Support services group DCC post strong profit growth for first half of 2019
International marketing and support services group DCC have reported a 15 per cent growth in profit for the first half of 2019, with strong performances across its four divisions.
The FTSE 100 company said the rise to £162.6m from £141.9m in 2018 was in line with expectations.
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Chief Executive Donal Murphy said: “I am pleased to report that the first half of the year has been another period of good growth and development for DCC.
“The business has performed strongly, with Group operating profit well ahead of the prior year and all divisions delivering good profit growth, despite the more difficult economic and market backdrop, particularly in the UK.”
The group also announced the acquisition of Florida-based Ion Laboratories, a nutritional products manufacturer, for about $60m.
The blue-chip has been eyeing up the lucrative US health supplements market and the move represents a significant development on the group’s strategy.
Speaking to City PM, Murphy said that DCC were keen to continue growing the nutritional supplements business in the US:
“It’s a $46bn market which is currently very fragmented. We currently export half of our UK production to the US, and have been working in the sector since 1999.”
The boost in profit was driven by a particularly strong performance by DCC’s petroleum business, which saw 19.8 per cent growth.
In the latter, the acquisition of US firm Pacific Coast Energy marked the company’s first bolt-on in the US liquefied petroleum industry.
Murphy also said that the fluctuation in oil markets had created an opportunity for DCC:
“Some of our key growth has come through large corporate customers who want to reduce their carbon footprint. As LPG is the cleanest of fossil fuels, it creates a great opportunity for us.”
The only area of concern was over UK technology sales. When asked about a slowdown in volumes in the division, Murphy said that demand for technology products, whether consumer or enterprise, had fallen across the sector, but DCC’s international growth had offset any UK setbacks.
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Murphy said: “The group’s significant development in recent years has resulted in DCC having the platforms, opportunities and capability to build the group into a global leader in its chosen sectors.”
He told City PM: “No business is recession proof, but we might be as close as you get.”
DCC expect to deliver year-end results broadly in line with current market expectations.
Main image credit: Getty