TIDMDCC
RNS Number : 1081F
DCC PLC
10 November 2015
10 November 2015
Interim Report for the six months ended 30 September 2015
DCC, the international sales, marketing, distribution and
business support services group, today announced its results for
the six months ended 30 September 2015.
Highlights 2015 20141 % change
------------------------------ ---------- ---------- ---------
DCC Energy volumes (litres) 5.818b 5.215b 11.6%
------------------------------ ---------- ---------- ---------
Revenue (excl. DCC Energy) GBP1.407b GBP1.348b 4.3%
------------------------------ ---------- ---------- ---------
Operating profit2 GBP88.4m GBP70.1m 26.1%
------------------------------ ---------- ---------- ---------
Adjusted earnings per share2 70.3p 59.3p 18.5%
------------------------------ ---------- ---------- ---------
Interim dividend 33.04p 28.73p 15.0%
------------------------------ ---------- ---------- ---------
Operating cash flow GBP120.7m GBP17.9m
------------------------------ ---------- ---------- ---------
-- 26.1% growth in Group operating profit, driven in particular
by the performances of DCC Energy and DCC Healthcare.
-- Adjusted earnings per share on a continuing basis up 18.5% to 70.3 pence.
-- Interim dividend increased by 15% to 33.04 pence per share.
-- Strong cash flow performance with investment in net working capital reducing by 4.6 days.
-- Net cash position at 30 September 2015 of GBP153 million
(pro-forma net debt of GBP170 million adjusting for the
consideration for Butagaz).
-- Completion of acquisitions of Butagaz (ahead of schedule) and
Esso Retail France, with both trading well.
-- Further bolt-on acquisitions announced today in DCC Healthcare and DCC Technology.
-- Assuming normal winter weather conditions in the balance of
the financial year, the Group expects that both operating profit
and adjusted earnings per share for the year ending 31 March 2016
will be very significantly ahead of the prior year and modestly
ahead of current market consensus expectations.
1 Income Statement items have been restated to reflect the
disposal of DCC Food & Beverage
2 Excluding net exceptionals and amortisation of intangible
assets
Commenting on the results, Tommy Breen, Chief Executive,
said:
"I am pleased to report that operating profit of GBP88.4 million
was 26.1% ahead of the prior year in the seasonally less
significant first half. This very strong Group performance was
achieved through excellent performances from the Energy, Healthcare
and Environmental divisions, notwithstanding a more difficult
background for the Technology division.
Adjusted earnings per share increased by 18.5% to 70.3
pence.
The Board has decided to pay an interim dividend of 33.04 pence
per share, which represents a 15% increase on the prior year.
The Group continued to be very active from a development
perspective. DCC Energy successfully completed the acquisitions of
Butagaz and Esso Retail in France and both businesses are
performing well. The Healthcare and Technology divisions have also
been active, with the acquisition of Design Plus by the Health
& Beauty business and CUC by the Continental European
Technology business.
Assuming normal winter weather conditions in the balance of the
financial year, the Group expects that both operating profit and
adjusted earnings per share for the year ending 31 March 2016 will
be very significantly ahead of the prior year and modestly ahead of
current market consensus expectations.
The successful completion in May 2015 of the 5% share placing
has ensured that the Group retains significant financial capacity
for further development while preserving the balance sheet strength
that has served it well over many years. DCC remains ambitious to
continue the growth and development of its business."
Presentation of results and dial-in facility
There will be a presentation of these results to analysts and
investors/fund managers at 8.45 am today in the London Stock
Exchange. The slides for this presentation can be downloaded from
DCC's website, www.dcc.ie.
A dial-in facility will be available for this meeting:
Ireland: 1800 937 657
UK / International: +44 (0) 203 427 1909
Passcode: 6734192
This report and further information on DCC is available at
www.dcc.ie
For reference, please contact:
Tommy Breen, Chief Executive Tel: +353 1 2799 400
Fergal O'Dwyer, Chief Financial Officer Email: investorrelations@dcc.ie
Kevin Lucey, Head of Group Finance & Investor Web: www.dcc.ie
Relations
Group Results
A summary of the Group's results for the six months ended 30
September 2015 is as follows:
2015 2014(1)
GBP'm GBP'm % change
Revenue 5,066 5,425 -6.6%
Operating profit(2)
DCC Energy 52.9 31.9 +65.6%
DCC Technology 8.6 15.2 -43.6%
DCC Healthcare 18.4 15.9 +16.1%
DCC Environmental 8.5 7.1 +20.0%
Group operating profit(2) 88.4 70.1 +26.1%
Equity accounted investments' profit
after tax 0.2 0.1
Finance costs (net) (14.6) (13.3)
Profit before net exceptionals,
amortisation of intangible assets and
tax 74.0 56.9 +30.0%
Net exceptional charge (9.7) (2.0)
Amortisation of intangible assets (11.8) (12.3)
Profit before tax from continuing
operations 52.5 42.6 +23.1%
Profit before tax from discontinued
operations - 4.9
Taxation (10.3) (5.2)
Profit after tax 42.2 42.3
Non-controlling interests (0.9) -
Attributable profit 41.3 42.3
Adjusted earnings per share(2) 70.3 pence 59.3 pence +18.5%
Dividend per share 33.04 pence 28.73 pence +15.0%
Operating cash flow 120.7 17.9
Net cash / (debt) at 30 September 153.4 (272.8)
Pro-forma net debt at 30 September(3) (169.5) (272.8)
(1) Income Statement items have been restated to reflect the disposal of DCC Food & Beverage
(2) Excluding net exceptionals and amortisation of intangible assets
(3) Adjusting for the cash cost of the Butagaz acquisition which completed on 2 November 2015
----------------------------------------------------------------------------------------------------------------------
Group revenue
Volumes in DCC Energy increased by 11.6%, driven by the first
time contribution from the Esso Retail business in France. On an
organic basis, volumes were modestly ahead of the prior year with
continuing good organic growth in LPG volumes, partly as a result
of oil to LPG conversions. Due to the impact of lower oil prices,
DCC Energy's revenue declined by 10.2% (6.7% on a constant currency
basis) with average selling prices per litre reducing by 19.6%.
Revenue from continuing operations excluding DCC Energy was up
4.3% (7.2% on a constant currency basis), driven by
acquisitions.
Overall, Group revenue from continuing operations decreased by
6.6% (3.2% on a constant currency basis) to GBP5.1 billion,
reflecting the impact of lower oil prices.
Group operating profit
Group operating profit from continuing operations increased by
26.1% to GBP88.4 million in the seasonally less significant first
half. This growth was held back by the movement in the rate used
for translating the Group's non-sterling denominated profits into
sterling. The average euro/sterling translation rate for the six
months ended 30 September 2015 of 0.7193 was 11.1% weaker than the
average of 0.8090 in the comparative period. Operating profit
growth on a constant currency basis was 29.7% and approximately one
third of this growth was organic.
Operating profit in DCC Energy, the Group's largest division,
was 65.6% ahead of the prior year (73.2% ahead on a constant
currency basis). Approximately half of this growth was organic and
the balance was from first time contributions from Esso Retail
France, DLG and Butagaz, all of which traded at, or ahead of,
expectations.
(MORE TO FOLLOW) Dow Jones Newswires
November 10, 2015 02:00 ET (07:00 GMT)
Operating profit in DCC Technology was back 43.6% (GBP6.6
million) due to the weak performance of its UK business, despite
growth in the Irish, Continental European and Supply Chain
businesses. The UK business continued to be impacted by a reduction
in sales of products from one large supplier and also experienced
weaker than anticipated demand for tablet computing, smartphone and
gaming products.
Operating profit in DCC Healthcare was 16.1% ahead of the prior
year and benefitted from an improved sales mix and good cost
control in DCC Vital and also from a very strong performance in DCC
Health & Beauty Solutions.
DCC Environmental recorded excellent organic profit growth, with
operating profit increasing to GBP8.5 million, 20.0% ahead of the
prior year.
Finance costs (net)
Net finance costs increased to GBP14.6 million (2014: GBP13.3
million) as a result of the incremental interest cost of the
additional US Private Placement debt which was drawn down during
the first half of the prior year, with the Group's finance costs
being driven by the level of gross debt. Average net debt during
the period was GBP60 million compared to GBP339 million during the
six months ended 30 September 2014.
Profit before net exceptional items, amortisation of intangible
assets and tax
Profit before net exceptional items, amortisation of intangible
assets and tax increased by 30.0% (32.9% on a constant currency
basis) to GBP74.0 million.
Net exceptional charge and amortisation of intangible assets
The Group incurred a net exceptional charge before tax and
non-controlling interests of GBP9.7 million in the first six months
of the year. The net charge principally reflects acquisition and
restructuring costs and an IAS 39 charge, offset by a receipt in
respect of the Pihsiang legal claim where there was a final cash
recovery.
Acquisition related costs amounted to GBP4.6 million and
restructuring costs amounted to GBP6.5 million. Acquisition costs
include the professional fees and tax costs (such as stamp duty)
relating to the evaluation and completion of acquisition
opportunities.
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 six months ended 30 September 2015, this
amounted to an exceptional charge of GBP3.8 million. The
exceptional gains and losses on the Group's private placement debt
and related hedging instruments will net to zero on a cumulative
basis over their lives.
There was a final receipt of GBP5.2 million in relation to the
Pihsiang legal claim.
The charge for the amortisation of acquisition related
intangible assets decreased to GBP11.8 million from GBP12.3
million, principally reflecting a number of these intangible assets
becoming fully amortised during the period.
Profit before tax
Profit before tax from continuing operations increased by 23.1%
to GBP52.5 million.
Taxation
The effective tax rate for the Group in the first half is 16%
and is based on the anticipated mix of profits for the full year.
This compares to a full year tax rate in the prior year of 12.0%.
The increase is primarily due to an increasing proportion of
profits generated in Continental Europe.
Adjusted earnings per share
Adjusted earnings per share increased by 18.5% (21.2% on a
constant currency basis) to 70.3 pence and reflects the issue of
4.2 million new ordinary shares in the equity placing completed in
May 2015.
Dividend
The Board has decided to pay an interim dividend of 33.04 pence
per share, which represents a 15.0% increase on the prior year
interim dividend of 28.73 pence per share. This dividend will be
paid on 7 December 2015 to shareholders on the register at the
close of business on 20 November 2015.
Cash flow
As with its operating profit, the Group's operating cash flow is
significantly weighted towards the second half of the year. The
cash flow of the Group for the six months ended 30 September 2015
can be summarised as follows:
Six months ended 30 September 2015 2014
GBP'm GBP'm
Operating profit 88.4 73.2
Increase in working capital (4.4) (82.5)
Depreciation and other 36.7 27.2
Operating cash flow 120.7 17.9
Capital expenditure (net) (51.3) (36.3)
Free cash flow 69.4 (18.4)
Dividend from equity accounted investments - 0.7
Interest and tax paid (29.8) (26.2)
Free cash flow after interest and tax 39.6 (43.9)
Acquisitions (134.2) (105.5)
Disposals 2.3 -
Dividends (49.9) (43.0)
Exceptional items (net) (10.4) (3.6)
Share issues 194.0 1.7
Net inflow / (outflow) 41.4 (194.3)
Opening net cash / (debt) 30.0 (87.3)
Translation and other (7.8) 8.8
Cash acquired - Butagaz 89.8 -
Closing net cash / (debt) 153.4 (272.8)
Consideration for Butagaz (322.9)
Pro-forma net debt (169.5)
Operating cash flow in the six months ended 30 September 2015 of
GBP120.7 million compared to GBP17.9 million in the prior year.
Working capital increased by GBP4.4 million with overall working
capital days improving by 4.6 days to a negative 2.3 days sales.
Working capital improvements were achieved by each of the Group's
divisions with overall Group receivables days reducing from 29.3
days to 27.3 days.
Acquisitions and capital expenditure
A number of acquisitions, previously announced, were completed
in the period from 1 April 2015 up to the date of this report.
These included:
DCC Energy
Butagaz
As announced on 2 November 2015, DCC Energy completed the
acquisition of Butagaz, a leading LPG business in France, from
Shell. The acquisition of Butagaz represents the largest ever
acquisition by DCC and a major step forward in the continuing
expansion of its LPG business. The French LPG market is the second
largest in Western Europe and approximately twice the size of the
market in Britain. The acquisition of Butagaz has provided DCC
Energy with a substantial presence in the French LPG market, an
experienced management team and a high quality sales, marketing and
operating infrastructure. Following receipt of competition
clearance from the EU, the agreement to acquire Butagaz became
unconditional in all respects on 1 September 2015, well ahead of
the schedule anticipated at the time of announcing the acquisition.
The economic risks and benefits and related cash flows have accrued
to DCC and the Group has been in control since 1 September 2015;
accordingly Butagaz has been consolidated by the DCC Group since
that date.
The consideration for the acquisition of Butagaz (inclusive of
cash acquired) of EUR450 million (GBP323 million) was accrued at 30
September 2015 and substantially all of this amount was paid on 2
November 2015 following the separation of the Butagaz IT
infrastructure from Shell's global infrastructure. In addition,
certain debt-like items provided for within the business will fall
due over the medium term.
Esso Retail France
As previously announced on 24 June 2015, DCC completed the
acquisition of the assets that comprise the Esso Express unmanned
retail petrol station network and the Esso branded motorway
concessions in France from Esso Société Anonyme Française. The
business has annual volumes of approximately 1.9 billion litres and
the total consideration, inclusive of stock in tank at the date of
acquisition, was EUR130 million (GBP94 million).
DLG Denmark
In July 2015, following the receipt of competition clearance,
DCC Energy combined its Danish oil distribution business with the
fuel distribution activities of DLG, a leading Danish agricultural
business. The transaction resulted in DCC Energy owning 60% of the
enlarged business which distributes approximately 400 million
litres of fuel and is being managed by DCC Energy's management
team.
DCC Technology
Computers Unlimited
In May 2015, DCC Technology acquired Computers Unlimited for an
initial enterprise value of GBP24 million. Computers Unlimited is a
consumer technology distributor operating primarily in the UK but
also with operations in France and Spain. The business has annual
revenue of approximately GBP140 million and is focused on the
'connected home' and professional design market. The business
distributes a range of products that are complementary to those
distributed by DCC Technology, including design software, printers,
accessories and premium audio systems.
Acquisition and capital expenditure committed
(MORE TO FOLLOW) Dow Jones Newswires
November 10, 2015 02:00 ET (07:00 GMT)
Committed acquisition and capital expenditure in the current
period amounted to GBP91.7 million as follows:
Acquisitions Capex Total
GBP'm GBP'm GBP'm
DCC Energy 3.5 23.6 27.1
DCC Technology 16.4 16.3 32.7
DCC Healthcare 20.5 4.6 25.1
DCC Environmental - 6.8 6.8
Total 40.4 51.3 91.7
------------------- ------------------- --------- --------------
Acquisition activity
Committed acquisition expenditure amounted to GBP40.4
million.
DCC Technology
CUC
In October 2015, DCC Technology made a binding offer for the
acquisition of CUC Groupe ("CUC"), a cabling and connectors
distribution business headquartered near Paris. Employing 192
people and with annual revenue of approximately EUR60 million, CUC
sells a broad range of cabling products to over 9,000 customers
(resellers, systems integrators and electricians) from its
operations in France and Germany. The acquisition, which is
expected to complete in the final quarter of the financial year,
will add specialist expertise in cabling and connector products and
significantly broaden the customer base of the Continental European
business.
DCC Healthcare
Design Plus
In September 2015, DCC Health & Beauty Solutions
strengthened its market position in the contract manufacture of
creams and liquids through the acquisition of Design Plus
(Holdings) Ltd ("Design Plus") based in Lancashire, England. The
consideration, which was paid in cash at completion, was based on
an enterprise value of GBP15 million. Design Plus brings specialist
expertise in sachet filling - it is the leader in this market
segment in Britain - and strong relationships with a complementary
range of health and beauty brand owners and retailers in Britain,
Continental Europe and the USA.
Espiner
In October 2015, DCC Vital acquired Espiner Medical ("Espiner"),
a small medical devices company based near Bristol, England, for a
modest consideration. Espiner has developed a range of tissue
retrieval bags for use in a wide range of laparoscopic surgical
procedures. The acquisition will increase DCC Vital's own brand
revenues and also provides access to an established network of
distributors in Europe, the USA and Australasia.
Total cash spend on acquisitions in the six months ended 30
September 2015
The previously announced acquisitions of Esso Retail France, DLG
and Computers Unlimited, along with the acquisition of Design Plus
and other smaller acquisitions, were completed during the six month
period for a total consideration of GBP133 million. Inclusive of
the payment of deferred and contingent acquisition consideration
previously provided of GBP1 million, the total cash spend on
acquisitions in the six months ended 30 September 2015 was GBP134
million. Substantially all of the consideration for Butagaz
(inclusive of cash acquired) of GBP323 million accrued at 30
September 2015 was paid on 2 November 2015.
Capital expenditure
Net capital expenditure for the six months of GBP51.3 million
(2014: GBP36.3 million) compares to a depreciation charge of
GBP32.5 million (2014: GBP30.2 million).
As previously reported, DCC Technology is continuing to
integrate its UK businesses under the Exertis brand and as part of
this project is significantly upgrading its ERP and logistics
infrastructure. DCC Technology has commenced the construction of a
new, purpose built, 450,000 sq.ft. UK national distribution centre
in the north of England, close to the majority of its existing
facilities. The project is progressing well and the relocation to
the new facility will take place on a staged basis, beginning in
the second half of the year ending 31 March 2017.
Financial strength
An integral part of the Group's strategy is the maintenance of a
strong and liquid balance sheet to leave it well placed to take
advantage of opportunities as they arise. To that end, and
cognisant that the Group had already committed to acquire both the
Esso Retail and Butagaz businesses in France, the Group
successfully completed a placing of new ordinary shares
representing 5% of its issued share capital in May 2015. The shares
were placed at a premium to the previous day's closing price,
raising a net GBP193 million.
As a result of the placing and the continuing strong focus on
operating cash flow, DCC's financial position remains very strong.
At 30 September 2015, the Group had pro-forma net debt (allowing
for the cash cost for Butagaz) of GBP170 million and total equity
of GBP1.2 billion. At the same date, DCC had pro-forma cash
resources, net of overdrafts, of GBP951 million and a further
GBP140 million of undrawn committed debt facilities. The Group's
outstanding term debt at 30 September 2015 had an average maturity
of 6.6 years. Substantially all of the Group's debt has been raised
in the US Private Placement market with an average credit margin of
1.66% over floating Euribor/Libor.
Outlook
Assuming normal winter weather conditions in the balance of the
financial year, the Group expects that both operating profit and
adjusted earnings per share for the year ending 31 March 2016 will
be very significantly ahead of the prior year and modestly ahead of
current market consensus expectations.
Performance Review - Divisional Analysis
DCC Energy 2015 2014 % change
------------------ ---------- ---------- ---------
Volumes (litres) 5.818b 5.215b 11.6%
------------------ ---------- ---------- ---------
Revenue GBP3.660b GBP4.077b -10.2%
------------------ ---------- ---------- ---------
Operating profit GBP52.9m GBP31.9m 65.6%
------------------ ---------- ---------- ---------
DCC Energy had an excellent first half with operating profit
65.6% ahead of the prior year (73.2% ahead on a constant currency
basis). Approximately half of this growth was organic, benefitting
from a strong performance in LPG.
DCC Energy sold 5.8 billion litres of product, an increase of
11.6% over the prior year (+0.5% organic).
DCC Energy made significant progress in its strategy to expand
both its LPG and Retail & Fuel Card businesses through the
acquisitions of Butagaz and the Esso Retail business in France.
The LPG business performed particularly well. Strong organic
volume growth was achieved, driven by growth in sales to commercial
and industrial customers, and the business also benefitted from a
favourable product pricing environment. The acquisition of Butagaz
became unconditional in all respects on 1 September 2015 following
the receipt of competition clearance and has been consolidated in
DCC's results since that date. Butagaz significantly strengthens
DCC's LPG business and positions it as the strong number two player
in the French market.
The Oil Distribution business performed well in the first half.
In July, following receipt of competition clearance, DCC Energy
combined its Danish oil distribution business with the fuel
distribution business of DLG, a leading Danish agricultural group,
and the enlarged business contributed strongly in the first half.
DCC Energy now owns 60% of the enlarged group which distributes c.
400 million litres of oil in the Danish market.
DCC Energy made excellent progress in the development of its
Retail & Fuel Card business. On 24 June 2015, DCC completed the
acquisition of the Esso Retail petrol station business in France,
comprising 272 unmanned Esso Express sites and concessions to
operate 47 Esso branded motorway sites. The migration of the
business onto DCC's newly developed operating platform went
smoothly and the business has performed strongly since acquisition.
DCC continued to expand its retail petrol station business in
Sweden where it operates 324 sites. DCC's Fuel Card business
continued its track record of excellent organic volume and profit
growth and is now the largest reseller of fuel cards in
Britain.
DCC Energy has significantly expanded its business since the
start of the financial year and now operates across 10 countries in
Europe and remains well positioned to grow in these markets and to
continue to expand into new geographies.
DCC Technology 2015 2014 % change
------------------ ---------- ---------- ---------
Revenue GBP1.089b GBP1.038b 4.9%
------------------ ---------- ---------- ---------
Operating profit GBP8.6m GBP15.2m -43.6%
------------------ ---------- ---------- ---------
Operating margin 0.8% 1.5%
------------------ ---------- ---------- ---------
While revenue was in line with the prior year organically,
operating profit in DCC Technology was significantly impacted by a
weak performance in its UK business.
Revenue in the UK, DCC Technology's largest market, declined by
approximately 8% organically. While the gross profit percentage on
a like-for-like basis was only modestly behind the prior year, the
operating margin declined more significantly as costs within the
business are typically fixed in nature in the short term and
activity levels are significantly weighted to the second half.
The business in the UK continued to be impacted by a reduction
in sales of mobile computing and communications products of one
large supplier. As previously reported, these effects were first
felt at the beginning of the second half of the prior year and
consequently are expected to have less impact in the second half of
the current year. In addition, the business experienced weaker than
anticipated demand in its market for tablet computing, smartphone
and gaming products.
(MORE TO FOLLOW) Dow Jones Newswires
November 10, 2015 02:00 ET (07:00 GMT)
The UK business continued to progress the development of its new
national distribution centre, located in Lancashire, and the
upgrade of its IT infrastructure. These developments, which will
improve the efficiency of the business and support future growth,
are expected to be completed by 31 March 2017.
DCC Technology's business in Ireland recorded strong growth and
benefitted from improved demand across a number of product
segments, partly reflecting the ongoing recovery in the Irish
economy.
The business in Continental Europe achieved good growth,
reflecting the acquisition of CapTech in Sweden in the prior year
and strong organic growth in that business since acquisition. DCC
Technology is focused on broadening the product and service
offering of its business in Continental Europe in areas such as
mobile, smart home and supplies as well as developing its SME
reseller proposition where it is currently under-represented. To
this end, DCC Technology has made a binding offer to acquire CUC, a
cabling and connectors distribution business headquartered near
Paris with operations in France and Germany. The acquisition, which
is expected to complete in the final quarter of the financial year,
will add specialist expertise in cabling and connector products and
significantly broaden the customer base of the Continental European
business.
The Supply Chain Services business recorded good organic revenue
and profit growth as business development activity drove increased
volumes in lower margin finished goods programmes.
DCC Technology has strong positions in its key markets and a
clear focus on capital and operational efficiency and remains
confident that the development of its service and product portfolio
leaves the business well positioned for renewed growth.
DCC Healthcare 2015 2014 % change
------------------ ---------- ---------- ---------
Revenue GBP239.1m GBP236.9m 0.9%
------------------ ---------- ---------- ---------
Operating profit GBP18.4m GBP15.9m 16.1%
------------------ ---------- ---------- ---------
Operating margin 7.7% 6.7%
------------------ ---------- ---------- ---------
DCC Healthcare continued its track record of strong operating
profit growth in the first half with profits up 16.1%. The business
generated good organic profit growth, benefitting from an improved
sales mix and cost control in DCC Vital and organic sales growth in
DCC Health & Beauty Solutions. Approximately half of the
overall profit growth was from acquisitions completed in the
current and prior year.
DCC Vital, which is focused on the sales, marketing and
distribution of pharmaceuticals and medical devices in Britain and
Ireland, recorded good operating profit growth across each of its
business areas. In pharma, excellent organic growth was achieved in
hospital injectables, including a strong performance from the
Beacon Pharmaceuticals portfolio acquired in November 2014. In
medical devices, the focus on increasing the proportion of sales
generated by its own branded products and streamlining the agency
portfolio drove an increase in contribution. The bolt-on
acquisition in October 2015 of Espiner Medical, a specialist
consumables business, further strengthened DCC Vital's own brand
offering. Williams Medical, the leading provider of medical
supplies and services to GP surgeries in Britain, continued to
perform well and delivered growth across its portfolio of
equipment, consumables and related services.
DCC Health & Beauty Solutions, which provides outsourced
solutions to nutrition and beauty brand owners in Europe, generated
very strong organic operating profit growth. In nutrition, the
business benefitted from strong sales growth with a number of
European customers as well as further efficiencies from the
successful integration of its Swedish tablet manufacturing and
packing operations into its larger facility in Britain. The final
phase of this integration is on course to be completed in the
second half of the year. In beauty, the business benefitted from a
number of successful new product development projects on behalf of
international brand owners.
In September 2015, DCC Health & Beauty Solutions completed
the acquisition of Design Plus, the market leader in Britain in
sachet filling for health and beauty brand owners, which enhances
its service offering and provides access to a range of new
customers.
DCC Environmental 2015 2014 % change
------------------- --------- --------- ---------
Revenue GBP78.3m GBP73.6m 6.5%
------------------- --------- --------- ---------
Operating profit GBP8.5m GBP7.1m 20.0%
------------------- --------- --------- ---------
Operating margin 10.8% 9.6%
------------------- --------- --------- ---------
DCC Environmental performed very strongly during the first half
of the year, increasing its operating profit by 20.0% to GBP8.5
million.
This performance was driven by business development initiatives,
the improving economic environment in Ireland and continued growth
in the construction sector in Britain. Despite declines in
commodity prices, the business generated good operating leverage
due to cost control. The business in Scotland relocated its
Edinburgh operations to a new, larger facility which will enable
the further development of DCC Environmental in this region.
Forward-looking statements
This announcement contains some forward-looking statements that
represent DCC's expectations for its business, based on current
expectations about future events, which by their nature involve
risk and uncertainty. DCC believes that its expectations and
assumptions with respect to these forward-looking statements are
reasonable, however because they involve risk and uncertainty as to
future circumstances, which are in many cases beyond DCC's control,
actual results or performance may differ materially from those
expressed in or implied by such forward-looking statements.
Principal risks and uncertainties
The Board of DCC is responsible for the Group's risk management
and internal control systems, which are designed to identify,
manage and mitigate potential material risks to the achievement of
the Group's strategic and business objectives. The Board has
approved a Risk Management Policy which sets out delegated
responsibilities and procedures for the management of risk across
the Group.
The principal risks and uncertainties facing the Group in the
short to medium term, as set out on pages 12 to 15 of the 2015
Annual Report (together with the principal mitigation measures),
continue to be the principal risks and uncertainties facing the
Group for the remaining six months of the financial year.
This is not an exhaustive statement of all relevant risks and
uncertainties. Matters which are not currently known to the Board
or events which the Board considers to be of low likelihood could
emerge and give rise to material consequences. The mitigation
measures that are maintained in relation to these risks are
designed to provide a reasonable and not an absolute level of
protection against the impact of the events in question.
Group Income Statement
Restated
Unaudited 6 months ended Unaudited 6 months ended Audited year ended
30 September 2015 30 September 2014 31 March 2015
----------------------------------------------- ------------------------------------------------ -------------------------------------------
Pre exceptionals Exceptionals Pre exceptionals Pre
(note 6) Total Exceptionals Total exceptionals Exceptionals Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Continuing
operations
Revenue 5 5,066,240 - 5,066,240 5,425,332 - 5,425,332 10,606,080 - 10,606,080
Cost of sales (4,638,535) - (4,638,535) (5,046,509) - (5,046,509) (9,781,910) - (9,781,910)
------------------ ------------- ------------ ------------------ -------------- ------------ ------------- -------------- ------------
Gross profit 427,705 - 427,705 378,823 - 378,823 824,170 - 824,170
Administration
expenses (147,726) - (147,726) (130,462) - (130,462) (262,923) - (262,923)
Selling and distribution
expenses (194,441) - (194,441) (183,370) - (183,370) (350,978) - (350,978)
Other operating
income 5,916 5,291 11,207 7,528 1,159 8,687 19,657 3,798 23,455
Other operating
expenses (3,067) (11,154) (14,221) (2,421) (3,635) (6,056) (8,210) (23,602) (31,812)
------------------ ------------- ------------ ------------------ -------------- ------------ ------------- -------------- ------------
Operating profit before
amortisation of
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November 10, 2015 02:00 ET (07:00 GMT)
intangible
assets 88,387 (5,863) 82,524 70,098 (2,476) 67,622 221,716 (19,804) 201,912
Amortisation of
intangible
assets (11,884) - (11,884) (12,320) - (12,320) (24,057) - (24,057)
------------------ ------------- ------------ ------------------ -------------- ------------ ------------- -------------- ------------
Operating profit 5 76,503 (5,863) 70,640 57,778 (2,476) 55,302 197,659 (19,804) 177,855
Finance costs (32,161) (3,819) (35,980) (29,164) - (29,164) (60,216) (2,191) (62,407)
Finance income 17,532 - 17,532 15,894 471 16,365 31,288 - 31,288
Equity accounted
investments'
profit after tax 279 - 279 118 - 118 402 - 402
------------------ ------------- ------------ ------------------ -------------- ------------ ------------- -------------- ------------
Profit before tax from
continuing
operations 62,153 (9,682) 52,471 44,626 (2,005) 42,621 169,133 (21,995) 147,138
Profit before tax from
discontinued
operations - - - 2,623 2,224 4,847 5,088 11,079 16,167
------------------ ------------- ------------ ------------------ -------------- ------------ ------------- -------------- ------------
Profit before
tax 62,153 (9,682) 52,471 47,249 219 47,468 174,221 (10,916) 163,305
Income tax
expense 7 (9,232) (1,037) (10,269) (5,173) - (5,173) (18,881) - (18,881)
------------------ ------------- ------------ ------------------ -------------- ------------ ------------- -------------- ------------
Profit after tax for the
financial period 52,921 (10,719) 42,202 42,076 219 42,295 155,340 (10,916) 144,424
------------------ ------------- ------------ ------------------ -------------- ------------ ------------- -------------- ------------
Profit
attributable
to:
Owners of the Parent 41,270 42,310 144,427
Non-controlling
interests 932 (15) (3)
------------ ------------ ------------
42,202 42,295 144,424
------------ ------------ ------------
Earnings per ordinary share
Basic -
continuing
operations 8 47.32p 45.26p 153.20p
------------ ------------ ------------
Basic - total
operations 8 47.32p 50.40p 171.97p
------------ ------------ ------------
Adjusted -
continuing
operations 8 70.29p 59.30p 202.22p
------------ ------------ ------------
Adjusted - total
operations 8 70.29p 62.53p 209.19p
------------ ------------ ------------
Diluted earnings per ordinary share
Diluted -
continuing
operations 8 46.91p 44.93p 152.10p
------------ ------------ ------------
Diluted - total
operations 8 46.91p 50.03p 170.73p
------------ ------------ ------------
Adjusted -
continuing
operations 8 69.69p 58.87p 200.76p
------------ ------------ ------------
Adjusted - total
operations 8 69.69p 62.07p 207.67p
------------ ------------ ------------
Group Statement of Comprehensive Income
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2015 2014 2015
GBP'000 GBP'000 GBP'000
Group profit for the period 42,202 42,295 144,424
Other comprehensive income:
Items that may be reclassified subsequently
to profit or loss
Currency translation:
- arising in the period 6,956 (7,903) (15,007)
- recycled to the Income Statement
on disposal - - (2,721)
Movements relating to cash flow
hedges (3,881) (4,004) (6,942)
Movement in deferred tax liability
on cash flow hedges 1,337 20 324
---------- ---------- ---------
4,412 (11,887) (24,346)
---------- ---------- ---------
Items that will not be reclassified
to profit or loss
Group defined benefit pension obligations:
- remeasurements 8,041 (12,129) (19,302)
- movement in deferred tax asset (1,132) 1,443 2,187
---------- ---------- ---------
6,909 (10,686) (17,115)
---------- ---------- ---------
Other comprehensive income for the
period, net of tax 11,321 (22,573) (41,461)
---------- ---------- ---------
Total comprehensive income for
the period 53,523 19,722 102,963
---------- ---------- ---------
Attributable to:
Owners of the Parent 51,996 20,034 103,555
Non-controlling interests 1,527 (312) (592)
---------- ---------- ---------
53,523 19,722 102,963
---------- ---------- ---------
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November 10, 2015 02:00 ET (07:00 GMT)
Group Balance Sheet
Unaudited Unaudited Audited
30 Sept. 30 Sept. 31 March
2015 2014 2015
Notes GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Property, plant and equipment 723,360 483,919 464,689
Intangible assets 1,115,861 784,608 759,179
Equity accounted investments 5,329 5,305 4,963
Deferred income tax assets 12,338 10,431 9,380
Derivative financial instruments 194,133 95,709 233,150
2,051,021 1,379,972 1,471,361
---------- ------------ ----------
Current assets
Inventories 402,658 399,395 320,655
Trade and other receivables 898,780 938,228 847,274
Derivative financial instruments 5,900 5,747 5,395
Cash and cash equivalents 1,458,748 1,075,909 1,260,942
---------- ------------ ----------
2,766,086 2,419,279 2,434,266
Assets classified as held for
sale - 57,624 12,196
2,766,086 2,476,903 2,446,462
Total assets 4,817,107 3,856,875 3,917,823
---------- ------------ ----------
EQUITY
Capital and reserves attributable to owners
of the Parent
Share capital 15,443 14,688 14,688
Share premium 274,339 83,032 83,032
Share based payment reserve 10 13,623 11,649 12,756
Cash flow hedge reserve 10 (13,006) (7,828) (10,462)
Foreign currency translation reserve 10 39,044 42,216 32,683
Other reserves 10 932 932 932
Retained earnings 849,323 776,509 849,119
---------- ------------ ----------
Equity attributable to owners
of the Parent 1,179,698 921,198 982,748
Non-controlling interests 24,314 4,525 4,245
---------- ------------ ----------
Total equity 1,204,012 925,723 986,993
---------- ------------ ----------
LIABILITIES
Non-current liabilities
Borrowings 1,285,721 1,209,269 1,314,386
Derivative financial instruments 1,083 16,177 92
Deferred income tax liabilities 75,060 26,892 30,533
Post employment benefit obligations 12 (79) 15,053 10,230
Provisions for liabilities and
charges 220,531 36,213 29,016
Deferred and contingent acquisition
consideration 40,319 40,285 40,149
Government grants 1,098 1,461 1,272
---------- ------------ ----------
1,623,733 1,345,350 1,425,678
---------- ------------ ----------
Current liabilities
Trade and other payables 1,383,587 1,287,277 1,312,136
Current income tax liabilities 27,952 25,057 16,095
Borrowings 199,657 218,222 149,472
Derivative financial instruments 18,891 7,992 7,902
Provisions for liabilities and
charges 24,799 5,335 8,096
Deferred and contingent acquisition
consideration 334,476 10,389 3,235
---------- ------------ ----------
1,989,362 1,554,272 1,496,936
Liabilities associated with assets
classified as held for sale - 31,530 8,216
1,989,362 1,585,802 1,505,152
Total liabilities 3,613,095 2,931,152 2,930,830
---------- ------------ ----------
Total equity and liabilities 4,817,107 3,856,875 3,917,823
---------- ------------ ----------
Net cash/(debt) included above
(including cash attributable to
assets held for sale) 11 153,429 (272,828) 29,987
---------- ------------ ----------
Group Statement of Changes in Equity
For the six Attributable to owners of the
months ended 30 Parent
September 2015
------------------------------------------------------------------------------------
Other Non-
Share Share Retained reserves controlling Total
capital premium earnings (note Total interests equity
10)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2015 14,688 83,032 849,119 35,909 982,748 4,245 986,993
Profit for the
period - - 41,270 - 41,270 932 42,202
Currency
translation - - - 6,361 6,361 595 6,956
Group defined
benefit pension
obligations:
- remeasurements - - 8,041 - 8,041 - 8,041
- movement in
deferred tax
asset - - (1,132) - (1,132) - (1,132)
Movements
relating to
cash
flow hedges - - - (3,881) (3,881) - (3,881)
Movement in
deferred tax
liability
on cash flow
hedges - - - 1,337 1,337 - 1,337
Total
comprehensive
income - - 48,179 3,817 51,996 1,527 53,523
Issue of share
capital (net
of expenses) 755 191,307 - - 192,062 - 192,062
Re-issue of
treasury shares - - 1,922 - 1,922 - 1,922
Share based
payment - - - 867 867 - 867
Dividends - - (49,897) - (49,897) - (49,897)
Non-controlling
interests
arising
on acquisition - - - - - 18,542 18,542
At 30 September
2015 15,443 274,339 849,323 40,593 1,179,698 24,314 1,204,012
--------------- ------------------ --------------- ------------- --------------- ---------------- ------------
For the six Attributable to owners of the
months ended 30 Parent
September 2014
----------------------------------------------------------------------------------
Other Non-
Share Share Retained reserves controlling Total
capital premium earnings (note Total interests equity
10)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2014 14,688 83,032 786,158 57,540 941,418 4,837 946,255
Profit for the
period - - 42,310 - 42,310 (15) 42,295
Currency
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translation - - - (7,606) (7,606) (297) (7,903)
Group defined
benefit pension
obligations:
-
remeasurements - - (12,129) - (12,129) - (12,129)
- movement in
deferred tax
asset - - 1,443 - 1,443 - 1,443
Movements
relating to
cash
flow hedges - - - (4,004) (4,004) - (4,004)
Movement in
deferred tax
liability
on cash flow
hedges - - - 20 20 - 20
Total
comprehensive
income - - 31,624 (11,590) 20,034 (312) 19,722
Re-issue of
treasury
shares - - 1,717 - 1,717 - 1,717
Share based
payment - - - 1,019 1,019 - 1,019
Dividends - - (42,990) - (42,990) - (42,990)
At 30 September
2014 14,688 83,032 776,509 46,969 921,198 4,525 925,723
--------------- ------------------ --------------- ------------- ------------- ---------------- -------------
For the year Attributable to owners of the
ended 31 March Parent
2015
---------------------------------------------------------------------------------
Other Non-
Share Share Retained reserves controlling Total
capital premium earnings (note Total interests equity
10)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2015 2014 2015
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Profit for the period 42,202 42,295 144,424
Add back non-operating expenses/(income)
- tax 10,269 5,173 18,881
- share of equity accounted investments'
profit (279) (401) (489)
- net operating exceptionals 5,863 252 8,725
- net finance costs 18,448 12,915 31,313
---------- ---------- ----------
Group operating profit before
exceptionals 76,503 60,234 202,854
Share-based payments expense 867 1,019 2,126
Depreciation 32,534 30,222 59,710
Amortisation of intangible assets 11,884 13,009 25,345
Loss/(profit) on disposal of property,
plant and equipment 208 (643) (3,256)
Amortisation of government grants (176) (179) (358)
Other 3,346 (3,342) (11,159)
(Increase)/decrease in working
capital (4,427) (82,462) 102,556
---------- ---------- ----------
Cash generated from operations
before exceptionals 120,739 17,858 377,818
Exceptionals (10,386) (3,631) (16,454)
---------- ---------- ----------
Cash generated from operations 110,353 14,227 361,364
Interest paid (31,348) (27,513) (59,678)
Income tax paid (15,927) (13,066) (32,361)
---------- ---------- ----------
Net cash flows from operating
activities 63,078 (26,352) 269,325
---------- ---------- ----------
Investing activities
Inflows:
Proceeds from disposal of property,
plant and equipment 3,439 3,249 16,054
Government grants received - 52 52
Dividends received from equity
accounted investments - 647 828
Disposal of subsidiaries and equity
accounted investments 2,296 - 55,090
Interest received 17,479 14,383 31,222
23,214 18,331 103,246
---------- ---------- ----------
Outflows:
Purchase of property, plant and
equipment (54,695) (39,588) (79,401)
Acquisition of subsidiaries (134,744) (91,448) (101,738)
Net cash/(debt) acquired on acquisition
of subsidiaries 91,429 (5,812) (5,485)
Deferred and contingent acquisition
consideration paid (1,059) (8,215) (16,326)
---------- ---------- ----------
(99,069) (145,063) (202,950)
---------- ---------- ----------
Net cash flows from investing
activities (75,855) (126,732) (99,704)
---------- ---------- ----------
Financing activities
Inflows:
Proceeds from issue of shares 193,984 1,717 1,699
Increase in interest-bearing loans
and borrowings - 448,989 448,989
Increase in finance lease liabilities 68 - -
194,052 450,706 450,688
---------- ---------- ----------
Outflows:
Repayment of interest-bearing
loans and borrowings - (124,305) (169,631)
Repayment of finance lease liabilities (83) (551) (486)
Net cash outflow on derivative
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financial instruments - (13,869) (9,832)
Dividends paid to owners of the
Parent (49,897) (42,990) (66,050)
(49,980) (181,715) (245,999)
---------- ---------- ----------
Net cash flows from financing
activities 144,072 268,991 204,689
---------- ---------- ----------
Change in cash and cash equivalents 131,295 115,907 374,310
Translation adjustment 13,322 (26,222) (58,206)
Cash and cash equivalents at beginning
of period 1,129,665 813,561 813,561
---------- ---------- ----------
Cash and cash equivalents at end
of period 1,274,282 903,246 1,129,665
---------- ---------- ----------
Cash and cash equivalents consists
of:
Cash and short term bank deposits 1,458,748 1,075,909 1,260,942
Overdrafts (184,466) (174,130) (133,629)
Cash and short term deposits attributable
to assets held for sale - 1,467 2,352
1,274,282 903,246 1,129,665
---------- ---------- ----------
Notes to the Condensed Financial Statements
for the six months ended 30 September 2015
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 2015 have been prepared in accordance with the
Transparency (Directive 2004/109/EC) Regulations 2007, the related
Transparency rules of the Irish Financial Services Regulatory
Authority and in accordance with International Accounting Standard
34, Interim Financial Reporting (IAS 34) as adopted by the EU.
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 2015 and the comparative figures for the six
months ended 30 September 2014 are unaudited and have not been
reviewed by the Auditors. The summary financial statements for the
year ended 31 March 2015 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 Annual Report for the
financial year ended 31 March 2015 and are described in those
financial statements on pages 123 to 132.
The Group has adopted the following amendments to existing
standards during the period which did not result in a material
change to the Group's consolidated financial statements:
-- IAS 19 Defined Benefit Plans: Employee Contributions;
-- Annual Improvements 2010-2012 Cycle; and
-- Annual Improvements 2011-2013 Cycle.
There were a number of other amendments to existing standards
which became effective for the Group for the first time from 1
April 2015. None of these had a material impact on the Group.
3. Going Concern
Having reassessed the principal risks facing the Group (as
detailed on pages 12 to 15 of the Annual Report for the year ended
31 March 2015), the Directors believe that the Group is well placed
to manage these risks successfully.
The Directors have a reasonable expectation that the Group 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 'GBP'. 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
2015 2014 2015 2015 2014 2015
StgGBP1= StgGBP1= StgGBP1= StgGBP1= StgGBP1= StgGBP1=
Euro 1.3902 1.2361 1.2674 1.3541 1.2865 1.3749
Danish
Krone 10.3763 9.2234 9.4577 10.1013 9.5756 10.2705
Swedish
Krona 13.0057 11.2682 11.6866 12.7397 11.7670 12.7734
Norwegian
Krone 12.2304 10.2270 10.7266 12.8971 10.4451 11.9669
5. 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 Technology, DCC
Healthcare and DCC Environmental.
DCC Energy sells, markets and distributes oil products and
services for transport, commercial/industrial, marine, aviation and
home heating use in Europe. DCC Energy sells, markets and
distributes liquefied petroleum gas for similar uses in Europe. DCC
Energy also owns, operates and supplies unmanned and manned retail
service stations in Europe.
DCC Technology sells, markets and distributes a broad range of
consumer and SME focused technology products in Europe.
DCC Healthcare sells, markets and distributes pharmaceutical and
medical devices in Britain and Ireland. DCC Healthcare also
provides outsourced product development, manufacturing, packaging
and other services to health and beauty brand owners 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 by segment and geographic
location is as follows:
(a) By operating segment
Unaudited six months ended 30 September 2015
------------------------------------------------------------------------------
DCC DCC DCC DCC
Energy Technology Healthcare Environmental Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segment revenue 3,659,729 1,089,055 239,120 78,336 5,066,240
--------- --------- --------------- ------- -------------
Operating profit* 52,885 8,570 18,465 8,467 88,387
Amortisation of intangible
assets (7,246) (1,092) (3,307) (239) (11,884)
Net operating exceptionals
(note 6) (6,221) (2,503) 3,586 (725) (5,863)
--------- --------- --------------- ------- -------------
Operating profit 39,418 4,975 18,744 7,503 70,640
--------- --------- --------------- ------- -------------
Unaudited six months ended 30 September 2014
(restated)
--------------------------------------------------------------
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DCC DCC DCC DCC
Energy Technology Healthcare Environmental Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segment revenue 4,076,971 1,037,877 236,922 73,562 5,425,332
--------- --------------- --------------- ------- -------------
Operating profit* 31,934 15,204 15,902 7,058 70,098
Amortisation of intangible
assets (7,450) (1,402) (3,074) (394) (12,320)
Net operating exceptionals
(note 6) (1,788) (965) 308 (31) (2,476)
--------- --------------- --------------- ------- -------------
Operating profit 22,696 12,837 13,136 6,633 55,302
--------- --------------- --------------- ------- -------------
Audited year ended 31 March 2015
--------------------------------------------------------------------------------
DCC DCC DCC DCC
Energy Technology Healthcare Environmental Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segment revenue 7,624,082 2,350,284 488,114 143,600 10,606,080
--------- --------- --------------- ------- ------------
Operating profit* 119,392 49,341 39,689 13,294 221,716
Amortisation of intangible
assets (14,334) (2,794) (6,143) (786) (24,057)
Net operating exceptionals
(note 6) (7,137) (11,101) (1,161) (405) (19,804)
--------- --------- --------------- ------- ------------
Operating profit 97,921 35,446 32,385 12,103 177,855
--------- --------- --------------- ------- ------------
* Operating profit before amortisation of intangible assets and
net operating exceptionals
(b) By geography
Unaudited six months ended 30 September
2015
---------------------------------------------
Republic of Rest of
UK France Ireland the World Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segment revenue 3,537,671 485,229 318,768 724,572 5,066,240
-------------- ------- ------------- ------------- ---------------
Operating profit* 59,610 11,180 3,762 13,835 88,387
Amortisation of
intangible assets (7,095) (1,095) (551) (3,143) (11,884)
Net operating
exceptionals
(note 6) 477 (3,515) (1,648) (1,177) (5,863)
-------------- ------- ------------- ------------- ---------------
Operating profit 52,992 6,570 1,563 9,515 70,640
-------------- ------- ------------- ------------- ---------------
Unaudited six months ended 30 September
2014 (restated)
---------------------------------------------
Republic of Rest of
UK France Ireland the World Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segment revenue 4,086,447 95,802 327,627 915,456 5,425,332
------------- ------- ------------- -------------- ---------------
Operating profit* 56,490 999 1,105 11,504 70,098
Amortisation of
intangible assets (7,784) (231) (590) (3,715) (12,320)
Net operating
exceptionals
(note 6) (1,482) (309) (344) (341) (2,476)
------------- ------- ------------- -------------- ---------------
Operating profit 47,224 459 171 7,448 55,302
------------- ------- ------------- -------------- ---------------
Audited year ended 31 March 2015
--------------------------------------
Republic of Rest of
UK France Ireland the World Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segment revenue 8,023,403 210,275 717,077 1,655,325 10,606,080
------------ ------- ----------- ---------------- ---------------
Operating profit* 170,014 4,246 17,671 29,785 221,716
Amortisation of
intangible assets (15,200) (451) (1,164) (7,242) (24,057)
Net operating
exceptionals
(note 6) (12,822) (1,731) (5,222) (29) (19,804)
------------ ------- ----------- ---------------- ---------------
Operating profit 141,992 2,064 11,285 22,514 177,855
------------ ------- ----------- ---------------- ---------------
* Operating profit before amortisation of intangible assets and
net operating exceptionals
6. Exceptionals
Restated
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2015 2014 2015
GBP'000 GBP'000 GBP'000
Restructuring costs (6,458) (1,227) (15,027)
Impairment of goodwill - - (5,637)
Acquisition and related costs (4,633) (2,174) (3,396)
Impairment of property, plant and equipment - - (1,508)
Adjustments to deferred and contingent
acquisition consideration - 202 415
Gain arising from the Pihsiang legal
claim 5,201 - 894
Restructuring of Group defined benefit
pension schemes - - 6,381
Legal and other operating exceptional
items 27 723 (1,926)
Net operating exceptional items (5,863) (2,476) (19,804)
Mark to market of swaps and related debt (3,819) 471 (2,191)
---------- ---------- ---------
Net exceptional items before taxation (9,682) (2,005) (21,995)
Tax on the Pihsiang legal claim (1,037) - -
---------- ---------- ---------
Net exceptional items after taxation
(continuing operations) (10,719) (2,005) (21,995)
Net profit on disposal of Food & Beverage
division - - 8,214
Other net exceptional items relating
to discontinued operations - 2,224 2,865
---------- ---------- ---------
Net exceptional items (10,719) 219 (10,916)
---------- ---------- ---------
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The analysis of the net operating exceptional items is as
follows:
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2015 2014 2015
GBP'000 GBP'000 GBP'000
Exceptional operating income 5,291 1,159 3,798
Exceptional operating expense (11,154) (3,635) (23,602)
---------- ---------- ---------------
(5,863) (2,476) (19,804)
---------- ---------- ---------------
The Group incurred a net exceptional charge after tax of
GBP10.719 million in the first six months of the year. The net
charge principally reflects acquisition and restructuring costs and
an IAS 39 charge, offset by a receipt in respect of the Pihsiang
legal claim where there was a final cash recovery.
Acquisition costs include the professional and tax costs (such
as stamp duty) relating to the evaluation and completion of
acquisition opportunities. During the six month period, acquisition
related costs amounted to GBP4.633 million and restructuring costs
amounted to GBP6.458 million.
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 six months ended 30 September 2015 this
amounted to an exceptional charge of GBP3.819 million.
There was a final net receipt of GBP4.164 million in relation to
the Pihsiang legal claim.
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 16.0% (six months ended 30 September
2014: 13.0% and year ended 31 March 2015: 12.0%). The increase in
the Group's effective tax rate is primarily due to an increasing
proportion of profits generated in Continental Europe.
8. Earnings per Ordinary Share
6 months ended 30 September 6 months ended 30 September
2015 2014
---------------------------------------------------------------------- --------------------------------------------------------
Continuing Discontinued Continuing Discontinued
operations operations Total operations operations Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Profit
attributable
to owners of
the
Parent 41,270 - 41,270 37,999 4,311 42,310
Amortisation of
intangible
assets
after tax 9,315 - 9,315 9,780 621 10,401
Exceptionals
after
tax (note 6) 10,719 - 10,719 2,005 (2,224) (219)
-------------------------------------- -------------------- -------- --------------------- -------------------- -----------
Adjusted profit
after taxation
and
non-controlling
interests 61,304 - 61,304 49,784 2,708 52,492
-------------------------------------- -------------------- -------- --------------------- -------------------- -----------
6 months ended 30 September 6 months ended 30 September
2015 2014
---------------------------------------------------------------------- --------------------------------------------------------
Continuing Discontinued Continuing Discontinued
operations operations Total operations operations Total
Basic earnings pence pence pence pence
per
ordinary share pence pence
Basic earnings
per
ordinary share 47.32p - 47.32p 45.26p 5.14p 50.40p
Amortisation of
intangible
assets
after tax 10.68p - 10.68p 11.65p 0.74p 12.39p
Exceptionals
after
tax 12.29p - 12.29p 2.39p (2.65p) (0.26p)
-------------------------------------- -------------------- -------- --------------------- -------------------- -----------
Adjusted basic
earnings
per ordinary
share 70.29p - 70.29p 59.30p 3.23p 62.53p
-------------------------------------- -------------------- -------- --------------------- -------------------- -----------
Weighted average number of ordinary shares
in issue (thousands) 87,216 83,948
-------- -----------
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 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.
6 months ended 6 months ended 30 September
30 September 2014
2015
----------------------------------------------- ----------------------------------------------------
Continuing Discontinued Continuing Discontinued
operations operations Total operations operations Total
Diluted pence pence pence pence
earnings per
ordinary share pence pence
Diluted
earnings per
ordinary
share 46.91p - 46.91p 44.93p 5.10p 50.03p
Amortisation
of intangible
assets after
tax 10.59p - 10.59p 11.57p 0.73p 12.30p
Exceptionals
after tax 12.19p - 12.19p 2.37p (2.63p) (0.26p)
-------------- ---------------- ------------- ------------- ------------ -----------------------
Adjusted
diluted
earnings
per
ordinary
share 69.69p - 69.69p 58.87p 3.20p 62.07p
-------------- ---------------- ------------- ------------- ------------ -----------------------
Weighted average number of ordinary shares
in issue (thousands) 87,968 84,565
------------- -----------------------
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 have not been
satisfied as at the end of the reporting 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.
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The weighted average number of ordinary shares used in
calculating the diluted earnings per share for the six months ended
30 September 2015 was 87.968 million (six months ended 30 September
2014: 84.565 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:
Unaudited Unaudited
6 months 6 months
ended ended
30 Sept. 30 Sept.
2015 2014
'000 '000
Weighted average number of ordinary shares in
issue 87,216 83,948
Dilutive effect of options and awards 752 617
--------------- -----------------
Weighted average number of ordinary shares for
diluted earnings per share 87,968 84,565
--------------- -----------------
9. Dividends
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2015 2014 2015
GBP'000 GBP'000 GBP'000
Interim - paid 28.73 pence
per share on 28 November 2014 - - 24,123
Final - paid 55.81 pence
per share on 23 July 2015
(paid 50.73 pence per
share on 24 July 2014) 49,897 42,990 41,927
49,897 42,990 66,050
----------------------- ------------------------- ---------
On 9 November 2015, the Board approved an interim dividend of
33.04 pence per share (GBP29.220 million). These condensed interim
financial statements do not reflect this dividend payable.
10. Other Reserves
For the six months ended 30
September 2015
Foreign
Share based Cash flow currency
payment hedge translation Other
reserve reserve reserve reserves Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2015 12,756 (10,462) 32,683 932 35,909
Currency translation - - 6,361 - 6,361
Movements relating to cash
flow hedges - (3,881) - - (3,881)
Movement in deferred tax liability
on cash flow hedges - 1,337 - - 1,337
Share based payment 867 - - - 867
At 30 September 2015 13,623 (13,006) 39,044 932 40,593
------------------- --------- ----------- -------- ---------
For the six months ended
30 September 2014
Foreign
Share Cash flow currency
based
payment hedge translation Other
reserve reserve reserve reserves Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2014 10,630 (3,844) 49,822 932 57,540
Currency translation - - (7,606) - (7,606)
Movements relating to cash
flow hedges - (4,004) - - (4,004)
Movement in deferred tax liability
on cash flow hedges - 20 - - 20
Share based payment 1,019 - - - 1,019
At 30 September 2014 11,649 (7,828) 42,216 932 46,969
------------------- --------- ----------- -------- ---------
For the year ended 31 March
2015
Foreign
Share based Cash flow currency
payment hedge translation Other
reserve reserve reserve reserves Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'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
------------------- --------- ----------- -------- ---------
11. Analysis of Net Cash/(Debt)
Unaudited Unaudited Audited
30 Sept. 30 Sept. 31 March
2015 2014 2015
GBP'000 GBP'000 GBP'000
Non-current assets:
Derivative financial instruments 194,133 95,709 233,150
------------ ------------ ------------------
Current assets:
Derivative financial instruments 5,900 5,747 5,395
Cash and cash equivalents 1,458,748 1,075,909 1,260,942
------------ ------------ ------------------
1,464,648 1,081,656 1,266,337
------------ ------------ ------------------
Non-current liabilities:
Finance leases (199) (205) (213)
Derivative financial instruments (1,083) (16,177) (92)
Unsecured Notes (1,285,522) (1,209,064) (1,314,173)
------------ ------------ ------------------
(1,286,804) (1,225,446) (1,314,478)
------------ ------------ ------------------
Current liabilities:
Bank borrowings (184,466) (174,130) (133,629)
Finance leases (358) (344) (357)
Derivative financial instruments (18,891) (7,992) (7,902)
Unsecured Notes (14,833) (43,748) (15,486)
------------ ------------ ------------------
(218,548) (226,214) (157,374)
------------ ------------ ------------------
Net cash/(debt) excluding cash
attributable to
assets held for sale 153,429 (274,295) 27,635
Cash and short term deposits attributable
to
assets held for sale - 1,467 2,352
------------ ------------ ------------------
Net cash/(debt) including cash attributable
to
assets held for sale 153,429 (272,828) 29,987
------------ ------------ ------------------
12. Post Employment Benefit Obligations
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The Group's defined benefit pension schemes' assets were
measured at fair value at 30 September 2015. The defined benefit
pension schemes' liabilities at 30 September 2015 were updated to
reflect material movements in underlying assumptions.
The net deficit on the Group's post employment benefit
obligations decreased from GBP10.230 million at 31 March 2015 to a
net asset position of GBP79,000 at 30 September 2015. 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.
The following actuarial assumptions have been made in
determining the Group's retirement benefit obligation for the six
months ended 30 September 2015:
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2015 2014 2015
Discount rate
- Republic of Ireland 2.50% 2.50% 1.50%
- UK 4.00% 4.00% 3.35%
---------- ---------- ---------
13. 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 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 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
2015 2015 2015 2015
GBP'000 GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 160,146 70,862 4,735 235,743
Intangible assets - other intangible
assets 99,466 10,664 10,323 120,453
Deferred income tax assets 42 - - 42
--------- ----------- -------- ---------
Total non-current assets 259,654 81,526 15,058 356,238
--------- ----------- -------- ---------
Current assets
Inventories 9,885 18,852 15,683 44,420
Trade and other receivables 68,694 1,193 19,009 88,896
--------- ----------- -------- ---------
Total current assets 78,579 20,045 34,692 133,316
--------- ----------- -------- ---------
Equity
Non-controlling interests - - (18,542) (18,542)
--------- ----------- -------- ---------
Total equity - - (18,542) (18,542)
--------- ----------- -------- ---------
Liabilities
Non-current liabilities
Deferred income tax liabilities (37,797) (4,053) (2,591) (44,441)
Provisions for liabilities and
charges (172,557) (17,004) (78) (189,639)
Total non-current liabilities (210,354) (21,057) (2,669) (234,080)
--------- ----------- -------- ---------
Current liabilities
Trade and other payables (53,078) (2,612) (19,675) (75,365)
Provisions for liabilities and
charges (18,328) - - (18,328)
Current income tax liability (13,012) - (320) (13,332)
--------- ----------- --------
Total current liabilities (84,418) (2,612) (19,995) (107,025)
--------- ----------- -------- ---------
Identifiable net assets acquired 43,461 77,902 8,544 129,907
Intangible assets - goodwill 189,628 16,050 31,696 237,374
--------- ----------- -------- ---------
Total consideration 233,089 93,952 40,240 367,281
--------- ----------- -------- ---------
Satisfied by:
Cash - 93,952 40,792 134,744
Cash and cash equivalents acquired (89,777) - (1,652) (91,429)
--------- ----------- -------- ---------
Net cash (inflow)/outflow (89,777) 93,952 39,140 43,315
Deferred acquisition consideration 322,866 - 1,100 323,966
--------- ----------- -------- ---------
Total consideration 233,089 93,952 40,240 367,281
--------- ----------- -------- ---------
The acquisitions of Butagaz and Esso Retail France have been
deemed to be substantial transactions and separate disclosure of
the fair values of the identifiable assets and liabilities has
therefore been made. None of the remaining business combinations
completed during the period were considered sufficiently material
to warrant separate disclosure of the fair values attributable to
those combinations. The carrying amounts of the assets and
liabilities acquired, determined in accordance with IFRS, before
completion of the combination together with the adjustments made to
those carrying values disclosed above were as follows:
Book Fair value Fair
value adjustments value
Butagaz GBP'000 GBP'000 GBP'000
Non-current assets (excluding goodwill) 291,519 (31,865) 259,654
Current assets 81,456 (2,877) 78,579
Non-current liabilities (249,552) 39,198 (210,354)
Current liabilities (84,418) - (84,418)
--------- ----------- ---------
Identifiable net assets acquired 39,005 4,456 43,461
Goodwill arising on acquisition 194,084 (4,456) 189,628
--------- ----------- ---------
Total consideration 233,089 - 233,089
--------- ----------- ---------
Book Fair value Fair
value adjustments value
Esso Retail France GBP'000 GBP'000 GBP'000
Non-current assets (excluding goodwill) 70,862 10,664 81,526
Current assets 20,045 - 20,045
Non-current liabilities (17,004) (4,053) (21,057)
Current liabilities (2,612) - (2,612)
-------- ----------- --------
Identifiable net assets acquired 71,291 6,611 77,902
Goodwill arising on acquisition 22,661 (6,611) 16,050
-------- ----------- --------
Total consideration 93,952 - 93,952
-------- ----------- --------
Book Fair value Fair
value adjustments value
Others GBP'000 GBP'000 GBP'000
Non-current assets (excluding goodwill) 4,735 10,323 15,058
Current assets 34,692 - 34,692
Non-current liabilities and non-controlling
interests (18,935) (2,276) (21,211)
Current liabilities (19,995) - (19,995)
-------- ----------- --------
Identifiable net assets acquired 497 8,047 8,544
Goodwill arising on acquisition 39,743 (8,047) 31,696
-------- ----------- --------
Total consideration 40,240 - 40,240
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-------- ----------- --------
Book Fair value Fair
value adjustments value
Total GBP'000 GBP'000 GBP'000
Non-current assets (excluding goodwill) 367,116 (10,878) 356,238
Current assets 136,193 (2,877) 133,316
Non-current liabilities and non-controlling
interests (285,491) 32,869 (252,622)
Current liabilities (107,025) - (107,025)
--------- ----------- ---------
Identifiable net assets acquired 110,793 19,114 129,907
Goodwill arising on acquisition 256,488 (19,114) 237,374
--------- ----------- ---------
Total consideration 367,281 - 367,281
--------- ----------- ---------
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 2016 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 related costs included in other operating expenses
in the Group Income Statement amounted to GBP4.633 million (2014:
GBP2.174 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 GBP90.004 million.
The fair value of these receivables is GBP88.896 million (all of
which is expected to be recoverable) and is inclusive of an
aggregate allowance for impairment of GBP1.108 million.
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. There was no
contingent consideration attaching to any of the acquisitions
completed in the period.
There were no adjustments processed during the period to the
fair value of business combinations completed during the year ended
31 March 2015 where those fair values were not readily determinable
as at 31 March 2015.
The acquisitions during the period contributed GBP532.9 million
to revenues and GBP8.0 million to profit after tax. Had all the
business combinations effected during the period occurred at the
beginning of the period, total Group revenue for the six months
ended 30 September 2015 would be GBP5,539.6 million and total Group
profit after tax would be GBP53.7 million.
14. 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.
15. Related Party Transactions
There have been no related party transactions or changes in
related party transactions other than those described in the Annual
Report in respect of the year ended 31 March 2015 that could have a
material impact on the financial position or performance of the
Group in the six months ended 30 September 2015.
16. Discontinued Operations
The Group's discontinued operations for the six months ended 30
September 2014 and the year ended 31 March 2015 comprise the
results of the Group's former DCC Food & Beverage segment. The
conditions for the businesses disposed of to be classified as
discontinued operations were fulfilled in the second half of the
year ended 31 March 2015 and, consequently, the results for the six
months ended 30 September 2014 have been restated. The following
table details the results of discontinued operations included in
the Group Income Statement:
Unaudited Audited
6 months year
ended ended
30 Sept. 31 March
2014 2015
GBP'000 GBP'000
Revenue 89,024 143,360
------------------ --------------
Operating profit before amortisation of intangible
assets and exceptional items 3,145 6,483
Amortisation of intangible assets (689) (1,288)
------------------ --------------
Operating profit before exceptional items 2,456 5,195
Net finance costs (116) (194)
Share of equity accounted investments' profit
after tax 283 87
------------------ --------------
Profit before exceptional items and tax 2,623 5,088
Exceptional items 2,224 2,865
Profit on disposal of discontinued operations - 8,214
------------------ --------------
Profit before tax 4,847 16,167
Income tax expense (536) (404)
------------------ --------------
Profit from discontinued operations after tax 4,311 15,763
------------------ --------------
There were no discontinued operations in the six months ended 30
September 2015.
17. Events after the Balance Sheet Date
CUC
In October 2015 DCC Technology further expanded its European
footprint with its binding offer for the acquisition of CUC, a
cabling and connectors distribution business headquartered near
Paris. The initial assignment of fair values to identifiable net
assets acquired has been performed on a provisional basis given the
timing of closure of the transaction. The carrying amounts of the
assets and liabilities acquired, determined in accordance with
IFRS, before completion of the combination together with the
adjustments made to those carrying values were as follows:
Fair value
Book value adjustments Fair value
GBP'000 GBP'000 GBP'000
Non-current assets (excluding goodwill) 432 2,542 2,974
Current assets 12,384 - 12,384
Non-current liabilities (72) (966) (1,038)
Current liabilities (4,392) - (4,392)
---------- ----------- ----------
Identifiable net assets acquired 8,352 1,576 9,928
Goodwill arising on acquisition 7,848 (1,576) 6,272
---------- ----------- ----------
Total consideration (enterprise value) 16,200 - 16,200
---------- ----------- ----------
18. Board Approval
This report was approved by the Board of Directors of DCC plc on
9 November 2015.
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 Directors' Responsibilities
We confirm that to the best of our knowledge:
1. the condensed set of interim financial statements have been
prepared in accordance with IAS 34 Interim Financial Reporting as
adopted by the EU;
2. 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
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