +44 20 7250 1446
Email: DCCGroup@sodali.com
Presentation: Strategy update and interim results - audio webcast and conference call details
Group management will host a live audio webcast and conference call of the
presentation at 09.00 GMT today. The slides for this presentation can be
downloaded from DCC's website, www.dcc.ie (http://www.dcc.ie) .
The access details are as follows:
Ireland: +353 (0) 1 691 7842
UK: +44 (0) 203 936 2999
International: +44 (0) 203 936 2999
Passcode: 337425
Webcast link:
https://www.investis-live.com/dcc/67068eabb2cedb000e392a82/hjdtw
(https://eur02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.investis-live.com%2Fdcc%2F67068eabb2cedb000e392a82%2Fhjdtw&data=05%7C02%7Chdaly%40dcc.ie%7C61a8e1797ac74d8d516508dcf82e7932%7C5b7cb417ee004876ab2b81fab4a0c984%7C0%7C0%7C638658125724810920%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C0%7C%7C%7C&sdata=rODqn%2FdHsQ44kM4pWEGPhWwC%2BF7wIhL%2BXvP%2BML8D1Wo%3D&reserved=0)
This report, presentation slides and a replay of the audio will be made
available at www.dcc.ie (http://www.dcc.ie) .
About DCC plc
Invest in what the world needs
DCC is a leading international sales, marketing and support services group. We
provide solutions the world needs across three transformative sectors: energy,
healthcare and technology; where we acquire, improve and grow diverse
businesses. We bring our growth mindset to our businesses in 21 countries
across four continents, empowering our 16,700 employees to create long term
value - for our shareholders, customers, society and the planet.
Headquartered in Dublin, DCC plc is listed on the London Stock Exchange and is
a constituent of the FTSE 100. In our financial year ended 31 March 2024, DCC
generated revenues of £19.9 billion and adjusted operating profit
of £682.8 million. DCC has an excellent record, delivering compound annual
growth of 14% in adjusted operating profit and unbroken dividend growth of 13%
while maintaining high returns on capital employed over 30 years as a public
company.
Follow us on LinkedIn (https://www.linkedin.com/company/dcc-plc) .
www.dcc.ie (http://www.dcc.ie)
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.
Group & divisional performance Review
A summary of the Group's results for the six months ended 30 September 2024 is
as follows:
2024 2023
£'m £'m % change
Revenue 9,325 9,616 -3.0%
Adjusted operating profit1
DCC Energy 182.7 170.6 +7.0%
DCC Healthcare 38.1 38.3 -0.4%
DCC Technology 38.5 38.7 -0.4%
Group adjusted operating profit1 259.3 247.6 +4.7%
Finance costs (net) and other (53.1) (52.2)
Profit before net exceptionals, amortisation of intangible assets and tax 206.2 195.4 +5.5%
Net exceptional charge before tax (23.0) (12.2)
Amortisation of intangible assets (52.2) (53.5)
Profit before tax 131.0 129.7
Taxation (26.8) (28.3)
Profit after tax 104.2 101.4
Non-controlling interests (7.7) (8.4)
Attributable profit 96.5 93.0
Adjusted earnings per share(1) 158.5p 149.3p +6.2%
Dividend per share 66.19p 63.04p +5.0%
Free cash flow(2) (15.8) 54.5
Net debt at 30 September (excluding lease creditors) (1,092.1) (1,039.1)
Lease creditors (354.6) (347.4)
Net debt at 30 September (including lease creditors) (1,446.7) (1,386.5)
(1) Excluding net exceptionals and amortisation of intangible assets(
2) After net working capital and net capital expenditure and before net exceptionals, interest and tax payments
Income Statement Review
Group revenue
Overall, Group revenue decreased by 3.0% (1.8% on a constant currency basis)
to £9.3 billion, primarily due to lower revenue in DCC Energy where average
commodity prices were lower.
DCC Energy sold 7.1 billion litres of product in the first half, modestly
behind the prior year (-1.1%). Volumes in Energy Solutions increased by +0.4%,
despite the headwind of mild weather conditions. This was offset by a decline
in Energy Mobility volumes of 4.2%. Revenue in DCC Energy declined by 4.5% to
£6.6 billion, reflecting lower commodity prices and the modest overall
decline in volumes. DCC Healthcare recorded revenue of £415.1 million, in
line with the prior year on a constant currency basis and 1.3% behind on a
reported basis. Revenue in DCC Vital was in line with the prior year while in
HBI Health & Beauty Innovations, the UK business delivered good revenue
growth, offset by a decline in the US business. Revenue in DCC Technology was
£2.3 billion, an increase of 1.2% (+2.3% on a constant currency basis).
Revenue growth in Pro Tech was partly offset by a modest decline in Info Tech.
Group adjusted operating profit
Group adjusted operating profit increased by 4.7% to £259.3 million (+6.0% on
a constant currency basis), in the seasonally less significant first half of
the year. DCC Energy grew by 7.0%, while DCC Healthcare and DCC Technology
were broadly in line with the prior year. Following very good organic growth
in the prior year, especially in DCC Energy, organic growth was modest at
0.5%.
The impact on reported Group adjusted operating profit of foreign exchange
(FX) translation, M&A and organic growth was as follows:
Period FX translation M&A Organic Reported growth
H1 FY25 -1.3% +5.5% +0.5% +4.7%
H1 FY24 -0.2% +7.8% +4.4% +12.0%
The net impact of FX translation in the first half of the year was a headwind
of 1.3%, or £3.3 million, in the reported growth in adjusted operating
profit. This reflects average sterling exchange rates strengthening against
most of the Group's reporting currencies during the period.
Acquisitions completed in the prior year and in the current period contributed
5.5% of the reported operating profit growth. The material contribution during
the six-month period came from the prior year acquisition of Progas and the
current year acquisition of Next Energy, offset somewhat by the disposal of
our liquid gas business in Hong Kong & Macau.
The Group's organic operating profit growth was 0.5%, with organic growth in
DCC Energy and DCC Healthcare offset by a modest decline in DCC Technology.
The inflationary environment continues to be a significant feature but costs
were well managed during the period. The Group's like for like overhead cost
base was 2.8% ahead of prior year. Further commentary on the trading
performance of each of the three divisions is detailed below.
Divisional Performance Reviews
DCC Energy 2024 2023 % change % change CC
Volumes (billion litre equivalent)1 7.106bn 7.184bn -1.1%
Gross profit £830.1m £764.4m +8.6% +10.1%
Operating profit £182.7m £170.6m +7.0% +8.4%
Operating profit per litre 2.57ppl 2.38ppl
· DCC Energy delivered operating profit growth of 7.0% (8.4% constant
currency) in the seasonally less significant first half, driven by
acquisitions in Energy Solutions and good organic growth in Energy Mobility.
Acquisitions, net of the significant disposal in Hong Kong & Macau,
contributed the majority of the strong profit growth, while organic growth was
1.0%, notwithstanding a very strong prior year performance. DCC Energy
committed £106 million to acquisitions in the period.
· Volumes declined modestly (1.1%) compared with the prior year. Energy
Solutions volumes were in line with prior year (+0.4%), while volumes in
Energy Mobility decreased by 4.2%. Continued strong operational focus in
Energy Mobility and progress in non-fuel volume profitability more than offset
the lower volume impact. Within Energy Solutions, our non-volumetric Energy
Management Services ("EMS") revenues were up 3.0% on prior year.
· The share of operating profit from services, renewables and other products
("SRO") reduced modestly to 43%(2), down from 46% in the prior year
principally due to lower profitability in renewable power in Ireland which
recorded a very strong performance in the prior year. DCC Energy's Scope 3
emissions declined by 5.4%, highlighting the conversion of customers to
biofuel in particular. In delivering our Cleaner Energy in Your Power
strategy, we reduced the carbon intensity of our profits by 11.6% in the first
half of the year.
(1) Billion litres equivalent provides a standard metric for the different
products and solutions that DCC Energy sells. Metric tonnes and kilowatts of
power are converted to litres. A lot of the services and renewables do not
have associated volumes such as solar installations, heat pump solutions,
fleet services and energy efficiency services. Overall, c.33% of DCC Energy's
operating profit has no direct volume (litres equivalent) attached to it.
(2) Services, renewables and other ('SRO') products are not seasonally
weighted whereas our traditional and lower carbon activities are second half
weighted, so the share of DCC Energy operating profit from SRO is larger in
the first half of the financial year.
DCC Energy Solutions 2024 2023 % change % change CC
Volumes (billion litre equivalent) 4.850bn 4.829bn +0.4%
Operating profit £113.1m £104.1m +8.7% +10.1%
Operating profit per litre 2.33ppl 2.16ppl
DCC Energy Solutions grew operating profit by 8.7% (10.1% constant currency),
while volumes were in line with the prior year. EMS revenue grew 3.0%, driven
by acquisitions completed during the period and the second half of FY24. Our
Energy Solutions business launched a 'Solar as a Service' offering, which
includes a financing solution for customers with funding from partners. We
believe that this offer will help us to grow customer numbers and cement
long-term customer relationships, leading to the increased sales of
complementary recurring revenue solutions on-site. There are four operating
regions within DCC Energy Solutions: Continental Europe, UK & Ireland,
Scandinavia and North America.
In Continental Europe, we delivered good operating profit growth driven by
acquisitions and a strong performance in France. We acquired Acteam and
Copropriétés Diagnostic to further broaden our EMS presence across France,
where our existing businesses (trading under the 'Wewise' umbrella brand)
performed very strongly. We recorded strong growth in Germany and Austria, as
a result of the first-time contribution from Progas, Wirsol and Secundo.
Operating profit in the UK & Ireland grew very strongly, driven by organic
growth and the contribution from acquisitions in the prior year. The
performance in Ireland was robust, following a very strong prior year. Volumes
across the UK and Ireland in liquid gas and liquid fuel were in line with the
prior year. Operating profit in the UK benefited from energy management
acquisitions completed in the second half of the prior financial year,
primarily eEnergy (rebranded to Equity Energies), DTGen and the current year
acquisition of Next Energy. We continued to grow our market share in biofuel,
led by Hydrotreated Vegetable Oil (HVO). Customer numbers also grew strongly,
especially in Ireland.
In Scandinavia, operating profit declined modestly following a very strong
prior year performance. The modest decline reflected lower profits in our
aviation business in the region which had grown very strongly in the prior
year. Our liquid fuels and liquid gas businesses in the region performed well
and in line with expectations.
In North America our business primarily serves domestic and small commercial
heating customers, so it is significantly weighted to the second half of the
year. Operating profit declined, as weather was much warmer than the five-year
average throughout the period, but also during the final quarter of the prior
year which impacted customers tank levels entering the current year. Gross
margins have been resilient, despite the competitive market, although this was
offset by higher costs. We continue to invest in our capability in the region,
reflecting our ambitions for the growth and future development opportunity we
see in the market.
DCC Energy Mobility 2024 2023 % change % change CC
Volumes (billion litre equivalent) 2.256bn 2.354bn -4.2%
Operating profit £69.6m £66.5m +4.5% +5.8%
Operating profit per litre 3.08ppl 2.83ppl
DCC Energy Mobility operating profit increased by 4.5% (5.8% constant
currency) and almost all of the growth was organic. Volumes declined, mainly
driven by lower volumes in Denmark where the business exited a lower margin
contract with a retail partner. Although volumes declined, we delivered a
strong operational performance across our retail forecourt business, extending
our track record of improving our operating performance.
In the UK, we delivered very strong operating profit growth led by our fleet
service businesses, which is non-volume correlated. During the period we
acquired Cubo, a fleet telematics business that we bolted on during the
period. The acquisition reflects our ongoing investment in non-fuel services
for fleets as well as electric vehicle charging for cars and convenience
retail.
In France, operating profit was in line with prior year and expectations. The
market remained competitive, but the pricing environment was much improved
compared with the second half of FY24. In Scandinavia the business in Norway
recorded good operating profit growth, with a robust performance in Denmark.
DCC Healthcare 2024 2023 % change % change CC
Revenue £415.1m £420.5m -1.3% -0.3%
Gross profit £137.6m £130.8m +5.2% +6.3%
Operating profit £38.1m £38.3m -0.4% +0.4%
Operating margin 9.2% 9.1%
· DCC Healthcare delivered a robust performance in the first half of the
year. Operating profit was up 0.4% on an organic constant currency basis, and
very modestly behind (0.4%) on a reported basis.
· In DCC Vital, the Medical Devices and Primary Care businesses in Europe
performed well, while our UK Primary Care business continued to face
challenges from NHS funding restrictions. Our recently rebranded HBI Health
& Beauty Innovations ("HBI") business delivered good growth, particularly
in the UK.
· DCC Healthcare has implemented a range of strategic initiatives to drive
revenue growth and cost optimisation across the division. These include
strengthening the leadership team, driving product and process innovation, and
re-branding our consumer health business as we drive increased customer
engagement. We have also now completed the material capital expenditure
projects to expand capacity and capability in our consumer health business,
providing the platform to capture growth and share as demand recovers.
Divisional revenue
DCC Healthcare recorded revenue of £415.1 million, marginally behind the
prior year by 1.3% (-0.3% organic constant currency). Revenue in DCC Vital was
in line with the prior year. In HBI, the UK business delivered good revenue
growth, offset by a decline in the US business.
DCC Vital: Patient Health
In Medical Devices, the business delivered good organic profit growth across
our major markets of France, Germany and the UK. In Ireland the business
performed in line with expectations, having grown very strongly during the
last number of years. During the period the Irish business agreed to acquire
Iskus Health, subject to competition approval. This complementary bolt-on
acquisition is a supplier of single-use, medical and surgical devices to Irish
hospitals and is expected to complete in the coming months.
In Primary Care profitability was modestly behind the prior year. In Europe,
the businesses in Germany and Switzerland performed well and delivered profit
growth in line with expectations. This good performance was offset by a
decline in the UK business, where the market continues to be challenging,
principally due to NHS funding constraints.
Following the significant expansion of the business in recent years, our
European Medical Devices business has an exciting and innovative product
pipeline and extensive distribution reach across multiple geographies.
Meanwhile, we continued our strategic investment in technology in Primary Care
(e-commerce, digital and AI investments) to enhance sales growth in the UK and
Germany and to improve both customer experience and efficiency.
HBI Health & Beauty Innovations: Consumer Health
Our HBI business delivered good organic profit growth, driven by the
performance of the UK business. Although demand in the US has not yet
normalised, demand improved from a range of customers across the UK and
Europe, where the business recorded very strong organic growth, particularly
in beauty.
Following recent investments, we have enhanced our capability and capacity in
the product formats which are attracting the most customer interest - gummies
and stick packs. We have appointed a new CEO to the HBI business. We have also
launched a new common brand across the business, showcasing the breadth of our
offering and highlighting our credentials as a sustainable product development
and contract manufacturer. This will boost cross-selling opportunities across
formats and geographies.
DCC Technology 2024 2023 % change % change CC
Revenue £2.321bn £2.294bn +1.2% +2.3%
Gross profit £286.5m £288.6m -0.7% +0.5%
Operating profit £38.5m £38.7m -0.4% +1.1%
Operating margin 1.7% 1.7%
· Against the backdrop of continued weak market conditions, DCC Technology
performed robustly and in line with expectations, with operating profit up
1.1% on a constant currency basis and declining 0.4% on a reported basis.
Organically profits were back 1.4% in the first half of the year. Market
conditions reflect robust demand for Pro Tech products in North America but
relatively weaker demand for Info Tech consumer technology products in Europe
and Life Tech products in North America.
· We continued to improve profitability in our Info Tech business in the UK,
where the operational improvement programme has delivered cost reductions and
enhanced the quality of the business. We expect further improvement in
returns, as our programme continues. Despite inflationary pressures, we
reduced operating costs for the division compared with the prior year.
· DCC Technology commenced a commercial excellence programme in our North
American Pro Tech and Life Tech businesses. This will optimise operations to
drive significant improvement in profitability and returns over the next 24
months. We have already delivered results by reducing freight and transport
costs while improving product flow and warehouse efficiency.
Divisional revenue
Divisional revenue increased by 1.2% (+2.3% constant currency), mainly driven
by revenue growth in Pro Tech offsetting revenue decline in Info Tech where
demand for consumer technology products was weak in continental Europe.
Revenue was 0.2% higher organically.
Pro Tech
In Pro Tech, DCC Technology is the leading specialist distributor of AV
products globally, centred on our business in North America. We grew operating
profit and gained market share in the specialist AV segment in North America
where demand remained robust. During the period we acquired MDM Commercial
Inc, a small bolt on acquisition which broadens our professional AV
capabilities in North America. Operating profit declined in our smaller
European Pro Tech business, as market conditions remained softer in France and
Germany in particular.
Info Tech
Our Info Tech business distributes high-volume consumer and business IT
products to the retail and reseller channels in Europe, with our largest
markets being in the UK and Ireland. Consumer demand remained soft and little
different to the last two years across Europe. We continued to lower costs and
improved our gross margin in the UK business. The business in Ireland
performed well in the first half of the year. Operating profit declined in our
other Info Tech businesses in continental Europe, reflecting the weak consumer
demand environment.
Life Tech
In Life Tech we distribute consumer appliances and lifestyle technology
products to the retail and etail channels in North America. In the first half,
operating profit declined modestly because of lower demand for consumer
electronics and musical products. The business was also affected by
overstocking in certain market segments.
Finance costs (net) and other
Net finance costs and other, which includes the Group's net financing costs,
lease interest and the share of profit/loss of associated businesses,
increased modestly to £53.1 million (2023: £52.2 million) and reflects a
sustained higher interest rate environment throughout the period relative to
the prior year. This continued to impact the cost of the floating rate element
of the Group's gross debt, offset somewhat by an increased return on the
Group's gross cash. Approximately 70% of the Group's gross debt is fixed (30
September 2023: c. 60%). Average net debt, excluding lease creditors, in the
period was £1.3 billion, compared to an average net debt of £1.2 billion in
the prior year.
Net exceptional items and amortisation of intangible assets
The Group recorded a net exceptional charge after tax of £19.1 million in the
first six months of the year as follows:
£'m
Restructuring and integration costs and other (15.9)
Acquisition and related costs (11.1)
Profit on disposal 4.3
IAS 39 mark-to-market charge (0.3)
(23.0)
Tax attaching to exceptional items 3.9
Net exceptional charge (19.1)
Restructuring and integration costs and other of £15.9 million mainly relates
to the restructuring of operations across a number of businesses and recent
acquisitions. The majority of the cost relates to optimisation and integration
of operations in the Technology division. Acquisition and related costs
include the professional fees and tax costs relating to the evaluation and
completion of acquisition opportunities and amounted to £11.1 million.
During the period DCC Energy completed the sale of a majority stake in its
liquid gas business in Hong Kong & Macau. The transaction valued DCC's
business at an initial enterprise value of c.US$150 million (c.£117 million),
on a debt-free, cash-free basis and DCC retained a minority stake in the
combined business. The transaction resulted in a modest profit on disposal of
£4.3 million.
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 2024
this amounted to an exceptional non-cash charge of £0.3 million. The
cumulative net exceptional credit taken in respect of IAS 39 ineffectiveness
was £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
decreased slightly to £52.2 million from £53.5 million in the prior period.
Taxation
The effective tax rate for the Group in the first half of the year of 20.3% is
based on the anticipated mix of profits for the full year. It compares to a
full year effective tax rate in the prior year of 19.7%. The Group's effective
tax rate is influenced by the geographical mix of profits arising in any year
and the tax rates attributable to the individual jurisdictions. The higher tax
rate reflects corporation tax increases in a number of jurisdictions.
Adjusted earnings per share
Adjusted earnings per share increased by 6.2% to 158.5 pence (7.5% on a
constant currency basis), reflecting the increase in profit before exceptional
items and goodwill amortisation.
Dividend
The Board has decided to pay an interim dividend of 66.19 pence per share,
which represents a 5.0% increase on the prior year interim dividend of 63.04
pence per share. This dividend will be paid on 13 December 2024 to
shareholders on the register at the close of business on 22 November 2024.
Over our 30 years as a listed company, DCC has an unbroken record of dividend
growth at a compound annual rate of 13.2%.
Cash Flow, Development activity & Financial strength
Cash flow
As with its operating profit, the Group's operating cash flow is significantly
weighted towards the second half of the financial year. The cash flow of the
Group for the six months ended 30 September 2024 can be summarised as follows:
Six months ended 30 September 2024 2023
£'m £'m
Group operating profit 259.3 247.6
Increase in working capital (265.8) (154.1)
Depreciation (excluding ROU leased assets) and other 82.6 76.9
Operating cash flow (pre add-back for depreciation on ROU leased assets) 76.1 170.4
Capital expenditure (net) (86.1) (111.4)
(10.0) 59.0
Depreciation on ROU leased assets 43.3 39.9
Repayment of lease creditors (49.1) (44.4)
Free cash flow (15.8) 54.5
Interest and tax paid, net of dividend from equity accounted investments (92.8) (88.6)
Free cash flow (after interest and tax) (108.6) (34.1)
Acquisitions (164.1) (151.8)
Disposals 76.2 -
Dividends (132.8) (126.9)
Exceptional items (26.1) (7.8)
Share issues - 0.2
Net outflow (355.4) (320.4)
Opening net debt (including lease creditors) (1,147.1) (1,113.9)
Translation and other 55.8 47.8
Closing net debt (including lease creditors) (1,446.7) (1,386.5)
Analysis of closing net debt (including lease creditors):
Net debt at 30 September (excluding lease creditors) (1,092.1) (1,039.1)
Lease creditors at 30 September (354.6) (347.4)
(1,446.7) (1,386.5)
Free cash flow generation
Free cash flow in the six months ended 30 September 2024 of £15.8 million
(deficit) compares to £54.5 million in the prior year. On a rolling 12-month
basis (i.e., H1 FY25 and H2 FY24 cumulatively), free cash flow conversion
remained very strong at 88%.
Working capital
As expected, working capital increased by £265.8 million in the first half of
the financial year, reflecting the Group's typical seasonal outflow and the
very strong cash generation in the second half of the prior year. The seasonal
working capital requirements are driven particularly by DCC Technology and DCC
Energy Solutions and, as usual, are expected to largely reverse in the second
half of the year.
The absolute value of working capital at 30 September 2024 increased to
£508.3 million (£440.2 million at 30 September 2023), reflecting acquisition
activity in DCC Energy. Excluding acquisitions, the absolute level of working
capital was in line with prior year. Overall working capital days at 30
September 2024 was 9.5 days sales (30 September 2023: 7.4 days sales)
reflecting recently completed acquisitions.
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. The level of supply chain
financing at 30 September 2024 was £160.0 million (2023: £122.8 million)
reflecting growth in our UK Info Tech business with retail customers. Supply
chain financing had a positive impact on Group working capital days of 3.0
days (30 September 2023: 2.1 days).
Net capital expenditure
Net capital expenditure for the six months of £86.1 million (2023: 111.4
million) was net of disposal proceeds (£9.7 million) and reflects continued
investment in development initiatives across the Group.
2024 2023
£'m £'m
DCC Energy 71.9 89.7
DCC Healthcare 11.2 17.7
DCC Technology 3.0 4.0
Total 86.1 111.4
Capital expenditure in DCC Energy primarily comprised expenditure on tanks,
cylinders and installations, with a focus on supporting new and existing
liquid gas customers in Energy Solutions. In Mobility, there was investment to
maintain our retail sites and upgrades across the business, including adding
further lower emission product capability, electric vehicle fast charging and
related forecourt services in the Nordics and France in particular. In DCC
Healthcare, the spending primarily related to increased manufacturing
capability and capacity across HBI Health & Beauty Innovations. In DCC
Technology, capital expenditure included continued enterprise resource
planning investment in Europe. Net capital expenditure for the Group exceeded
the depreciation charge of £82.7 million (excluding right-of-use leased
assets) in the period by £3.4 million.
Total cash spend on acquisitions in the six months to 30 September 2024
The total cash spend on acquisitions in the six months ended 30 September 2024
was £164.1 million. This included the completion of the acquisition of Next
Energy, Secundo Photovoltaik and Copropriétés Diagnostic in DCC Energy which
were announced in the prior year Results Announcement in May 2024. Payment of
deferred and contingent acquisition consideration previously provided amounted
to £15.7 million.
Committed acquisitions
Committed acquisitions in the period amounted to £129.3 million as follows:
2024 2023
£'m £'m
DCC Energy 105.6 310.5
DCC Healthcare 15.3 -
DCC Technology 8.4 -
Total 129.3 310.5
DCC continues to be very active from a development perspective. The Group's
recent acquisitions include:
DCC Energy
DCC Energy has committed approximately £105.6 million to new acquisitions to
support its Cleaner Energy in Your Power strategy. In addition to a number of
small bolt-on acquisitions, DCC Energy has acquired:
· In July 2024, DCC Energy completed the acquisition of WIRSOL Roof Solutions
("Wirsol") in Germany. Wirsol has been providing high quality solar
photovoltaic (PV) and battery storage solutions for more than 20 years. Based
in Waghäusel, Germany, the business employs 120 people and has planned and
installed over 16,000 solar systems for commercial and private customers
throughout Germany. Following the recent acquisition of Progas in the liquid
gas market, Wirsol provides a platform to now develop our Energy Management
Services ("EMS") offering in the German energy market-the largest in Europe.
· In July 2024, DCC Energy completed the acquisition of Cubo, a fleet
telematics business providing integrated telematics & communication
solutions in the UK & Ireland. The complementary acquisition provides
additional digital solutions to our fleet service customers.
· DCC Energy acquired Acteam ENR ("Acteam") in September 2024, a French solar
PV business based in Toulouse. Acteam provides project development,
engineering, project management along with construction support and
supervision services for commercial solar PV projects. The acquisition is
geographically complementary to our Wewise French business and will enable us
to develop our energy management services capability in the south of France.
· In November 2024, DCC Energy completed the acquisition of MG Habitat, a
French energy services business providing design, installation and maintenance
services for solar PV, heat-pumps and other energy installations.
DCC Healthcare
DCC Healthcare has agreed to acquire Iskus Health, subject to clearance from
the Competition and Consumer Protection Commission in Ireland. Iskus,
established in 2000, is an independent supplier of single-use, medical and
surgical devices to the Irish healthcare market. The proposed bolt on
acquisition is complementary to DCC Healthcare's existing Irish business.
DCC Technology
DCC Technology completed the acquisition of MDM Commercial Inc, a distributor
of hospitality and healthcare professional AV equipment in the USA. The
business is headquartered in Jacksonville, Florida with 40 employees. The
modest acquisition continues DCC Technology's strategy of building a leading
Pro AV distribution business in North America.
Divestment of liquid gas business in Hong Kong & Macau
In July 2024, DCC Energy completed the sale of a majority stake in its liquid
gas business in Hong Kong & Macau to CITADEL Pacific Ltd, an Asian
industrial group with an existing and complementary business in the region.
The transaction valued DCC's business at an initial enterprise value of
c.US$150 million (c.£117 million), on a debt-free, cash-free basis and DCC
retained a minority stake in the combined business. Further details on the
transaction can be found in DCC's stock exchange announcement of 11 July 2024.
Financial strength
DCC has always maintained a strong balance sheet and it remains an important
enabler of the Group's strategy. A strong balance sheet provides many
strategic and commercial benefits, including enabling DCC to take advantage of
acquisitive or organic development opportunities as they arise. At 30
September 2024, the Group had net debt (including lease creditors) of £1.4
billion, net debt (excluding lease creditors) of £1.1 billion, cash resources
(net of overdrafts) of £800 million and total equity of £3.1 billion.
Historically, the Group has raised its term debt in the US private placement
market. Recently, (see below) the Group also has become an issuer in the
public debt markets. The Group's term debt has an average maturity of 5.3
years. The Group repaid £263 million of private placement debt in May 2024.
DCC has taken a pro-active approach to the credit markets since going public.
The Group has been active in the US private placement debt market since 1996
and has built up a robust and well-diversified funding portfolio, with a
balanced maturity profile. DCC's long term banking partners, investors and
suppliers have always appreciated the strong credit quality of the Company. In
November 2023 S&P Global Ratings issued a BBB rating and Fitch issued a
BBB rating for DCC in the first public credit rating opinions of the Company.
In June 2024 DCC established a Euro Medium Term Note (EMTN) programme and
issued its inaugural public market debt instrument, a benchmark €500 million
seven-year senior unsecured bond. The bond raise refinanced recently redeemed
and shortly maturing private placement debt.
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 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 87 to 91 of the 2024 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 in place in relation to
identified risks are designed to provide a reasonable and proportionate, and
not an absolute, level of protection against the impact of the events in
question.
Group Income Statement
For the six months ended 30 September 2024
Unaudited 6 months ended Unaudited 6 months ended Audited year ended
30 September 2024 30 September 2023 31 March 2024
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 9,325,248 - 9,325,248 9,615,978 - 9,615,978 19,858,763 - 19,858,763
Cost of sales (8,071,015) - (8,071,015) (8,432,158) - (8,432,158) (17,261,487) - (17,261,487)
Gross profit 1,254,233 - 1,254,233 1,183,820 - 1,183,820 2,597,276 - 2,597,276
Administration expenses (403,364) - (403,364) (364,396) - (364,396) (673,676) - (673,676)
Selling and distribution expenses (611,009) - (611,009) (583,143) - (583,143) (1,270,666) - (1,270,666)
Other operating income/(expenses) 19,462 (22,725) (3,263) 11,361 (12,201) (840) 29,846 (39,309) (9,463)
Adjusted operating profit 259,322 (22,725) 236,597 247,642 (12,201) 235,441 682,780 (39,309) 643,471
Amortisation of intangible assets (52,178) - (52,178) (53,512) - (53,512) (114,075) - (114,075)
Operating profit 5 207,144 (22,725) 184,419 194,130 (12,201) 181,929 568,705 (39,309) 529,396
Finance costs (61,817) (259) (62,076) (60,270) - (60,270) (121,888) (873) (122,761)
Finance income 8,512 - 8,512 7,923 12 7,935 16,512 - 16,512
Equity accounted investments' profit after tax 184 - 184 137 - 137 604 - 604
Profit before tax 154,023 (22,984) 131,039 141,920 (12,189) 129,731 463,933 (40,182) 423,751
Income tax expense 7 (30,754) 3,923 (26,831) (28,325) (15) (28,340) (89,631) 6,418 (83,213)
Profit after tax for the financial period 123,269 (19,061) 104,208 113,595 (12,204) 101,391 374,302 (33,764) 340,538
Profit attributable to:
Owners of the Parent Company 115,611 (19,061) 96,550 105,233 (12,204) 93,029 359,570 (33,315) 326,255
Non-controlling interests 7,658 - 7,658 8,362 - 8,362 14,732 (449) 14,283
123,269 (19,061) 104,208 113,595 (12,204) 101,391 374,302 (33,764) 340,538
Earnings per ordinary share
Basic earnings per share 8 97.65p 94.20p 330.24p
Diluted earnings per share 8 97.60p 94.14p 329.85p
Adjusted basic earnings per share 8 158.51p 149.27p 455.01p
Adjusted diluted earnings per share 8 158.43p 149.19p 454.49p
Group Statement of Comprehensive Income
For the six months ended 30 September 2024
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2024 2023 2024
£'000 £'000 £'000
Group profit for the period 104,208 101,391 340,538
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss
Currency translation:
- arising in the period (88,727) (27,569) (66,207)
- recycled to the Income Statement on disposal (13,041) - -
Movements relating to cash flow hedges 23,545 59,931 37,117
Movement in deferred tax liability on cash flow hedges (4,779) (11,567) (6,937)
(83,002) 20,795 (36,027)
Items that will not be reclassified to profit or loss
Group defined benefit pension obligations:
- remeasurements (540) 1,839 24
- movement in deferred tax asset 110 (373) (117)
(430) 1,466 (93)
Other comprehensive income for the period, net of tax (83,432) 22,261 (36,120)
Total comprehensive income for the period 20,776 123,652 304,418
Attributable to:
Owners of the Parent Company 15,365 116,772 292,686
Non-controlling interests 5,411 6,880 11,732
20,776
123,652 304,418
Group Balance Sheet
As at 30 September 2024
Notes Unaudited Unaudited Audited
30 Sept. 30 Sept. 31 March
2024 2023 2024
£'000 £'000 £'000
ASSETS
Non-current assets
Property, plant and equipment 1,397,165 1,369,547 1,430,513
Right-of-use leased assets 339,043 333,975 349,925
Intangible assets and goodwill 3,070,129 3,050,965 3,136,945
Equity accounted investments 67,482 45,770 32,825
Deferred income tax assets 79,276 68,836 81,258
Derivative financial instruments 21,442 52,021 42,760
4,974,537 4,921,114 5,074,226
Current assets
Inventories 1,237,923 1,335,355 1,072,061
Trade and other receivables 1,854,135 2,015,679 2,172,422
Derivative financial instruments 25,810 71,107 55,064
Cash and cash equivalents 829,583 882,923 1,109,446
3,947,451 4,305,064 4,408,993
Total assets 8,921,988 9,226,178 9,483,219
EQUITY
Capital and reserves attributable to owners of the Parent Company
Share capital 17,422 17,422 17,422
Share premium 883,893 883,873 883,890
Share based payment reserve 10 68,688 58,190 63,806
Cash flow hedge reserve 10 666 84 (18,100)
Foreign currency translation reserve 10 (34,648) 102,442 64,873
Other reserves 10 932 932 932
Retained earnings 2,042,215 1,909,099 2,078,568
Equity attributable to owners of the Parent Company 2,979,168 2,972,042 3,091,391
Non-controlling interests 96,749 86,789 91,641
Total equity 3,075,917 3,058,831 3,183,032
LIABILITIES
Non-current liabilities
Borrowings 1,816,571 1,600,671 1,574,775
Lease creditors 282,012 274,607 284,856
Derivative financial instruments 22,950 39,305 27,536
Deferred income tax liabilities 262,845 261,312 286,217
Post employment benefit obligations 13 6,948 (13,482) 6,557
Provisions for liabilities 292,520 294,957 306,367
Acquisition related liabilities 135,861 110,195 72,009
Government grants 2,532 2,914 2,704
2,822,239 2,570,479 2,561,021
Current liabilities
Trade and other payables 2,619,353 2,944,129 3,054,108
Current income tax liabilities 65,669 79,849 81,095
Borrowings 112,741 375,804 368,743
Lease creditors 72,644 72,763 77,527
Derivative financial instruments 16,662 29,385 20,914
Provisions for liabilities 71,470 53,770 67,011
Acquisition related liabilities 65,293 41,168 69,768
3,023,832 3,596,868 3,739,166
Total liabilities 5,846,071 6,167,347 6,300,187
Total equity and liabilities 8,921,988 9,226,178 9,483,219
Net debt included above (excluding lease creditors) 11 (1,092,089) (1,039,114) (784,698)
Group Statement of Changes in Equity
For the six months ended 30 September 2024
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 2024 17,422 883,890 2,078,568 111,511 3,091,391 91,641 3,183,032
Profit for the period - - 96,550 - 96,550 7,658 104,208
Other comprehensive income:
Currency translation:
- arising in the period - - - (86,480) (86,480) (2,247) (88,727)
- recycled to the Income Statement on disposal - - - (13,041) (13,041) - (13,041)
Group defined benefit pension obligations:
- remeasurements - - (540) - (540) - (540)
- movement in deferred tax asset - - 110 - 110 - 110
Movements relating to cash flow hedges - - - 23,545 23,545 - 23,545
Movement in deferred tax liability on cash flow hedges -
- - (4,779) (4,779) - (4,779)
Total comprehensive income - - 96,120 (80,755) 15,365 5,411 20,776
Re-issue of treasury shares - 3 - - 3 - 3
Share based payment - - - 4,882 4,882 - 4,882
Dividends - - (132,473) - (132,473) (303) (132,776)
At 30 September 2024 17,422 883,893 2,042,215 35,638 2,979,168 96,749 3,075,917
For the six months ended 30 September 2023
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 2023 17,422 883,669 1,941,223 135,777 2,978,091 80,219 3,058,310
Profit for the period - - 93,029 - 93,029 8,362 101,391
Other comprehensive income:
Currency translation - - - (26,087) (26,087) (1,482) (27,569)
Group defined benefit pension obligations:
- remeasurements - - 1,839 - 1,839 - 1,839
- movement in deferred tax asset - - (373) - (373) - (373)
Movements relating to cash flow hedges - - - 59,931 59,931 - 59,931
Movement in deferred tax liability on cash flow hedges -
- - (11,567) (11,567) - (11,567)
Total comprehensive income - - 94,495 22,277 116,772 6,880 123,652
Re-issue of treasury shares - 204 - - 204 - 204
Share based payment - - - 3,594 3,594 - 3,594
Dividends - - (126,619) - (126,619) (310) (126,929)
At 30 September 2023 17,422 883,873 1,909,099 161,648 2,972,042 86,789 3,058,831
Group Cash Flow Statement
For the six months ended 30 September 2024
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2024 2023 2024
Notes £'000 £'000 £'000
Cash generated from operations before exceptionals 12 119,390 210,308 995,793
Exceptionals (26,085) (7,810) (30,934)
Cash generated from operations 93,305 202,498 964,859
Interest paid (including lease interest) (54,904) (57,548) (118,780)
Income tax paid (52,900) (45,586) (124,057)
Net cash flow from operating activities (14,499) 99,364 722,022
Investing activities
Inflows:
Proceeds from disposal of property, plant and equipment 9,725 3,404 6,666
Dividends received from equity accounted investments 92 1,234 1,261
Government grants received in relation to property, plant & equipment 32 2,672 2,669
Disposal of subsidiaries and equity accounted investments 76,160 - 17,668
Interest received 8,628 8,003 15,285
94,637 15,313 43,549
Outflows:
Purchase of property, plant and equipment (95,878) (117,434) (230,354)
Acquisition of subsidiaries and equity accounted investments 14 (148,353) (121,298) (288,155)
Payment of accrued acquisition related liabilities (15,719) (30,460) (50,334)
(259,950) (269,192) (568,843)
Net cash flow from investing activities (165,313) (253,879) (525,294)
Financing activities
Inflows:
Proceeds from issue of shares 3 204 221
Net cash inflow on derivative financial instruments 49,995 64,951 69,182
Increase in interest-bearing loans and borrowings 427,250 - -
477,248 65,155 69,403
Outflows:
Repayment of interest-bearing loans and borrowings (367,696) (270,836) (270,836)
Repayment of lease creditors (principal) (42,745) (39,143) (82,187)
Dividends paid to owners of the Parent Company 9 (132,473) (126,619) (188,817)
Dividends paid to non-controlling interests (303) (310) (310)
(543,217) (436,908) (542,150)
Net cash flow from financing activities (65,969) (371,753) (472,747)
Change in cash and cash equivalents (245,781) (526,268) (276,019)
Translation adjustment (27,400) (2,517) (22,341)
Cash and cash equivalents at beginning of period 1,072,846 1,371,206 1,371,206
Cash and cash equivalents at end of period 799,665 842,421 1,072,846
Cash and cash equivalents consists of:
Cash and short-term bank deposits 11 829,583 882,923 1,109,446
Overdrafts 11 (29,918) (40,502) (36,600)
799,665 842,421 1,072,846
Notes to the Condensed Financial Statements
For the six months ended 30 September 2024
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
2024 have been prepared in accordance with International Financial Reporting
Standards ('IFRS'), the International Financial Reporting Interpretations
Committee ('IFRIC') and in accordance with IAS 34 Interim Financial Reporting
as adopted by the European Union. The Group condensed interim financial
statements have also been prepared in accordance with the Transparency
(Directive 2004/109/EC) Regulations 2007 and the related Transparency rules of
the Irish Financial Services Regulatory Authority.
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 2024 and the comparative figures for the six months ended 30
September 2023 are unaudited and have not been reviewed by the Auditors. The
summary financial statements for the year ended 31 March 2024 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 2024 Annual Report and are described in those financial
statements on pages 226 to 235.
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:
· Classification of liabilities as Current or Non-Current and Non-current
Liabilities with Covenants - Amendments to IAS 1
· Disclosure of supplier finance arrangements - Amendments to IAS 7 and IFRS
7
· Lease liability in a sale-and-leaseback - 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
87 to 91 of the 2024 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
2024 2023 2024 2024 2023 2024
Stg£1= Stg£1= Stg£1= Stg£1= Stg£1= Stg£1=
Euro 1.1777 1.1547 1.1563 1.1970 1.1566 1.1695
Danish krone 8.7842 8.6029 8.6183 8.9251 8.6249 8.7218
Swedish krona 13.5440 13.3771 13.2851 13.5265 13.3385 13.4780
Norwegian krone 13.6951 13.4042 13.3529 14.0825 13.0158 13.6814
US dollar 1.2759 1.2566 1.2541 1.3402 1.2253 1.2643
Canadian dollar 1.7418 1.6934 1.6932 1.8115 1.6455 1.7158
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 three operating segments (as identified under IFRS
8 Operating Segments) and generates revenue through the following activities:
DCC Energy operates through two business segments, Energy Solutions and
Mobility. The Energy Solutions business is focused on reducing the complexity
of energy transition and delivering affordable energy solutions. The Mobility
business is focused on developing multi-energy networks and services for
people and businesses on the move. DCC Energy is accelerating the net zero
journey of energy consumers by leading the sales, marketing and distribution
of low carbon energy solutions.
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 and domestic appliances and lifestyle
products to retailers and consumers.
The chief operating decision maker monitors the operating results of segments
separately 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
('adjusted operating profit') and return on capital employed. 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 2024 amounted to
£8.9 billion. This figure was not materially different to the equivalent
figure at 31 March 2024 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 2024
DCC DCC DCC Total
Energy Healthcare Technology £'000
£'000 £'000 £'000
Segment revenue 6,589,230 415,086 2,320,932 9,325,248
Adjusted operating profit 182,662 38,152 38,508 259,322
Amortisation of intangible assets (36,201) (4,796) (11,181) (52,178)
Net operating exceptionals (note 6) (5,223) (1,824) (15,678) (22,725)
Operating profit 141,238 31,532 11,649 184,419
Unaudited six months ended 30 September 2023
DCC DCC DCC Total
Energy Healthcare Technology £'000
£'000 £'000 £'000
Segment revenue 6,901,527 420,476 2,293,975 9,615,978
Adjusted operating profit 170,644 38,317 38,681 247,642
Amortisation of intangible assets (33,544) (5,670) (14,298) (53,512)
Net operating exceptionals (note 6) (3,022) (1,001) (8,178) (12,201)
Operating profit 134,078 31,646 16,205 181,929
Audited year ended 31 March 2024
DCC DCC DCC Total
Energy Healthcare Technology £'000
£'000 £'000 £'000
Segment revenue 14,224,938 859,379 4,774,446 19,858,763
Adjusted operating profit 502,961 88,099 91,720 682,780
Amortisation of intangible assets (77,236) (10,550) (26,289) (114,075)
Net operating exceptionals (note 6) (14,858) (5,087) (19,364) (39,309)
Operating profit 410,867 72,462 46,067 529,396
(b) By geography
The Group has a presence in 21 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. Revenue from operations is derived almost entirely from the sale of
goods and is disclosed based on the location of the entity selling the goods.
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2024 2023 2024
£'000 £'000 £'000
Republic of Ireland (country of domicile) 893,929 957,401 2,082,413
United Kingdom 3,106,667 3,199,914 6,534,555
France 1,623,734 1,629,130 3,445,434
United States 992,330 971,226 1,965,614
Rest of World 2,708,588 2,858,307 5,830,747
9,325,248 9,615,978 19,858,763
(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 Energy segment is of limited relevance
due to the influence of changes in underlying energy product costs on absolute
revenues. Whilst changes in underlying energy product costs will change
percentage operating margins, this has little relevance in the downstream
energy distribution market in which this segment operates 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 this segment 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 2024
DCC DCC DCC Total
Energy Healthcare Technology £'000
£'000 £'000 £'000
Republic of Ireland (country of domicile) 704,343 56,079 133,507 893,929
United Kingdom 2,157,360 197,710 751,597 3,106,667
France 1,461,254 28,759 133,721 1,623,734
North America 70,470 62,614 936,171 1,069,255
Rest of World 2,195,803 69,924 365,936 2,631,663
Revenue 6,589,230 415,086 2,320,932 9,325,248
Products transferred at point in time 6,589,230 415,086 2,320,932 9,325,248
Energy solutions products and services 4,024,262 - - 4,024,262
Energy mobility products and services 2,564,968 - - 2,564,968
Medical and pharmaceutical products - 247,905 - 247,905
Nutrition and health & beauty products - 167,181 - 167,181
Technology products and services - - 2,320,932 2,320,932
Revenue 6,589,230 415,086 2,320,932 9,325,248
Unaudited six months ended 30 September 2023
DCC DCC DCC Total
Energy Healthcare Technology £'000
£'000 £'000 £'000
Republic of Ireland (country of domicile) 730,753 60,438 166,210 957,401
United Kingdom 2,258,335 185,772 755,807 3,199,914
France 1,475,570 26,939 126,621 1,629,130
North America 74,135 74,710 903,337 1,052,182
Rest of World 2,362,734 72,617 342,000 2,777,351
Revenue 6,901,527 420,476 2,293,975 9,615,978
Products transferred at point in time 6,901,527 420,476 2,293,975 9,615,978
Energy solutions products and services 4,131,388 - - 4,131,388
Energy mobility products and services 2,770,139 - - 2,770,139
Medical and pharmaceutical products - 249,093 - 249,093
Nutrition and health & beauty products - 171,383 - 171,383
Technology products and services - - 2,293,975 2,293,975
Revenue 6,901,527 420,476 2,293,975 9,615,978
Audited year ended 31 March 2024
DCC DCC DCC Total
Energy Healthcare Technology £'000
£'000 £'000 £'000
Republic of Ireland (country of domicile) 1,591,561 119,323 371,529 2,082,413
United Kingdom 4,501,053 380,877 1,652,625 6,534,555
France 3,115,534 55,218 274,682 3,445,434
North America 254,370 159,427 1,721,283 2,135,080
Rest of World 4,762,420 144,534 754,327 5,661,281
Revenue 14,224,938 859,379 4,774,446 19,858,763
Products transferred at point in time 14,224,938 859,379 4,774,446 19,858,763
Energy solutions products and services 8,871,109 - - 8,871,109
Energy mobility products and services 5,353,829 - - 5,353,829
Medical and pharmaceutical products - 498,867 - 498,867
Nutrition and health & beauty products - 360,512 - 360,512
Technology products and services - - 4,774,446 4,774,446
Revenue 14,224,938 859,379 4,774,446 19,858,763
6. Exceptionals
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2024 2023 2024
£'000 £'000 £'000
Restructuring and integration costs and other (15,938) (8,411) (28,142)
Acquisition and related costs (11,097) (3,790) (14,347)
Profit on disposal of subsidiary undertaking 4,310 - -
Adjustments to contingent acquisition consideration - - 3,180
Net operating exceptional items (22,725) (12,201) (39,309)
Mark to market of swaps and related debt (259) 12 (873)
Net exceptional items before taxation (22,984) (12,189) (40,182)
Income tax and deferred tax attaching to exceptional items 3,923 (15) 6,418
Net exceptional items after taxation (19,061) (12,204) (33,764)
Non-controlling interests share of net exceptional items after taxation - - 449
Net exceptional items attributable to owners of the Parent Company (19,061) (12,204) (33,315)
Restructuring and integration costs and other of £15.938 million mainly
relates to the restructuring of operations across a number of businesses and
recent acquisitions. The majority of the cost relates to optimisation and
integration of operations in the Technology division.
Acquisition and related costs include the professional fees and tax costs
relating to the evaluation and completion of acquisition opportunities and
amounted to £11.097 million.
During the period DCC Energy completed the sale of a majority stake in its
liquid gas business in Hong Kong & Macau. The transaction valued DCC's
business at an initial enterprise value of c.US$150 million (c.£117 million),
on a debt-free, cash-free basis and DCC retained a minority stake in the
combined business. The transaction resulted in a modest profit on disposal of
£4.310 million.
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 2024
this amounted to an exceptional non-cash charge of £0.259 million. The
cumulative net exceptional credit taken in respect of IAS 39 ineffectiveness
was £0.280 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 20.3%
(six months ended 30 September 2023: 20.3% and year ended 31 March 2024:
19.7%).
8. Earnings per Ordinary Share
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2024 2023 2024
£'000 £'000 £'000
Profit attributable to owners of the Parent Company 96,550 93,029 326,255
Amortisation of intangible assets after tax 41,111 42,192 89,957
Exceptionals after tax (note 6) 19,061 12,204 33,315
Adjusted profit after taxation and non-controlling interests 156,722 147,425 449,527
Unaudited Unaudited Audited
Basic earnings per ordinary share 6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2024 2023 2024
pence pence pence
Basic earnings per ordinary share 97.65p 94.20p 330.24p
Amortisation of intangible assets after tax 41.58p 42.72p 91.06p
Exceptionals after tax 19.28p 12.35p 33.71p
Adjusted basic earnings per ordinary share 158.51p 149.27p 455.01p
Weighted average number of ordinary shares in issue (thousands) 98,869 98,762 98,794
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
Diluted earnings per ordinary share 6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2024 2023 2024
pence pence pence
Diluted earnings per ordinary share 97.60p 94.14p 329.85p
Amortisation of intangible assets after tax 41.56p 42.70p 90.95p
Exceptionals after tax 19.27p 12.35p 33.69p
Adjusted diluted earnings per ordinary share 158.43p 149.19p 454.49p
Weighted average number of ordinary shares in issue (thousands) 98,925 98,815 98,909
The earnings used for the purposes of the diluted earnings per ordinary share
calculations were £96.550 million (six months ended 30 September 2023:
£93.029 million) and £156.722 million (six months ended 30 September 2023:
£147.425 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 2024 was
98.925 million (six months ended 30 September 2023: 98.815 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
2024 2023 2024
'000 '000 '000
Weighted average number of ordinary shares in issue 98,869 98,762 98,794
Dilutive effect of options and awards 56 53 115
Wtd. average number of ordinary shares for diluted earnings per share 98,925 98,815 98,909
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.
9. Dividends
Dividends paid per ordinary share: Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2024 2023 2024
£'000 £'000 £'000
Interim - paid 63.04 pence per share on 15 December 2023 - - 62,373
Final - paid 133.53 pence per share on 18 July 2024
(2024: paid 127.17 pence per share on 20 July 2023)
132,473 126,619 126,444
132,473 126,619 188,817
On 11 November 2024, the Board approved an interim dividend of 66.19 pence per
share (£65.446 million). These condensed interim financial statements do not
reflect this dividend payable.
10. Other Reserves
For the six months ended 30 September 2024
Share based payment Cash flow Foreign Other Total
reserve
hedge
currency translation reserve
reserves
£'000
£'000
reserve
£'000
£'000
£'000
At 1 April 2024 63,806 (18,100) 64,873 932 111,511
Currency translation:
- arising in the period - - (86,480) - (86,480)
- recycled to the Income Statement on disposal - - (13,041) - (13,041)
Movements relating to cash flow hedges - 23,545 - - 23,545
Movement in deferred tax liability on cash flow hedges - (4,779) - - (4,779)
Share based payment 4,882 - - - 4,882
At 30 September 2024 68,688 666 (34,648) 932 35,638
For the six months ended 30 September 2023
Share based payment Cash flow Foreign Other Total
reserve
hedge
currency translation reserve
reserves
£'000
£'000
reserve
£'000
£'000
£'000
At 1 April 2023 54,596 (48,280) 128,529 932 135,777
Currency translation - - (26,087) - (26,087)
Movements relating to cash flow hedges - 59,931 - - 59,931
Movement in deferred tax liability on cash flow hedges - (11,567) - - (11,567)
Share based payment 3,594 - - - 3,594
At 30 September 2023 58,190 84 102,442 932 161,648
For the year ended 31 March 2024
Share based payment Cash flow Foreign Other Total
reserve
hedge
currency translation reserve
reserves
£'000
£'000
reserve
£'000
£'000
£'000
At 1 April 2023 54,596 (48,280) 128,529 932 135,777
Currency translation - - (63,656) - (63,656)
Movements relating to cash flow hedges - 37,117 - - 37,117
Movement in deferred tax liability on cash flow hedges - (6,937) - - (6,937)
Share based payment 9,210 - - - 9,210
At 31 March 2024 63,806 (18,100) 64,873 932 111,511
11. Analysis of Net Debt
Unaudited Unaudited Audited
30 Sept. 30 Sept. 31 March
2024 2023 2024
£'000 £'000 £'000
Non-current assets
Derivative financial instruments 21,442 52,021 42,760
Current assets
Derivative financial instruments 25,810 71,107 55,064
Cash and cash equivalents 829,583 882,923 1,109,446
855,393 954,030 1,164,510
Non-current liabilities
Derivative financial instruments (22,950) (39,305) (27,536)
Bank borrowings - (34,584) (34,205)
Unsecured Notes (1,816,571) (1,566,087) (1,540,570)
(1,839,521) (1,639,976) (1,602,311)
Current liabilities
Bank borrowings (29,918) (40,502) (36,600)
Derivative financial instruments (16,662) (29,385) (20,914)
Unsecured Notes (82,823) (335,302) (332,143)
(129,403) (405,189) (389,657)
Net debt (excluding lease creditors) (1,092,089) (1,039,114) (784,698)
Lease creditors (non-current) (282,012) (274,607) (284,856)
Lease creditors (current) (72,644) (72,763) (77,527)
Total lease creditors (354,656) (347,370) (362,383)
Net debt (including lease creditors) (1,446,745) (1,386,484) (1,147,081)
An analysis of the maturity profile of the Group's net debt (including lease
creditors) at 30 September 2024 is as follows:
As at 30 September 2024 Less than Between Between Over Total
1 year
1 and 2
2 and 5
5 years
£'000
£'000
years
years
£'000
£'000 £'000
Cash and short-term deposits 829,583 - - - 829,583
Overdrafts (29,918) - - - (29,918)
Cash and cash equivalents 799,665 - - - 799,665
Unsecured Notes (82,823) (206,605) (672,202) (937,764) (1,899,394)
Derivative financial instruments:
- Unsecured Notes 10,760 19,752 (18,465) - 12,047
- Other (1,612) (2,795) - - (4,407)
Net debt (excluding lease creditors) 725,990 (189,648) (690,667) (937,764) (1,092,089)
Lease creditors (72,644) (57,733) (109,011) (115,268) (354,656)
Net debt (including lease creditors) 653,346 (247,381) (799,678) (1,053,032) (1,446,745)
The Group's Unsecured Notes fall due between 25 April 2025 and 4 April 2034
with an average maturity of 5.3 years at 30 September 2024. The full fair
value of a hedging derivative is allocated to the time period corresponding to
the maturity of the hedged item.
12. Cash Generated from Operations
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2024 2023 2024
Notes £'000 £'000 £'000
Cash flow from operating activities
Profit for the period 104,208 101,391 340,538
Add back non-operating expenses/(income):
- tax 26,831 28,340 83,213
- share of equity accounted investments' profit after tax (184) (137) (604)
- net operating exceptionals 6 22,725 12,201 39,309
- net finance costs 53,564 52,335 106,249
Group operating profit before exceptionals 207,144 194,130 568,705
Share-based payments expense 4,882 3,594 9,210
Depreciation (including right-of-use leased assets) 126,008 116,329 240,194
Amortisation of intangible assets 52,178 53,512 114,075
Profit on disposal of property, plant and equipment (4,819) (580) (1,148)
Amortisation of government grants (160) (208) (376)
Other (45) (2,387) 8,562
(Increase)/decrease in working capital (265,798) (154,082) 56,571
Cash generated from operations before exceptionals 119,390 210,308 995,793
13. Post Employment Benefit Obligations
The Group's defined benefit pension schemes' assets were measured at fair
value at 30 September 2024. The defined benefit pension schemes' liabilities
at 30 September 2024 were updated to reflect material movements in underlying
assumptions.
The Group's post-employment benefit obligations moved from a net liability of
£6.557 million at 31 March 2024 to a net liability of £6.948 million at 30
September 2024. This movement was primarily driven by an actuarial loss on
liabilities arising from a decrease in the discount rates used to value the
liabilities of the Irish and German schemes.
The following actuarial assumptions have been made in determining the Group's
retirement benefit obligation for the six months ended 30 September 2024:
Discount rate Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2024 2023 2024
Republic of Ireland 3.40% 4.60% 3.60%
United Kingdom 5.10% 5.60% 4.90%
Germany 3.40% 4.60% 3.60%
14. 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 Energy of 100% of Next Energy in April 2024. Next
Energy is an energy efficiency and renewable energy services provider focused
on the UK domestic sector;
· The acquisition by DCC Energy of 100% of Secundo Photovoltaik ('Secundo')
in June 2024. Secundo is one of Austria's largest solar PV businesses serving
commercial customers;
· The acquisition by DCC Energy of 100% of Wirsol Roof Solutions ('Wirsol')
in July 2024. Wirsol is a German based provider of solar PV and battery
storage solutions;
· The acquisition by DCC Energy of 100% of Cubo in July 2024. Cubo is a fleet
telematics business which provides integrated telematics and communication
storage solutions in the UK and Ireland; and
· The acquisition by DCC Energy of 100% of Acteam ENR ('Acteam') in September
2024. Acteam is a French solar PV business providing project development,
engineering, project management along with construction support and
supervision services for commercial solar PV projects.
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 2024.
6 months 6 months
ended ended
30 Sept. 30 Sept.
2024 2023
£'000 £'000
Assets
Non-current assets
Property, plant and equipment 6,293 3,192
Right-of-use leased assets 2,803 2,725
Total non-current assets 9,096 5,917
Current assets
Inventories 31,311 6,374
Trade and other receivables 46,996 16,071
Total current assets 78,307 22,445
Liabilities
Non-current liabilities
Deferred income tax liabilities (40) (158)
Provisions for liabilities and charges (553) (389)
Lease creditors (2,472) (2,104)
Total non-current liabilities (3,065) (2,651)
Current liabilities
Trade and other payables (31,990) (14,885)
Current income tax liability (2,785) (1,447)
Lease creditors (331) (621)
Total current liabilities (35,106) (16,953)
Identifiable net assets acquired 49,232 8,758
Intangible assets and goodwill 192,219 166,763
Total consideration 241,451 175,521
Satisfied by:
Cash 150,255 126,635
Cash and cash equivalents acquired (1,902) (5,337)
Net cash outflow 148,353 121,298
Acquisition related liabilities 93,098 54,223
Total consideration 241,451 175,521
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 2025 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 £11.097 million (six months ended 30
September 2023: £3.790 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 £47.106 million. The fair value
of these receivables is £46.996 million (all of which is expected to be
recoverable).
Approximately £0.409 million of the goodwill acquired in 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
£227.9 million.
The acquisitions during the period contributed £93.0 million to revenues and
£3.8 million to profit after tax. Had all the business combinations completed
during the period occurred at the beginning of the period, total Group revenue
for the six months ended 30 September 2024 would have been £9.3 billion
million and total Group profit after tax would have been £98.4 million.
15. Seasonality of Operations
The Group's operations are significantly second-half weighted primarily due to
a portion of the demand for DCC Energy's products being weather dependent and
seasonal buying patterns in DCC Technology.
16. 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 2024 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 2024.
17. Events after the Balance Sheet Date
As announced today, the Group is beginning preparations with respect to a sale
of DCC Healthcare. Given that the process is at a very early stage and active
marketing has not yet begun, the 'highly probable' threshold under IFRS 5 has
not been reached. Therefore, DCC Healthcare is not classified as an asset held
for sale at 30 September 2024.
18. Board Approval
This report was approved by the Board of Directors of DCC plc on 11 November
2024.
19. 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 director's responsibilities
We confirm that to the best of our knowledge:
· the condensed set of interim financial statements for the six months ended
30 September 2024 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, Chair
Donal Murphy, Chief Executive
11 November 2024
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 to assess the underlying performance of our operations. In addition,
neither metric forms part of Director or management remuneration targets.
Calculation 6 months 6 months Year ended
ended ended 31 March
2024
30 Sept. 30 Sept.
£'000
2024 2023
£'000 £'000
Operating profit 184,419 181,929 529,396
Net operating exceptional items 22,725 12,201 39,309
Amortisation of intangible assets 52,178 53,512 114,075
Adjusted operating profit ('EBITA') 259,322 247,642 682,780
Net interest before exceptional items
Definition
The Group defines net interest before exceptional items as the net total of
finance costs and finance income before interest related exceptional items as
presented in the Group Income Statement.
Calculation 6 months 6 months Year ended
ended ended 31 March
2024
30 Sept. 30 Sept.
£'000
2024 2023
£'000 £'000
Finance costs before exceptional items (61,817) (60,270) (121,888)
Finance income before exceptional items 8,512 7,923 16,512
Net interest before exceptional items (53,305) (52,347) (105,376)
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 adjusted operating profit less net interest before
exceptional items.
Calculation 6 months 6 months Year ended
ended ended 31 March
2024
30 Sept. 30 Sept.
£'000
2024 2023
£'000 £'000
Adjusted operating profit 259,322 247,642 682,780
Net interest before exceptional items (53,305) (52,347) (105,376)
Earnings before taxation 206,017 195,295 577,404
Income tax expense 83,213
26,831 28,340
Income tax attaching to net exceptionals 3,923 (15) 6,418
Deferred tax attaching to amortisation of intangible assets 11,067 11,320 24,118
Total income tax expense before exceptionals and deferred tax attaching to 113,749
amortisation of intangible assets
41,821 39,645
Effective tax rate (%) 20.3% 20.3% 19.7%
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.
Revenue (constant currency) 6 months 6 months
ended ended
30 Sept. 30 Sept.
2024 2023
£'000 £'000
Revenue 9,325,248 9,615,978
Currency impact 118,922 -
Revenue (constant currency) 9,444,170 9,615,978
Adjusted operating profit (constant currency)
Adjusted operating profit 259,322 247,642
Currency impact 3,302 -
Adjusted operating profit (constant currency) 262,624 247,642
Adjusted earnings per share (constant currency)
Adjusted profit after taxation and non-controlling interests (note 8) 156,722 147,425
Currency impact 1,884 -
Adjusted profit after taxation and non-controlling interests (constant 158,606 147,425
currency)
Weighted average number of ordinary shares in issue ('000) 98,869 98,762
Adjusted earnings per share (constant currency) 160.42p 149.27p
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.
Calculation 6 months 6 months Year ended
ended ended 31 March
2024
30 Sept. 30 Sept.
£'000
2024 2023
£'000 £'000
Purchase of property, plant and equipment 95,878 117,434 230,354
Government grants received in relation to property, plant and equipment (32) (2,672) (2,669)
Proceeds from disposal of property, plant and equipment (9,725) (3,404) (6,666)
Net capital expenditure 86,121 111,358 221,019
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.
Calculation 6 months 6 months Year ended
ended ended 31 March
2024
30 Sept. 30 Sept.
£'000
2024 2023
£'000 £'000
Cash generated from operations before exceptionals 119,390 210,308 995,793
Repayment of lease creditors (principal and interest) (49,074) (44,490) (93,673)
Net capital expenditure (86,121) (111,358) (221,019)
Free cash flow (15,805) 54,460 681,101
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. As noted in the definition of free cash
flow, interest amounts relating to the repayment of lease creditors has been
deducted in arriving at the Group's free cash flow and are therefore excluded
from the interest paid figure in arriving at the Group's free cash flow (after
interest and tax payments).
Calculation 6 months 6 months Year ended
ended ended 31 March
2024
30 Sept. 30 Sept.
£'000
2024 2023
£'000 £'000
Free cash flow (15,805) 54,460 681,101
Interest paid (including interest relating to lease creditors) (54,904) (57,548) (118,780)
Interest relating to lease creditors 6,329 5,347 11,486
Income tax paid (52,900) (45,586) (124,057)
Dividends received from equity accounted investments 92 1,234 1,261
Interest received 8,628 8,003 15,285
Free cash flow (after interest and tax payments) (108,560) (34,090) 466,296
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.
Calculation 6 months 6 months Year ended
ended ended 31 March
2024
30 Sept. 30 Sept.
£'000
2024 2023
£'000 £'000
Net cash outflow on acquisitions during the period 148,353 121,298 288,155
Net cash outflow on acquisitions which were committed to in the (16,651)
previous period (75,192) (17,246)
Acquisition related liabilities arising on acquisitions during the period 93,098 54,223 82,809
Acquisition related liabilities which were committed to in the (8,549)
previous period (62,033) (7,735)
Amounts committed in the current period 25,049 160,000 143,803
Committed acquisition expenditure 129,275 310,540 489,567
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).
Calculation As at As at As at
30 Sept. 30 Sept. 31 March
2024
2023
2024
£'000 £'000 £'000
Inventories 1,237,923 1,335,355 1,072,061
Trade and other receivables 1,854,135 2,015,679 2,172,422
Less: interest receivable (1,239) (469) (1,391)
Trade and other payables (2,619,353) (2,944,129) (3,054,108)
Less: interest payable 23,321 24,189 21,369
Less: amounts due in respect of property, plant and equipment 13,494 9,514 17,574
Less: government grants 26 20 36
Net working capital 508,307 440,159 227,963
Working capital (days)
Definition
Working capital days measures how long it takes in days for the Group to
convert working capital into revenue.
Calculation As at As at As at
30 Sept. 30 Sept. 31 March
2024
2023
2024
£'000 £'000 £'000
Net working capital 508,307 440,159 227,963
March revenue 1,599,790 1,786,999 1,767,388
Working capital (days) 9.5 days 7.4 days 4.0 days
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