REG - DCC PLC - Results for the year ended 31 March 2016 <Origin Href="QuoteRef">DCC.L</Origin> - Part 2
17/05/2016 07:06
- Part 2: For the preceding part double click ID:nRSQ4009Ya
Share capital 15,455 14,688
Share premium 277,211 83,032
Share based payment reserve 8 14,954 12,756
Cash flow hedge reserve 8 (8,112) (10,462)
Foreign currency translation reserve 8 70,887 32,683
Other reserves 8 932 932
Retained earnings 948,316 849,119
Equity attributable to owners of the Parent 1,319,643 982,748
Non-controlling interests 30,833 4,245
Total equity 1,350,476 986,993
LIABILITIES
Non-current liabilities
Borrowings 1,260,421 1,314,386
Derivative financial instruments 343 92
Deferred income tax liabilities 133,646 30,533
Post employment benefit obligations 10 347 10,230
Provisions for liabilities 213,115 29,016
Acquisition related liabilities 81,411 40,149
Government grants 904 1,272
1,690,187 1,425,678
Current liabilities
Trade and other payables 1,437,832 1,312,136
Current income tax liabilities 45,172 16,095
Borrowings 192,804 149,472
Derivative financial instruments 8,401 7,902
Provisions for liabilities 31,373 8,096
Acquisition related liabilities 41,231 3,235
1,756,813 1,496,936
Liabilities associated with assets classified as held for sale - 8,216
1,756,813 1,505,152
Total liabilities 3,447,000 2,930,830
Total equity and liabilities 4,797,476 3,917,823
Net (debt)/cash included above (including cash attributable to assets held for sale) 9 (54,502) 29,987
Group Statement of Changes in Equity
For the year ended 31 March 2016 Attributable to owners of the Parent
Other Non-
Share Share Retained reserves controlling Total
capital premium earnings (note 8) Total interests equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 April 2015 14,688 83,032 849,119 35,909 982,748 4,245 986,993
Profit for the financial year - - 178,031 - 178,031 3,012 181,043
Currency translation - - - 35,706 35,706 2,265 37,971
Group defined benefit pension obligations:
- remeasurements - - 4,894 - 4,894 - 4,894
- movement in deferred tax asset - - (570) - (570) - (570)
Movements relating to cash flow hedges - - - 2,230 2,230 - 2,230
Movement in deferred tax liability on cash flow hedges - - - 120 120 - 120
Total comprehensive income - - 182,355 38,056 220,411 5,277 225,688
Issue of share capital 767 194,179 - - 194,946 - 194,946
Re-issue of treasury shares - - 2,781 - 2,781 - 2,781
Share based payment - - - 2,198 2,198 - 2,198
Dividends - - (80,938) - (80,938) - (80,938)
Non-controlling interest arising on acquisition - - (5,001) 2,498 (2,503) 21,311 18,808
At 31 March 2016 15,455 277,211 948,316 78,661 1,319,643 30,833 1,350,476
For the year ended 31 March 2015 Attributable to owners of the Parent
Other Non-
Share Share Retained reserves controlling Total
capital premium earnings (note 8) Total interests equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 April 2014 14,688 83,032 786,158 57,540 941,418 4,837 946,255
Profit for the financial year - - 144,427 - 144,427 (3) 144,424
Currency translation:
- arising in the year - - - (14,418) (14,418) (589) (15,007)
- recycled to the Income Statement on disposal - - - (2,721) (2,721) - (2,721)
Group defined benefit pension obligations:
- remeasurements - - (19,302) - (19,302) - (19,302)
- movement in deferred tax asset - - 2,187 - 2,187 - 2,187
Movements relating to cash flow hedges - - - (6,942) (6,942) - (6,942)
Movement in deferred tax liability on cash flow hedges - - - 324 324 - 324
Total comprehensive income - - 127,312 (23,757) 103,555 (592) 102,963
Re-issue of treasury shares - - 1,699 - 1,699 - 1,699
Share based payment - - - 2,126 2,126 - 2,126
Dividends - - (66,050) - (66,050) - (66,050)
At 31 March 2015 14,688 83,032 849,119 35,909 982,748 4,245 986,993
Group Cash Flow Statement
For the year ended 31 March 2016
2016 2015
Note £'000 £'000
Cash flows from operating activities
Profit for the financial year 181,043 144,424
Add back non-operating expenses/(income)
- tax 35,314 18,881
- share of equity accounted investments' profit (504) (489)
- net operating exceptionals 14,640 8,725
- net finance costs 38,408 31,313
Group operating profit before exceptionals 268,901 202,854
Share-based payments expense 2,198 2,126
Depreciation 74,822 59,710
Amortisation of intangible assets 31,622 25,345
Loss/(profit) on disposal of property, plant and equipment 415 (3,256)
Amortisation of government grants (419) (358)
Other (primarily pension payments) (3,412) (11,159)
Decrease in working capital 37,585 102,556
Cash generated from operations before exceptionals 411,712 377,818
Exceptionals (19,567) (16,454)
Cash generated from operations 392,145 361,364
Interest paid (64,432) (59,678)
Income tax paid (35,346) (32,361)
Net cash flows from operating activities 292,367 269,325
Investing activities
Inflows:
Proceeds from disposal of property, plant and equipment 13,523 16,054
Government grants received - 52
Dividends received from equity accounted investments 365 828
Disposal of subsidiaries and equity accounted investments 4,173 55,090
Interest received 36,004 31,222
54,065 103,246
Outflows:
Purchase of property, plant and equipment (134,172) (79,401)
Acquisition of subsidiaries 11 (390,042) (107,223)
Payment of accrued acquisition related liabilities (3,913) (16,326)
(528,127) (202,950)
Net cash flows from investing activities (474,062) (99,704)
Financing activities
Inflows:
Proceeds from issue of shares 197,727 1,699
Increase in interest-bearing loans and borrowings - 448,989
Net cash inflow on derivative financial instruments 1,953 -
Increase in finance lease liabilities 59 -
199,739 450,688
Outflows:
Repayment of interest-bearing loans and borrowings (14,832) (169,631)
Repayment of finance lease liabilities (151) (486)
Net cash outflow on derivative financial instruments - (9,832)
Dividends paid to owners of the Parent 7 (80,938) (66,050)
(95,921) (245,999)
Net cash flows from financing activities 103,818 204,689
Change in cash and cash equivalents (77,877) 374,310
Translation adjustment 38,249 (58,206)
Cash and cash equivalents at beginning of year 1,129,665 813,561
Cash and cash equivalents at end of year 1,090,037 1,129,665
Cash and cash equivalents consists of:
Cash and short term bank deposits 1,182,034 1,260,942
Overdrafts (91,997) (133,629)
Cash and short term deposits attributable to assets held for sale - 2,352
1,090,037 1,129,665
Notes to the Condensed Financial Statements
For the year ended 31 March 2016
1. Basis of Preparation
The financial information, from the Group Income Statement to note 16, contained in this preliminary results statement has
been derived from the Group financial statements for the year ended 31 March 2016 and is presented in sterling, rounded to
the nearest thousand. The financial information does not include all the information and disclosures required in the
annual financial statements. The Annual Report will be distributed to shareholders and made available on the Company's
website www.dcc.ie. It will also be filed with the Companies Registration Office. The auditors have reported on the
financial statements for the year ended 31 March 2016 and their report was unqualified. The financial information for the
year ended 31 March 2015 represents an abbreviated version of the Group's statutory financial statements on which an
unqualified audit report was issued and which have been filed with the Companies Registration Office.
The financial information presented in this report has been prepared in accordance with the Listing Rules of the Financial
Services Authority and the accounting policies that the Group has adopted for 2016 which are consistent with those applied
in the prior year.
2. Accounting Policies
There were no changes to IFRS which became effective for the Group during the financial year which resulted in material
changes to the Group's consolidated financial statements.
3. 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 year, 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
2016 2015 2016 2015
Stg£1= Stg£1= Stg£1= Stg£1=
Euro 1.3697 1.2674 1.2633 1.3749
Swedish Krona 12.7937 11.6866 11.6547 12.7734
Danish Krone 10.2297 9.4577 9.4134 10.2705
Norwegian Krone 12.4995 10.7266 11.8938 11.9669
4. Segmental Reporting
DCC is a sales, marketing, distribution and business 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. Tommy Breen, Chief Executive and his executive management
team. The Group is organised into four operating segments: DCC Energy, DCC Healthcare, DCC Technology and DCC
Environmental.
DCC Energy markets and sells oil products and services for transport, commercial/industrial, marine, aviation and home
heating use in Europe. DCC Energy markets and sells liquefied petroleum gas for similar uses in Europe. DCC Energy also
owns, operates and supplies unmanned and manned retail service stations in Europe.
DCC Healthcare sells, markets and distributes pharmaceuticals and medical products in the British and Irish markets. DCC
Healthcare also provides outsourced product development, manufacturing, packaging and other services to health and beauty
brand owners in Europe.
DCC Technology sells, markets and distributes a broad range of consumer and business technology products and services in
Europe.
DCC Environmental provides a broad range of waste management and recycling services to the industrial, commercial,
construction and public sectors in Britain and Ireland.
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 below. Intersegment revenue is not material and thus not subject to separate
disclosure.
An analysis of the Group's performance, based on continuing operations, by operating segment and geographic location is as follows:
(a) By operating segment
Year ended 31 March 2016
DCC Energy DCC Healthcare DCC Technology DCC Environmental Total
£'000 £'000 £'000 £'000 £'000
Segment revenue 7,515,308 490,617 2,441,705 153,455 10,601,085
Operating profit* 205,181 45,039 35,125 15,178 300,523
Amortisation of intangible assets (21,381) (7,138) (2,627) (476) (31,622)
Net operating exceptionals (note 5) (9,057) 5,859 (10,454) (988) (14,640)
Operating profit 174,743 43,760 22,044 13,714 254,261
Year ended 31 March 2015
DCC Energy DCC Healthcare DCC Technology DCC Environmental Total
£'000 £'000 £'000 £'000 £'000
Segment revenue 7,624,082 488,114 2,350,284 143,600 10,606,080
Operating profit* 119,392 39,689 49,341 13,294 221,716
Amortisation of intangible assets (14,334) (6,143) (2,794) (786) (24,057)
Net operating exceptionals (note 5) (7,137) (1,161) (11,101) (405) (19,804)
Operating profit 97,921 32,385 35,446 12,103 177,855
(b) By geography
The Group has a presence in 15 countries worldwide. The following represents a geographical analysis of the segment
information presented above in accordance with IFRS 8, which requires disclosure of information about the country of
domicile (Republic of Ireland) and countries with material revenue and non-current assets.
Revenue Non-current assets**
2016 2015 2016 2015
£'000 £'000 £'000 £'000
Republic of Ireland 659,723 717,077 132,892 120,238
United Kingdom 6,985,521 8,023,403 1,010,908 951,649
France 1,487,875 210,275 733,287 6,866
Other 1,467,966 1,655,325 181,620 150,078
10,601,085 10,606,080 2,058,707 1,228,831
Revenue and operating profit are derived almost entirely from the sale of goods and are disclosed based on the location of
the entity selling the goods. There are no material dependencies or concentrations on individual customers which would
warrant disclosure under IFRS 8. The Balance Sheet information presented above is disclosed based on the location of the
assets.
* Operating profit before amortisation of intangible assets and net operating exceptionals
** Non-current assets comprise intangible assets, property, plant and equipment and equity accounted investments
5. Exceptionals
2016 2015
£'000 £'000
Restructuring costs (16,517) (15,027)
Impairment of goodwill - (5,637)
Acquisition and related costs (7,478) (3,396)
Impairment of property, plant and equipment (947) (1,508)
Adjustments to contingent acquisition consideration 6,290 415
Gain arising from legal case settlements 4,291 894
Restructuring of Group defined benefit pension schemes - 6,381
Legal and other operating exceptional items (279) (1,926)
Net operating exceptional items (14,640) (19,804)
Mark to market of swaps and related debt (9,419) (2,191)
Net exceptional items before taxation (continuing operations) (24,059) (21,995)
Net exceptional items relating to discontinued operations - 11,079
Net exceptional items before taxation (24,059) (10,916)
Tax attributable to net exceptional items 710 -
Net exceptional items after taxation (23,349) (10,916)
Non-controlling interest share of net exceptional items after taxation (323) -
Net exceptional items attributable to owners of the Parent (23,672) (10,916)
The analysis of the net operating exceptional items is as follows:
2016 2015
£'000 £'000
Exceptional operating income 13,829 7,914
Exceptional operating expense (28,469) (27,718)
(14,640) (19,804)
The Group has focused on the efficiency of its operational infrastructures and sales platforms, particularly in areas where
it has been acquisitive in recent years. The Group incurred an exceptional charge of £16.517 million in relation to the
related restructuring of existing and acquired businesses.
Most of the Group's debt has been raised in the US Private Placement market and swapped, using long term interest, currency
and cross currency interest rate derivatives, to both fixed and floating rate sterling and euro. The level of
ineffectiveness calculated under IAS 39 on the fair value and cash flow hedge relationships relating to fixed rate debt,
together with gains or losses arising from marking to market swaps not designated as hedges, offset by foreign exchange
translation gains or losses on the related fixed rate debt, is charged or credited as an exceptional item. In the year
ended 31 March 2016, this amounted to an exceptional non-cash charge of £9.419 million. Cumulatively, the net exceptional
charges taken in respect of the Group's outstanding US Private Placement debt and related hedging instruments is £15.0
million. These cumulative charges, or any subsequent similar non-cash charges will, through future net credits, reverse and
net to zero over the remaining term of this debt and related hedging instruments.
Acquisition costs, which include the professional and tax costs (such as stamp duty) relating to the evaluation and
completion of acquisition opportunities, amounted to £7.478 million and reflect the significant level of acquisition
activity undertaken by the Group.
The balance of the exceptional items relates to a gain arising from the write back of contingent acquisition consideration
due to movements in the fair value of the underlying amounts payable (£6.290 million) and a net gain on legal claims
(£4.291 million), primarily due to a final cash recovery in respect of the Pihsiang legal claim.
There was a net tax credit of £0.710 million and a non-controlling interest charge of £0.323 million in relation to the
above net exceptional charges.
6. Earnings per Ordinary Share
Continuing Discontinued
operations operations Total
2016 2015 2015 2015
£'000 £'000 £'000 £'000
Profit attributable to owners of the Parent 178,031 128,664 15,763 144,427
Amortisation of intangible assets after tax 24,201 19,171 1,166 20,337
Exceptionals after tax (note 5) 23,672 21,995 (11,079) 10,916
Adjusted profit after taxation and non-controlling interests 225,904 169,830 5,850 175,680
Basic earnings per ordinary share Continuing Discontinued
Total operations operations Total
2016 2015 2015 2015
pence pence pence pence
Basic earnings per ordinary share 202.64p 153.20p 18.77p 171.97p
Amortisation of intangible assets after tax 27.55p 22.83p 1.39p 24.22p
Exceptionals after tax 26.95p 26.19p (13.19p) 13.00p
Adjusted basic earnings per ordinary share 257.14p 202.22p 6.97p 209.19p
Weighted average number of ordinary shares in issue (thousands) 87,854 83,983
Basic earnings per share is calculated by dividing the profit attributable to owners of the Parent by the weighted average
number of ordinary shares in issue during the year, 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.
Diluted earnings per ordinary share Continuing Discontinued
Total operations operations Total
2016 2015 2015 2015
pence pence pence pence
Diluted earnings per ordinary share 201.02p 152.10p 18.63p 170.73p
Amortisation of intangible assets after tax 27.32p 22.66p 1.38p 24.04p
Exceptionals after tax 26.73p 26.00p (13.10p) 12.90p
Adjusted diluted earnings per ordinary share 255.07p 200.76p 6.91p 207.67p
Weighted average number of ordinary shares in issue (thousands) 88,564 84,594
Diluted earnings per 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.
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 are intended to demonstrate the results of the Group after
eliminating the impact of amortisation of intangible assets and net exceptionals.
The weighted average number of ordinary shares used in calculating the diluted earnings per share for the year ended 31
March 2016 was 88.564 million (2015: 84.594 million). A reconciliation of the weighted average number of ordinary shares
used for the purposes of calculating the diluted earnings per share amounts is as follows:
2016 2015
'000 '000
Weighted average number of ordinary shares in issue 87,854 83,983
Dilutive effect of options and awards 710 611
Weighted average number of ordinary shares for diluted earnings per share 88,564 84,594
7. Dividends
2016 2015
£'000 £'000
Final - paid 55.81 pence per share on 23 July 2015(2015: paid 50.73 pence per share on 24 July 2014) 50,646 41,927
Interim - paid 33.04 pence per share on 7 December 2015 (2015: paid 28.73 pence per share on 28 November 2014) 30,292 24,123
80,938 66,050
The Directors are proposing a final dividend in respect of the year ended 31 March 2016 of 64.18 pence per ordinary share
(£56.816 million). This proposed dividend is subject to approval by the shareholders at the Annual General Meeting.
8. Other Reserves
For the year ended 31 March 2016
Foreign
Share based Cash flow currency
payment hedge translation Other
reserve reserve reserve reserves Total
£'000 £'000 £'000 £'000 £'000
At 1 April 2015 12,756 (10,462) 32,683 932 35,909
Currency translation - - 35,706 - 35,706
Movements relating to cash flow hedges - 2,230 - - 2,230
Movement in deferred tax liability on cash flow hedges - 120 - - 120
Transfer to non-controlling interests - - 2,498 - 2,498
Share based payment 2,198 - - - 2,198
At 31 March 2016 14,954 (8,112) 70,887 932 78,661
For the year ended 31 March 2015
Foreign
Share based Cash flow currency
payment hedge translation Other
reserve reserve reserve reserves Total
£'000 £'000 £'000 £'000 £'000
At 1 April 2014 10,630 (3,844) 49,822 932 57,540
Currency translation:
- arising in the year - - (14,418) - (14,418)
- recycled to the Income Statement on disposal of subsidiary - - (2,721) - (2,721)
Movements relating to cash flow hedges - (6,942) - - (6,942)
Movement in deferred tax liability on cash flow hedges - 324 - - 324
Share based payment 2,126 - - - 2,126
At 31 March 2015 12,756 (10,462) 32,683 932 35,909
9. Analysis of Net (Debt)/Cash
2016 2015
£'000 £'000
Non-current assets:
Derivative financial instruments 209,518 233,150
Current assets:
Derivative financial instruments 15,915 5,395
Cash and cash equivalents 1,182,034 1,260,942
1,197,949 1,266,337
Non-current liabilities:
Finance leases (127) (213)
Derivative financial instruments (343) (92)
Unsecured Notes (1,260,294) (1,314,173)
(1,260,764) (1,314,478)
Current liabilities:
Bank borrowings (91,997) (133,629)
Finance leases (379) (357)
Derivative financial instruments (8,401) (7,902)
Unsecured Notes (100,428) (15,486)
(201,205) (157,374)
Net (debt)/cash excluding cash attributable to assets held for sale (54,502) 27,635
Cash and short term deposits attributable to assets held for sale - 2,352
Net (debt)/cash including cash attributable to assets held for sale (54,502) 29,987
10. Post Employment Benefit Obligations
The Group's defined benefit pension schemes' assets were measured at fair value at 31 March 2016. The defined benefit
pension schemes' liabilities at 31 March 2016 were updated to reflect material movements in underlying assumptions.
The net deficit on the Group's post employment benefit obligations decreased from £10.230 million at 31 March 2015 to
£0.347 million at 31 March 2016. The decrease in the deficit was primarily driven by an actuarial gain on liabilities which
arose from an increase in the discount rate used to value these liabilities together with contributions in excess of the
current service cost.
11. 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 year, together with percentages acquired were as
follows:
· the acquisition in May 2015 of 100% of Computers Unlimited, a consumer technology distributor operating primarily in
the UK but also with operations in France and Spain;
· the acquisition of 100% of the assets that comprise Esso's unmanned and motorway retail petrol station network in
France ('Esso Retail France'), completed in June 2015;
· the combination of the Group's Danish oil distribution business with the fuel distribution activities of DLG, a
leading Danish agricultural business. The transaction, which completed in July 2015, resulted in DCC Energy owning 60% of
the enlarged business;
· the acquisition in September 2015 of 100% of Design Plus (Holdings) Ltd, a market leader in sachet filling in
Britain;
· the acquisition in October 2015 of 100% of CUC Groupe, a cabling and connectors distribution business headquartered
near Paris with operations in France and Germany; and
· the consideration for the acquisition of 100% of Butagaz S.A.S. ('Butagaz'), a leading liquefied petroleum gas
business in France, was paid on 2 November 2015.
The carrying amounts of the assets and liabilities acquired (excluding net cash/debt acquired), determined in accordance
with IFRS before completion of the business combinations, together with the fair value adjustments made to those carrying
values were as follows:
Esso Retail
Butagaz France Others Total
2016 2016 2016 2016
£'000 £'000 £'000 £'000
Assets
Non-current assets
Property, plant and equipment 119,801 78,583 6,221 204,605
Intangible assets - other intangible assets 264,881 16,561 16,572 298,014
Equity accounted investments 15,292 - - 15,292
Deferred income tax assets 11,383 - 222 11,605
Total non-current assets 411,357 95,144 23,015 529,516
Current assets
Inventories 10,034 19,932 22,373 52,339
Trade and other receivables 69,919 1,211 26,774 97,904
Total current assets 79,953 21,143 49,147 150,243
Liabilities
Non-current liabilities
Deferred income tax liabilities (90,947) (5,702) (4,525) (101,174)
Provisions for liabilities (150,865) (18,611) (418) (169,894)
Government grants - - (46) (46)
Total non-current liabilities (241,812) (24,313) (4,989) (271,114)
Current liabilities
Trade and other payables (50,697) (17,254) (27,472) (95,423)
Provisions for liabilities (18,604) - - (18,604)
Current income tax liability (18,318) - (401) (18,719)
Total current liabilities (87,619) (17,254) (27,873) (132,746)
Identifiable net assets acquired
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