TIDMDCC
RNS Number : 5976F
DCC PLC
08 November 2022
8 November 2022
DCC Delivers Strong Growth and Development
DCC, the leading international sales, marketing and support
services group, today announces its results for the six months
ended 30 September 2022.
% change
Financial highlights: 2022 2021 % change CC1
-----------------------------------
Revenue GBP10.837bn GBP7.518bn +44.1% +44.4%
----------------------------------- ----------- --------- ---------
Adjusted operating profit2 GBP221.2m GBP195.8m +13.0% +10.7%
------------ ----------- --------- ---------
DCC Energy GBP132.5m GBP118.4m +11.9% +12.4%
------------ ----------- --------- ---------
DCC Healthcare GBP43.2m GBP50.2m -13.9% -16.0%
------------ ----------- --------- ---------
DCC Technology GBP45.5m GBP27.2m +67.4% +52.7%
------------ ----------- --------- ---------
Adjusted earnings per share2 146.4p 134.2p +9.1% +6.7%
------------ ----------- --------- ---------
Interim dividend 60.04p 55.85p +7.5%
------------ ----------- --------- ---------
Net debt (excl. lease creditors)3 GBP782.3m GBP54.1m
------------ ----------- --------- ---------
-- Strong growth in the seasonally less significant first half
of the year, a very good performance in the context of on-going
challenges in global commodity prices and the macro-economic
environment.
-- Operating profit increased by 13.0% (10.7% on a constant
currency basis) to GBP221.2 million, driven by strong organic
growth in DCC Energy and the prior year acquisition of Almo in DCC
Technology. Adjusted earnings per share increased 9.1% to 146.4
pence per share.
-- Interim dividend increased by 7.5% to 60.04 pence per share.
-- Excellent period of acquisition activity with approximately
GBP300 million committed to development since the Group's prior
year results announcement in May 2022, including:
o DCC Healthcare's recent completion of the acquisition of
Medi-Globe, its largest acquisition to date, significantly
expanding DCC Vital's presence in medical devices.
o DCC Energy has completed several acquisitions which expand its
services and renewable offering, including PVO , a leading
international distributor of solar panels; Protech, which provides
a wide range of renewable and energy efficient heating solutions;
and Freedom Heat Pumps, one of the UK's largest distributors of air
source heat pumps.
-- DCC expects that the year ending 31 March 2023 will be
another year of profit growth and development, notwithstanding the
challenging macro environment at present.
1 Constant currency ('CC') represents the retranslation of
foreign denominated current year results at prior year exchange
rates
2 Excluding net exceptionals and amortisation of intangible
assets
3 Net debt including lease creditors at 30 September 2022 was
GBP1,118.3 million (30 September 2021: GBP390.3 million)
Donal Murphy, Chief Executive, commented:
"DCC reported strong growth in the seasonally less significant
first half of our financial year. The Group continued to perform
well in a volatile and challenging environment, reflecting our
resilient business model and strong market positions.
We made good progress in delivering our priorities for the
allocation of capital. During the period we committed approximately
GBP300 million to acquisitions in the healthcare and energy
services and renewables sectors. The acquisitions in the period are
consistent with our aim to build a material position in the
European healthcare sector and ensuring we are leading the
decarbonisation of our energy customers. Our priorities are
consistent with the growth opportunities we see in our chosen
sectors of Energy, Healthcare and Technology and we continue to see
substantial opportunity in these sectors.
I want to thank all our colleagues for their dedication in
continuing to serve our customers with the essential products and
services they need every day. We are leading the energy transition
and accelerating our growth in the healthcare and technology
sectors."
Investor enquiries:
Kevin Lucey, Chief Financial Officer Tel: +353 1 2799 400
Rossa White, Head of Group Investor Email: investorrelations@dcc.ie
Relations
Media enquiries:
Powerscourt (Eavan Gannon/Genevieve Tel: +44 20 7250 1446
Ryan)
Email: DCC@powerscourt-group.com
Presentation of results - audio webcast and conference call
details
DCC will host a live audio webcast and conference call of the
presentation at 09.00 today. The slides for this presentation can
be downloaded from DCC's website, www.dcc.ie .
Please click here t o access the webcast.
The access details for the conference call are as follows:
Ireland: +353 (0) 1 536 9584
UK: +44 (0) 203 936 2999
International: +44 (0) 203 936 2999
Passcode: 859286
This report, presentation slides and a replay of the audio will
be made available at www.dcc.ie .
About DCC plc
DCC is a leading international sales, marketing and support
services group with a clear focus on sustainable growth. DCC is an
ambitious and entrepreneurial business operating in 23 countries,
supplying products and services used by millions of people every
day. Building strong routes to market, driving for results,
focusing on cash conversion and generating superior sustainable
returns on capital employed enable the Group to reinvest in its
business, creating value for its stakeholders.
Headquartered in Dublin, the Group operates across three
sectors: energy, healthcare and technology, employing over 16,000
people. DCC plc is listed on the London Stock Exchange and is a
constituent of the FTSE 100. In its financial year ended 31 March
2022, DCC generated revenue of GBP17.7 billion and adjusted
operating profit of GBP589.2 million.
DCC has an excellent record, delivering compound annual growth
of 14% in adjusted operating profit and generating an average
return on capital employed of approximately 19% over 28 years as a
public company.
Follow us on LinkedIn , Twitter .
www.dcc.ie
Forward-looking statements
This announcement contains some forward-looking statements that
represent DCC's expectations for its business, based on current
expectations about future events, which by their nature involve
risk and uncertainty. DCC believes that its expectations and
assumptions with respect to these forward-looking statements are
reasonable; however, because they involve risk and uncertainty as
to future circumstances, which are in many cases beyond DCC's
control, actual results or performance may differ materially from
those expressed in or implied by such forward-looking
statements.
Divisional Performance Reviews
DCC Energy 2022 2021 % change % change
CC
---------------------------------------
Volumes (billion litres equivalent) 1 7.197bn 7.060bn +1.9%
----------- ----------- --------- ---------
Operating profit GBP132.5m GBP118.4m +11.9% +12.4%
----------- ----------- --------- ---------
Operating profit per litre 1.84ppl 1.68ppl
----------- ----------- --------- ---------
DCC Energy recorded strong operating profit growth in the
seasonally less significant first half of the financial year.
Operating profit increased by 11.9% (12.4% on a constant currency
basis) to GBP132.5 million. Volumes grew 1.9%, driven by
acquisitions completed in the prior year as well as a rebound in
commercial and hospitality demand during the first quarter versus
the Covid-19 restrictions experienced in the prior year. DCC Energy
continued to make good progress during the first half in expanding
its capability and broadening its customer offering in energy
services and renewables and this was an important contributor to
the profit growth in the period. The business invested both
organically and through acquisition in capabilities across solar,
heat pumps, renewables (both liquid and electricity) and energy
services, further strengthening its capability to lead the energy
transition.
1 Billion litres equivalent provides a standard metric for the
different products and solutions that DCC Energy sells. Metric
tonnes and kilowatts of power are converted to litres. Separately,
much of the services and renewables that DCC Energy provides do not
have associated volumes such as solar installations, heat pump
solutions, energy efficiency services, lubricants and
refrigerants.
Energy Solutions 2022 2021 % change % change
CC
-------------------------------------
Volumes (billion litres equivalent) 4.816bn 4.685bn +2.8%
---------- ---------- --------- ---------
Operating profit GBP78.1m GBP68.0m +14.9% +15.4%
---------- ---------- --------- ---------
Operating profit per litre 1.62ppl 1.45ppl
---------- ---------- --------- ---------
Energy Solutions sold 4.8 billion litres in the first half of
the year, an increase of 2.8% over the prior year. The business
benefited from the first-time contribution of Naturgy Ireland
(acquired December 2021), while commercial and industrial volumes
also increased, reflecting improved activity after the lifting of
almost all Covid-19 related restrictions which were a feature in
the first quarter of the prior year.
Energy Solutions Continental Europe saw good demand from
domestic and commercial customers, leveraging the strong supply
positions the business has established across its markets. In
France, the business performed well, notwithstanding the
significant volatility experienced in the natural gas and power
sector of the market. The Austrian business performed strongly,
benefiting from its strong supply position and good cost control.
The businesses in Benelux and Germany both performed well,
continuing to see the benefit of recently integrated acquisitions.
The solar photovoltaic service offering continued to develop and
will be significantly enhanced by the recently completed
acquisition of PVO, a leading international distributor of solar PV
and related energy products.
Energy Solutions Britain and Ireland performed well during the
first half of the financial year, benefiting from the organic and
acquisitive expansion of its product and service offering in recent
years. The business continued its rollout of biofuels for
commercial and domestic customers and delivered good growth in
lubricants. The business also benefited from the acquisition of
Naturgy Ireland, which continues to develop its offering of
renewable solutions such as biogas, renewable electricity and
solar. The acquisition of Protech, which designs and installs
combined heat and power units for commercial and industrial
customers, has strengthened the service offering in renewable
solutions. The business also recently acquired Freedom Heat Pumps,
a leading value-added distributor of air source heat pumps and
accessories in the UK. The acquisition further expands DCC Energy's
range of solutions, products, supplier relationships and technical
expertise in the sales and marketing of heat pump solutions to
domestic and commercial customers.
Energy Solutions North America saw robust volume demand
notwithstanding the significantly higher energy prices throughout
the period. The business has continued to integrate acquisitions
completed in the prior year and has also further strengthened its
management and technology infrastructure and continued to build its
acquisition pipeline. Energy Solutions Nordics achieved excellent
volume growth driven by strong commercial demand. Combined with a
good supply position, operating profit grew strongly in the first
half of the year.
Mobility 2022 2021 % change % change
CC
-------------------------------------
Volumes (billion litres equivalent) 2.381bn 2.374bn +0.3%
---------- ---------- --------- ---------
Operating profit GBP54.4m GBP50.4m +7.7% +8.4%
---------- ---------- --------- ---------
Operating profit per litre 2.28ppl 2.12ppl
---------- ---------- --------- ---------
The Mobility business recorded strong growth in operating profit
in the first half of the financial year and expanded its presence
in renewable products and services. Volumes were modestly ahead of
the prior year. The business benefited from the full lifting of
Covid-19 restrictions in the first quarter, although summer volumes
were lower as holidaymakers travelled less by road relative to the
prior year. The business also benefited modestly from the
first-time contribution of the retail network in Luxembourg
(acquired September 2021).
In France, the business performed strongly in what was a
difficult operating environment, led by a very good supply chain
and logistics performance. The business continued its investment in
cleaner fuels and energy transition. The business achieved good
growth in E85 fuel volume after the investment in the prior year,
while the fast-charging infrastructure on the motorway network (in
partnership with Engie) will be operational before the end of the
financial year. The business also traded well in the Nordic region
and invested in new energy infrastructure by doubling its number of
EV fast chargers since the end of the last financial year. The
Mobility business in the UK achieved good growth, leveraging
investments completed in the prior year.
DCC Healthcare 2022 2021 % change % change
CC
------------------
Revenue GBP377.7m GBP384.2m -1.7% -3.9%
---------- ---------- --------- ---------
Operating profit GBP43.2m GBP50.2m -13.9% -16.0%
---------- ---------- --------- ---------
Operating margin 11.4% 13.1%
---------- ---------- --------- ---------
DCC Healthcare saw operating profits decline in the first half
of the financial year. As anticipated, this reflects the very
strong prior year comparatives, lower Covid-19 related sales and
the impact of labour availability, inflation and supply chain
issues. Over the last two financial years DCC Healthcare has
enhanced the scale and strategic positioning of the business
through acquisitions in the US and continental Europe, and
delivered very strong organic growth. Compound annual growth in
operating profit over this two-year period was 34%, approximately
half of which was organic. DCC Healthcare expects to report profit
growth for the full year driven by organic growth in the second
half of the year and the benefit of the recently completed
Medi-Globe acquisition.
DCC Vital, which is focused on the sales and marketing of
medical products to healthcare providers, was impacted by reduced
Covid-19 related sales in the first half of the financial year. The
underlying business performed well, growing strongly in medical
devices in Britain, as elective procedures began to recover. Sales
of anaesthesia and cardiac monitoring products in particular
rebounded well. DCC Vital also generated strong growth in primary
care, particularly in Germany which recorded good organic growth
and benefited from two modest bolt-on acquisitions. The ability of
healthcare systems to ramp up elective procedures since the
pandemic has been hampered by supply chain issues and clinical
staff shortages; DCC Vital remains well placed to benefit from the
continued recovery in activity as healthcare systems address these
issues.
DCC Vital recently completed the acquisition of Medi-Globe, DCC
Healthcare's largest acquisition to date. The acquisition
significantly expands DCC Vital's presence in the European
healthcare market, following on from the acquisition of primary
care supplier Wörner Medical in May 2021. The combination of DCC
Vital's existing medical devices activities with Medi-Globe will
create a leading international platform in single-use medical
devices for minimally invasive procedures, with strong product
development capability.
DCC Health & Beauty Solutions provides outsourced solutions
to international nutrition and beauty brand owners. During the
first half of the year the business was impacted by labour
availability, inflation and supply chain issues as the world
emerged from the Covid-19 pandemic. In Europe, the business saw
reduced demand from nutritional brands who destocked following the
very strong growth of recent years. In the US, the business
performed well despite the challenging labour and supply chain
environment, generating excellent growth in sales of effervescent
products to leading US nutrition brands. The beauty sales mix was
impacted by reduced demand from some premium beauty brands. DCC
Health & Beauty Solutions continued to invest in expanding
capacity and enhancing capability across its manufacturing
facilities, including progressing its nutritional gummy
manufacturing capability in both the UK and the US.
DCC Technology 2022 2021 % change % change
CC
------------------
Revenue GBP2.541bn GBP1.985bn +28.0% +27.4%
----------- ----------- --------- ---------
Operating profit GBP45.5m GBP27.2m +67.4% +52.7%
----------- ----------- --------- ---------
Operating margin 1.8% 1.4%
----------- ----------- --------- ---------
DCC Technology recorded very strong revenue and profit growth in
the first half of the year, driven by the acquisition of Almo
(acquired December 2021). Operating profit increased by 67.4%
(52.7% on a constant currency basis) to GBP45.5 million. The
slowdown in consumer confidence due to the challenging macro
environment began to have an impact across all markets during the
period, although the impact has varied by geography and end-user
category. DCC Technology has improved margins and exercised tight
cost control in the period.
Market conditions were most challenging in the consumer product
sectors, due to the impact on consumer confidence of the
substantial increase in the cost-of-living and uncertain economic
outlook. This was most evident in continental Europe and the UK but
was also a feature in North America. Demand in higher-margin B2B
sectors, such as Pro AV and Pro Audio products, held up well as
businesses generally maintained planned investment in their
technology infrastructure. The supply chain issues experienced by
the global technology market have improved, which has reduced
product shortages.
The North American business performed robustly in the first half
of the year, albeit behind expectations. Revenue and operating
profit were significantly ahead of the prior year due to the
acquisition of Almo and growth in the Pro AV and Pro Audio sectors.
The performance of consumer products was mixed; demand for domestic
and premium appliances and consumer electronics was robust, but the
market generally experienced much weaker demand during the summer
months for certain product segments, such as air-conditioners.
During the period the business successfully integrated its
pre-existing Pro AV business with the Pro AV operations of Almo to
create the largest distributor of Pro AV equipment in North
America. Following the progress made in recent years, DCC
Technology now has a very strong platform to develop and expand its
business in North America.
The more pronounced economic uncertainty in Europe compared with
the US led to lower demand in continental European markets. Revenue
declined year on year, particularly for consumer products in the
retail and etail channels, but margin improvement and good cost
control limited the impact on profitability. Consistent with trends
seen elsewhere, activity in the B2B sectors in France and the Pro
AV businesses across the Nordics and DACH region performed
well.
In the UK and Ireland, the business performed robustly and in
line with expectations, notwithstanding the impact of the economic
environment on demand. The UK business benefited from more stable
operating conditions following constraints last year caused by
supply chain and labour shortages and the implementation of new
warehouse management systems. The business in Ireland recorded good
organic revenue and operating profit growth in the first half of
the financial year.
Group Financial Review
A summary of the Group's results for the six months ended 30
September 2022 is as follows:
2022 2021
GBP'm GBP'm % change
Revenue 10,837 7,518 +44.1 %
Adjusted operating profit(1)
DCC Energy 132.5 118.4 +11.9%
DCC Healthcare 43.2 50.2 -13.9%
DCC Technology 45.5 27.2 +67.4%
Group adjusted operating profit(1) 221.2 195.8 +13.0%
Finance costs (net) and other (31.9) (26.9)
Profit before net exceptionals, amortisation of intangible assets and tax 189.3 168.9 +12.1%
Net exceptional charge before tax and non-controlling interests (6.6) (17.3)
Amortisation of intangible assets (50.4) (36.6)
Profit before tax 132.3 115.0
Taxation (27.1) (24.3)
Profit after tax 105.2 90.7
Non-controlling interests (7.7) (6.2)
Attributable profit 97.5 84.5
Adjusted earnings per share(1) 146.4 pence 134.2 pence +9.1%
Dividend per share 60.04 pence 55.85 pence +7.5%
Free cash flow(2) 37.6 12.3
Net debt at 30 September (excluding lease creditors) 782.3 54.1
Lease creditors 336.0 336.2
Net debt at 30 September (including lease creditors) 1,118.3 390.3
(1) Excluding net exceptionals and amortisation of intangible assets
(2) After net working capital and net capital expenditure but before net exceptionals, interest
and tax payments
Income Statement Review
Reporting currency
The Group's financial statements are presented in sterling,
denoted by the symbol 'GBP'. The principal exchange rates used for
the translation of results into sterling are set out in note 4,
Reporting Currency, on page 22.
The net impact of currency translation on the Group income
statement versus the prior period added approximately 2.3% to the
reported growth in operating profit, primarily due to the weakening
of the average sterling exchange rate versus the US Dollar.
Revenue
Overall, Group r evenue increased by 44.1% (44.4% on a constant
currency basis) to GBP10.837 billion, primarily due to
significantly higher revenues in DCC Energy where commodity prices
were materially higher than during the first six months of the
prior year.
DCC Energy sold 7.2 billion litres of product in the first half,
a 1.9% increase versus the prior year. Volume growth was driven by
acquisitions completed in the prior year as well as a rebound in
commercial and hospitality demand during the first quarter versus
the Covid-19 restrictions experienced in the prior year.
Combined revenue in DCC Healthcare and DCC Technology was GBP2.9
billion, an increase of 23.2% reflecting the acquisition of Almo
which was completed in the second half of the prior year.
Group adjusted operating profit
Group adjusted operating profit increased by 13.0% to GBP221.2
million (10.7% ahead on a constant currency basis), in the
seasonally less significant first half of the year, driven by good
organic growth in DCC Energy and the prior year acquisition of Almo
in DCC Technology. This represents a very good performance in the
context of on-going challenges in global commodity prices and the
macro-economic environment. Following very strong growth in the
prior year, operating profit was in line with the prior year
organically. Strong organic growth in DCC Energy was offset by the
more difficult trading environment across DCC Healthcare and DCC
Technology.
DCC Energy traded strongly during a period of significant
volatility in energy markets. Operating profit increased by 11.9%
(12.4% on a constant currency basis) to GBP132.5 million.
As anticipated, operating profit in DCC Healthcare declined by
13.9% reflecting the very strong prior year comparatives, lower
Covid-19 related sales and the impact of labour availability,
inflation and supply chain issues. DCC Healthcare expects to report
profit growth for the full year overall driven by organic growth in
the second half of the year and the benefit of the recently
completed Medi-Globe acquisition.
DCC Technology recorded very strong growth benefiting from the
acquisition of the Almo which completed in the second half of the
prior financial year. Operating profit increased 67.4% to GBP45.5
million (52.7% ahead on a constant currency basis) .
Finance costs (net) and other
Net finance and other costs increased to GBP31.9 million (2021:
GBP26.9 million), primarily reflecting increased average gross debt
and the increasing interest rate environment. Average net debt,
excluding lease creditors, in the period was GBP883 million,
compared to an average net debt of GBP211 million in the prior
year. The increase in average net debt excluding lease creditors
reflects the acquisition activity in the second half of the prior
year, particularly the acquisition of Almo.
Profit before net exceptional items, amortisation of intangible
assets and tax
Profit before net exceptional items, amortisation of intangible
assets and tax increased by 12.1% to GBP189.3 million.
Net exceptional items and amortisation of intangible assets
The Group recorded a net exceptional charge after tax of GBP7.0
million in the first six months of the year as follows:
GBP'm
Acquisition and related costs 5.1
Restructuring and integration costs and other 4.0
IAS 39 mark-to-market gain (2.5)
6.6
Tax attaching to exceptional items 0.4
Net exceptional charge 7.0
----------------------------------------------- ------
Acquisition and related costs include the professional fees and
tax costs relating to the evaluation and completion of acquisition
opportunities and amounted to GBP5.1 million.
Restructuring and integration costs and other of GBP4.0 million
relates to the restructuring of operations across a number of
businesses and acquisitions.
The level of ineffectiveness calculated under IAS 39 on the
hedging instruments related to the Group's US private placement
debt is charged or credited as an exceptional item. In the six
months ended 30 September 2022 , this amounted to an exceptional
non-cash gain of GBP2.5 million. The cumulative net exceptional
credit taken in respect of IAS 39 ineffectiveness is GBP3.0
million. This, or any subsequent similar non-cash charges or gains,
will net to zero over the remaining term of this debt and the
related hedging instruments.
The charge for the amortisation of acquisition related
intangible assets increased to GBP50.4 million from GBP36.6 million
in the prior year, with the increase primarily reflecting
acquisitions, notably Almo, completed during the second half of the
prior year.
Profit before tax
Profit before tax increased to GBP132.3 million.
Taxation
The effective tax rate for the Group in the first half of the
year of 19.5% is based on the anticipated mix of profits for the
full year. It compares to a full year effective tax rate in the
prior year of 18.3%, with the increase reflecting the increasingly
international footprint of the Group.
Adjusted earnings per share
Adjusted earnings per share increased by 9.1% to 146.4 pence,
reflecting the increase in profit before exceptional items and
goodwill amortisation.
Dividend
The Board has decided to pay an interim dividend of 60.04 pence
per share, which represents a 7.5% increase on the prior year
interim dividend of 55.85 pence per share. This dividend will be
paid on 9 December 2022 to shareholders on the register at the
close of business on 18 November 2022.
Cash Flow, Development & Financial Strength
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 2022
can be summarised as follows:
Six months ended 30 September 2022 2021
GBP'm GBP'm
Group operating profit 221.2 195.8
Increase in working capital (151.3) (183.2)
Depreciation (excluding ROU leased assets) and other 76.0 70.2
Operating cash flow (pre add-back for depreciation on ROU leased assets) 145.9 82.8
Capital expenditure (net) (103.9) (67.0)
42.0 15.8
Depreciation on ROU leased assets 35.6 32.4
Repayment of lease creditors (40.0) (35.9)
Free cash flow 37.6 12.3
Interest and tax paid, net of dividend from equity accounted investments (59.5) (53.4)
Free cash flow (after interest and tax) (21.9) (41.1)
Acquisitions (41.7) (162.4)
Dividends (117.2) (106.8)
Exceptional items (2.5) (9.8)
Share issues 0.3 0.4
Net outflow (183.0) (319.7)
Opening net debt (756.6) (150.2)
Translation and other (178.7) 79.6
Closing net debt (including lease creditors) (1,118.3) (390.3)
Analysis of closing net debt (including lease creditors):
Net debt at 30 September (excluding lease creditors) (782.3) (54.1)
Lease creditors at 30 September (336.0) (336.2)
(1,118.3) (390.3)
As expected, working capital increased by GBP151.3 million in
the first half of the financial year, reflecting the typical
seasonal outflow across the Group. The net investment through the
period in working capital reflects the increasing scale of the
Group's activities and seasonal working capital requirements,
particularly in DCC Technology and an investment in inventory
across the Energy Solutions business to underpin service levels to
customers. The absolute value of working capital at 30 September
2022 was GBP448.8 million versus GBP25.2 million (negative) at 30
September 2021, principally reflecting the prior year acquisition
of Almo and the aforementioned investment across DCC Energy.
Overall working capital days at 30 September 2022 was 6.8 days
sales (2021: negative 0.5 days sales) reflecting recently completed
acquisitions. DCC Technology selectively uses supply chain
financing solutions to sell, on a non-recourse basis, a portion of
its receivables relating to certain larger supply chain/sales and
marketing activities. The level of supply chain financing at 30
September 2022 was GBP159.3 million (2021: GBP125.9 million), with
the modest increase reflecting higher revenues in the UK business
following constraints in the prior year caused by product supply
disruption and warehouse upgrades. Supply chain financing had a
positive impact on Group working capital days of 2.4 days (30
September 2021: 2.5 days).
Net capital expenditure for the six months amounted to GBP103.9
million (2021 GBP67.0 million), was net of disposal proceeds of
GBP7.8 million, and reflects continued investment in development
initiatives across the Group.
Capital expenditure in DCC Energy primarily comprised
expenditure on tanks, cylinders, depot infrastructure and
installations and the continued rollout of 'Click and Collect'
services, supporting new and existing customers in Energy
Solutions. There was also continued development spend in relation
to the Avonmouth LPG storage facility in the UK. In Mobility, there
was investment in retail sites and upgrades across the business,
including adding further lower emission product capability such as
EV fast charging and related services in the Nordics. In DCC
Healthcare, the capital expenditure primarily related to increased
manufacturing capability and capacity across DCC Health &
Beauty Solutions, including investments in progressing gummy
capability in Europe and the US. Capital expenditure in DCC
Technology included a new fleet of electric forklift trucks in
North America along with warehouse and IT developments across the
division as part of the programme of continuous system improvement.
Net capital expenditure for the Group exceeded the depreciation
charge of GBP69.6 million (excluding right-of-use leased assets) in
the period by GBP34.3 million.
Free cash flow in the six months ended 30 September 2022 of
GBP37.6 million compares to GBP12.3 million in the prior year.
Total cash spend on acquisitions in the six months to 30
September 2022
The total cash spend on acquisitions in the six months ended 30
September 2022 was GBP41.7 million. This included the completion of
the acquisition of the Danish biogas plant, Frijsenborg Biogas, in
DCC Energy and a German primary care bolt-on acquisition in DCC
Healthcare which were announced in the prior year Results
Announcement in May 2022. Payment of deferred and contingent
acquisition consideration previously provided amounted to GBP10.4
million.
Committed acquisition and capital expenditure
Committed acquisition and capital expenditure in the period
amounted to GBP407.5 million as follows:
Acquisitions Capex Total
GBP'm GBP'm GBP'm
DCC Energy 90.6 87.1 177.7
DCC Healthcare 213.0 12.3 225.3
DCC Technology - 4.5 4.5
Total 303.6 103.9 407.5
---------------- -------------- ------- -------
Acquisition activity
The Group continues to be active from a development perspective.
Acquisition expenditure committed by the Group since the prior year
results announcement on 17 May 2022 amounted to c.GBP 300 million
and included:
DCC Energy
PVO
In November 2022, DCC completed the acquisition of PVO
International BV ("PVO"), a leading distributor of solar panels,
invertors, batteries and accessories used in the commercial,
industrial and domestic energy sectors across continental Europe.
PVO was established in 2014 and has grown rapidly to become one of
the leading solar solutions suppliers in Europe, with a
market-leading position in the Benelux, and growing positions in
eight other European countries including Germany, Poland and
Finland. The business is headquartered in Rosmalen, the
Netherlands, and employs approximately 50 people.
PVO is an excellent strategic fit for DCC. It will leverage
PVO's established market position in the fast-growing solar PV
market and DCC Energy's knowledge and experience in transitioning
customers to cleaner energy products and services including solar
solutions. The majority of the consideration for PVO was payable in
cash on completion, followed by earn out payments over three years
based on PVO's future trading.
Protech Group
DCC Energy acquired Protech Group in June 2022. Established in
2008, Protech Group provides a wide range of renewable and energy
efficient heating solutions to commercial and industrial customers
across the UK. The acquisition of Protech strengthens the range of
low carbon and renewable technologies for customers in the UK, as
well as market leading maintenance and services offerings.
DCC Energy also completed a number of small complementary
bolt-on acquisitions in the period in Sweden and Norway and a solar
business in Austria.
Freedom Heat Pumps
In October 2022, DCC Energy completed the acquisition of Freedom
Heat Pumps ("Freedom"). Freedom is one of the UK's largest
distributors of air source heat pumps and accessories required for
installation into residential properties, offering a value-added
distribution model, including pre and post-sales technical support
to installers. Freedom has approximately 400 active customers
including heat pump installers, builders' merchants, and smaller
distributors. The acquisition of Freedom is in line with DCC
Energy's strategy of accelerating the net zero journey of its
customers and investing in capabilities to build a strong position
in the sales, marketing and distribution of renewable energy
products and services.
Frijsenborg Biogas
In July 2022, DCC Energy entered a joint venture to became
co-owner of one of Denmark's largest farming biogas plants,
Frijsenborg Biogas. The investment expands DCC Energy's position in
the gas market at a time of progress for Danish biogas and enables
DCC to provide biogas solutions to its customers in the region.
DCC Healthcare
Medi-Globe
In October 2022, DCC Healthcare completed the acquisition of
Medi-Globe Technologies GmbH ("Medi-Globe"), an international
medical devices business focused on minimally invasive procedures.
The acquisition was based on an enterprise value of approximately
EUR245 million (GBP213 million) on a cash-free, debt-free
basis.
Medi-Globe, founded in 1990, is involved in the development,
manufacture and distribution of single-use devices for endoscopy in
diagnostic and therapeutic procedures. The business has grown
organically and through bolt-on acquisitions to become a leading
global player in its focus areas of gastroenterology and urology.
These are large and growing therapeutic areas, benefiting from
strong demographic and treatment trends. Medi-Globe has revenues of
approximately EUR120 million (GBP104 million) and employs
approximately 600 people. Its products are sold to hospitals and
procurement organisations in over 120 countries through direct
sales operations in Germany, France, Austria, Netherlands, Czechia
and Brazil, and an international network of distributors.
In May 2022, DCC Healthcare completed its second primary care
bolt-on acquisition in Germany following its initial market entry
through the Wörner acquisition in April 2021.
Financial strength
An integral part of the Group's strategy is the maintenance of a
strong and liquid balance sheet which, among other benefits,
enables it to take advantage of development opportunities as they
arise. At 30 September 2022, the Group had net debt (excluding
lease creditors) of GBP782.3 million, cash of approximately GBP1.2
billion and undrawn committed bank facilities of GBP338 million.
Lease creditors at the same date amounted to GBP336.0 million. In
October 2022, DCC successfully raised a private placement issuance
equivalent to GBP647.7 million to be drawn down in December 2022 to
refinance existing indebtedness.
Substantially all of the Group's term debt has been raised in
the US private placement market and has an average maturity of 4.3
years (6.1 years pro-forma for the recent private placement
transaction).
Management appointments
Dr. Fabian Ziegler commenced his role as CEO, DCC Energy on 1
November 2022. Fabian has extensive senior leadership experience in
the energy sector having held various senior management roles in
Shell plc during his 26-year career. He was Country Chair of Shell
Germany and Chair of the Management Board with responsibility for
Shell's businesses (upstream, downstream, power and renewables) in
the DACH region. In his previous role Fabian was at the forefront
of energy transition having developed and driven Shell's net zero
emissions plans for the region. Prior to this, Fabian was the Chief
Procurement Officer for the Shell Group. He has also led major
global transformation programmes and has held various general
management roles in fuels, lubricants and LPG. The breadth of
Fabian's leadership experience in the energy sector, coupled with
his ambition to drive the energy transition, will enable DCC to
accelerate its Leading with Energy strategy.
Following Fabian's appointment, Eddie O'Brien has moved into the
role of Group Chief Strategy & Sustainability Officer, from his
role as Interim CEO, DCC Energy.
DCC recently appointed Clive Fitzharris as Managing Director of
DCC Technology and he will also join the Group Management Team.
Clive was previously Managing Director of DCC Technology's
operations in North America and Continental Europe. Clive joined
DCC in 2009 and has held a number of senior management positions
across the Group, including as Group Head of Strategy &
Development. Clive succeeds Tim Griffin, who has been appointed as
CEO of DCC Technology's volume distribution businesses in the UK,
Ireland, the Middle East and France.
Principal risks and uncertainties
The Board of DCC is responsible for the Group's risk managem ent
and internal control systems, which are designed to identify,
manage and mitigate material risks to the achievement of the
Group's strategic and business objectives. The Board has approved a
Risk Management Policy which sets out delegated responsibilities
and procedures for the management of risk across the Group.
The principal risks and uncertainties facing the Group in the
short to medium term, as set out on pages 97 to 101 of the 2022
Annual Report (together with the principal mitigation measures),
continue to be the principal risks and uncertainties facing the
Group for the remaining six months of the financial year.
This is not an exhaustive statement of all relevant risks and
uncertainties. Matters which are not currently known to the Board
or events which the Board considers to be of low likelihood could
emerge and give rise to material consequences. The mitigation
measures that are in place in relation to identified risks are
designed to provide a reasonable and proportionate, and not an
absolute, level of protection against the impact of the events in
question.
Group Income Statement
Unaudited 6 months ended Unaudited 6 months ended Audited year ended
30 September 2022 30 September 2021 31 March 2022
------------------------------------------ ------------------------------------------ -------------------------------------------
Pre Exceptionals Pre Exceptionals Pre Exceptionals
exceptionals (note Total exceptionals (note 6) Total exceptionals (note 6) Total
6)
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 5 10,837,130 - 10,837,130 7,518,329 - 7,518,329 17,732,020 - 17,732,020
Cost of sales (9,759,622) - (9,759,622) (6,621,722) - (6,621,722) (15,694,347) - (15,694,347)
------------- ------------- ------------ ------------- ------------- ------------ ------------- ------------- -------------
Gross profit 1,077,508 - 1,077,508 896,607 - 896,607 2,037,673 - 2,037,673
Administration
expenses (341,072) - (341,072) (280,674) - (280,674) (517,128) - (517,128)
Selling and distribution
expenses (523,803) - (523,803) (430,615) - (430,615) (965,489) - (965,489)
Other operating
income/(expenses) 8,540 (9,045) (505) 10,463 (18,305) (7,842) 34,178 (46,534) (12,356)
------------- ------------- ------------ ------------- ------------- ------------ ------------- ------------- -------------
Adjusted operating profit 221,173 (9,045) 212,128 195,781 (18,305) 177,476 589,234 (46,534) 542,700
Amortisation of intangible
assets (50,405) - (50,405) (36,566) - (36,566) (84,340) - (84,340)
------------- ------------- ------------ ------------- ------------- ------------ ------------- ------------- -------------
Operating profit 5 170,768 (9,045) 161,723 159,215 (18,305) 140,910 504,894 (46,534) 458,360
Finance costs (41,469) - (41,469) (39,355) - (39,355) (77,205) - (77,205)
Finance income 10,185 2,504 12,689 12,056 967 13,023 23,075 1,192 24,267
Equity accounted
investments'
profit after tax (606) - (606) 390 - 390 314 - 314
------------- ------------- ------------ ------------- ------------- ------------ ------------- ------------- -------------
Profit before tax 138,878 (6,541) 132,337 132,306 (17,338) 114,968 451,078 (45,342) 405,736
Income tax expense 7 (26,630) (498) (27,128) (24,089) (184) (24,273) (81,235) 1,501 (79,734)
------------- ------------- ------------ ------------- ------------- ------------ ------------- ------------- -------------
Profit after tax for the
financial period 112,248 (7,039) 105,209 108,217 (17,522) 90,695 369,843 (43,841) 326,002
------------- ------------- ------------ ------------- ------------- ------------ ------------- ------------- -------------
Profit
attributable
to:
Owners of the Parent
Company 104,474 (6,948) 97,526 102,029 (17,522) 84,507 356,214 (43,841) 312,373
Non-controlling
interests 774 (91) 7,683 6,188 - 6,188 13,629 - 13,629
------------- ------------- ------------ ------------- ------------- ------------ ------------- ------------- -------------
112,248 (7,039) 105,209 108,217 (17,522) 90,695 369,843 (43,841) 326,002
------------- ------------- ------------ ------------- ------------- ------------ ------------- ------------- -------------
Earnings per ordinary share
Basic earnings per
share 8 98.83p 85.71p 316.78p
Diluted earnings
per share 8 98.77p 85.66p 316.36p
Adjusted basic
earnings
per share 8 146.42p 134.24p 430.11p
Adjusted diluted
earnings
per share 8 146.32p 134.16p 429.55p
------------ ------------ -------------
Group Statement of Comprehensive Income
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2022 2021 2022
GBP'000 GBP'000 GBP'000
Group profit for the period 105,209 90,695 326,002
Other comprehensive income:
Items that may be reclassified subsequently
to profit or loss
Currency translation 166,078 17,481 26,549
Movements relating to cash flow
hedges (59,784) 105,035 88,776
Movement in deferred tax liability
on cash flow hedges 10,089 (19,065) (16,138)
---------- ---------- ---------
116,383 103,451 99,187
---------- ---------- ---------
Items that will not be reclassified
to profit or loss
Group defined benefit pension obligations:
- remeasurements 3,685 (2,747) (748)
- movement in deferred tax asset (719) 494 210
---------- ---------- ---------
2,966 (2,253) (538)
---------- ---------- ---------
Other comprehensive income for the
period, net of tax 119,349 101,198 98,649
---------- ---------- ---------
Total comprehensive income for
the period 224,558 191,893 424,651
---------- ---------- ---------
Attributable to:
Owners of the Parent Company 214,010 185,077 411,485
Non-controlling interests 10,548 6,816 13,166
---------- ---------- ---------
224,558 191,893 424,651
---------- ---------- ---------
Group Balance Sheet
Unaudited Unaudited Audited
30 Sept. 30 Sept. 31 March
2022 2021 2022
Notes GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Property, plant and equipment 1,333,779 1,171,866 1,253,349
Right-of-use leased assets 326,306 328,432 327,551
Intangible assets and goodwill 2,791,596 2,343,529 2,634,449
Equity accounted investments 46,864 26,891 26,843
Deferred income tax assets 58,924 30,974 54,494
Derivative financial instruments 143,547 126,079 118,578
4,701,016 4,027,771 4,415,264
---------- ---------- ----------
Current assets
Inventories 1,454,627 941,545 1,133,666
Trade and other receivables 2,218,757 1,557,229 2,508,613
Derivative financial instruments 178,101 150,744 107,361
Cash and cash equivalents 1,258,065 1,437,725 1,394,272
---------- ---------- ----------
5,109,550 4,087,243 5,143,912
----------
Total assets 9,810,566 8,115,014 9,559,176
---------- ---------- ----------
EQUITY
Capital and reserves attributable to owners
of the Parent Company
Share capital 17,422 17,422 17,422
Share premium 883,652 883,318 883,321
Share based payment reserve 10 50,960 44,531 47,436
Cash flow hedge reserve 10 36,073 99,100 85,768
Foreign currency translation reserve 10 250,485 77,113 87,272
Other reserves 10 932 932 932
Retained earnings 1,766,614 1,607,747 1,783,033
---------- ---------- ----------
Equity attributable to owners
of the Parent Company 3,006,138 2,730,163 2,905,184
Non-controlling interests 75,661 66,582 65,379
---------- ---------- ----------
Total equity 3,081,799 2,796,745 2,970,563
---------- ---------- ----------
LIABILITIES
Non-current liabilities
Borrowings 1,851,052 1,568,450 1,933,482
Lease creditors 270,188 275,859 273,164
Derivative financial instruments 51,789 - 10,330
Deferred income tax liabilities 259,590 198,237 259,796
Post employment benefit obligations 13 (11,761) (5,517) (7,745)
Provisions for liabilities 306,536 282,641 284,191
Acquisition related liabilities 72,680 74,942 72,650
Government grants 352 367 356
---------- ---------- ----------
2,800,426 2,394,979 2,826,224
---------- ---------- ----------
Current liabilities
Trade and other payables 3,250,559 2,548,083 3,468,705
Current income tax liabilities 64,268 41,744 59,963
Borrowings 379,746 147,108 67,668
Lease creditors 65,770 60,322 63,538
Derivative financial instruments 79,426 53,140 28,634
Provisions for liabilities 62,137 47,723 50,279
Acquisition related liabilities 26,435 25,170 23,602
---------- ---------- ----------
3,928,341 2,923,290 3,762,389
---------- ---------- ----------
Total liabilities 6,728,767 5,318,269 6,588,613
---------- ---------- ----------
Total equity and liabilities 9,810,566 8,115,014 9,559,176
---------- ---------- ----------
Net debt included above (excluding
lease creditors) 11 (782,300) (54,150) (419,903)
---------- ---------- ----------
Group Statement of Changes in Equity
For the six months ended 30 Attributable to owners of the
September 2022 Parent Company
---------------------------------------------------
Other Non-
Share Share Retained reserves controlling Total
capital premium earnings (note 10) Total interests equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2022 17,422 883,321 1,783,033 221,408 2,905,184 65,379 2,970,563
Profit for the period - - 97,526 - 97,526 7,683 105,209
Currency translation - - - 163,213 163,213 2,865 166,078
Group defined benefit pension
obligations:
- remeasurements - - 3,685 - 3,685 - 3,685
- movement in deferred tax
asset - - (719) - (719) - (719)
Movements relating to cash
flow hedges - - - (59,784) (59,784) - (59,784)
Movement in deferred tax liability
on cash flow hedges - - - 10,089 10,089 - 10,089
Total comprehensive income - - 100,492 113,518 214,010 10,548 224,558
Re-issue of treasury shares - 331 - - 331 - 331
Share based payment - - - 3,524 3,524 - 3,524
Dividends - - (116,911) - (116,911) (266) (117,177)
------- ------- ---------- --------- ---------- ----------- ----------
At 30 September 2022 17,422 883,652 1,766,614 338,450 3,006,138 75,661 3,081,799
------- ------- ---------- --------- ---------- ----------- ----------
For the six months ended 30 Attributable to owners of the
September 2021 Parent Company
---------------------------------------------------
Other Non-
Share Share Retained reserves controlling Total
capital premium earnings (note 10) Total interests equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2021 17,422 882,924 1,631,797 115,291 2,647,434 58,210 2,705,644
Profit for the period - - 84,507 - 84,507 6,188 90,695
Currency translation - - - 16,853 16,853 628 17,481
Group defined benefit pension
obligations:
- remeasurements - - (2,747) - (2,747) - (2,747)
- movement in deferred tax
asset - - 494 - 494 - 494
Movements relating to cash
flow hedges - - - 105,035 105,035 - 105,035
Movement in deferred tax liability
on cash flow hedges - - - (19,065) (19,065) - (19,065)
Total comprehensive income - - 82,254 102,823 185,077 6,816 191,893
Re-issue of treasury shares - 394 - - 394 - 394
Share based payment - - - 3,562 3,562 - 3,562
Non-controlling interest arising
on acquisition - - - - - 2,058 2,058
Dividends - - (106,304) - (106,304) (502) (106,806)
------- ------- ---------- --------- ---------- ----------- ----------
At 30 September 2021 17,422 883,318 1,607,747 221,676 2,730,163 66,582 2,796,745
------- ------- ---------- --------- ---------- ----------- ----------
Group Cash Flow Statement
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2022 2021 2022
Notes GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Profit for the period 105,209 90,695 326,002
Add back non-operating expenses/(income)
- tax 27,128 24,273 79,734
- share of equity accounted investments'
profit 606 (390) (314)
- net operating exceptionals 6 9,045 18,305 46,534
- net finance costs 28,780 26,332 52,938
---------- ---------- ----------
Group operating profit before
exceptionals 170,768 159,215 504,894
Share-based payments expense 3,524 3,562 6,467
Depreciation (including right-of-use
leased assets) 105,223 101,428 205,780
Amortisation of intangible assets 50,405 36,566 84,340
Profit on disposal of property,
plant and equipment (1,872) (3,746) (8,916)
Amortisation of government grants (9) (9) (20)
Other 4,703 1,470 4,614
Increase in working capital (151,302) (183,210) (168,726)
---------- ---------- ----------
Cash generated from operations
before exceptionals 181,440 115,276 628,433
Exceptionals (2,492) (10,564) (30,270)
---------- ---------- ----------
Cash generated from operations 178,948 104,712 598,163
Interest paid (including lease
interest) (39,575) (35,281) (70,103)
Income tax paid (34,668) (34,894) (76,292)
---------- ---------- ----------
Net cash flows from operating
activities 104,705 34,537 451,768
---------- ---------- ----------
Investing activities
Inflows:
Proceeds from disposal of property,
plant and equipment 7,797 11,148 23,524
Proceeds on disposal of equity accounted
investment - 778 772
Interest received 10,137 12,033 22,759
17,934 23,959 47,055
---------- ---------- ----------
Outflows:
Purchase of property, plant and
equipment (111,671) (78,187) (194,353)
Acquisition of subsidiaries 12 (31,335) (141,281) (668,123)
Payment of accrued acquisition
related liabilities (10,378) (21,140) (52,006)
---------- ---------- ----------
(153,384) (240,608) (914,482)
---------- ---------- ----------
Net cash flows from investing
activities (135,450) (216,649) (867,427)
---------- ---------- ----------
Financing activities
Inflows:
Proceeds from issue of shares 331 394 397
Net cash inflow on derivative
financial instruments - 31,475 30,936
Increase in interest-bearing loans
and borrowings - - 372,426
331 31,869 403,759
---------- ---------- ----------
Outflows:
Repayment of interest-bearing
loans and borrowings - (105,166) (149,182)
Net cash outflow on derivative (8,188) - -
financial instruments
Repayment of lease creditors (35,396) (31,173) (65,580)
Dividends paid to owners of the
Parent Company 9 (116,911) (106,304) (160,599)
Dividends paid to non-controlling
interests (266) (502) (6,909)
(160,761) (243,145) (382,270)
---------- ---------- ----------
Net cash flows from financing
activities (160,430) (211,276) 21,489
---------- ---------- ----------
Change in cash and cash equivalents (191,175) (393,388) (394,170)
Translation adjustment 42,588 11,761 3,878
Cash and cash equivalents at beginning
of period 1,326,604 1,716,896 1,716,896
---------- ---------- ----------
Cash and cash equivalents at
end of period 1,178,017 1,335,269 1,326,604
---------- ---------- ----------
Cash and cash equivalents consists
of:
Cash and short-term bank deposits 11 1,258,065 1,437,725 1,394,272
Overdrafts 11 (80,048) (102,456) (67,668)
1,178,017 1,335,269 1,326,604
---------- ---------- ----------
Notes to the Condensed Financial Statements
for the six months ended 30 September 2022
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 2022 have been prepared in accordance with the
Transparency (Directive 2004/109/EC) Regulations 2007, the related
Transparency rules of the Irish Financial Services Regulatory
Authority and in accordance with IAS 34 Interim Financial Reporting
as adopted by the European Union.
The preparation of the interim financial statements requires
management to make judgements, estimates and assumptions that
affect the application of policies and reported amounts of certain
assets, liabilities, revenues and expenses together with disclosure
of contingent assets and liabilities. Estimates and underlying
assumptions are reviewed on an ongoing basis.
These condensed interim financial statements for the six months
ended 30 September 2022 and the comparative figures for the six
months ended 30 September 2021 are unaudited and have not been
reviewed by the Auditors. The summary financial statements for the
year ended 31 March 2022 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 2022 Annual Report and are
described in those financial statements on pages 221 to 229.
The following changes to IFRS became effective for the Group
during the period but did not result in material changes to the
Group's consolidated financial statements:
-- Onerous Contracts - Cost of Fulfilling a Contract - Amendments to IAS 37
-- Property, Plant and Equipment: Proceeds before Intended Use - Amendments to IAS 16
-- Reference to the Conceptual Framework - Amendments to IFRS 3
-- Annual Improvements to IFRS Standards 2018-2020
The Group has not applied certain new standards, amendments and
interpretations to existing standards that have been issued but are
not yet effective. They are either not expected to have a material
effect on the consolidated financial statements or they are not
currently relevant for the Group.
3. Going Concern
Having reassessed the principal risks facing the Group (as
detailed on pages 97 to 101 of the 2022 Annual Report), the
Directors believe that the Group is well placed to manage these
risks successfully. No concerns or material uncertainties have been
identified as part of our assessment.
The Directors have a reasonable expectation that DCC plc, and
the Group as a whole, has adequate resources to continue in
operational existence for the foreseeable future, a period of not
less than twelve months from the date of this report. For this
reason, the Directors continue to adopt the going concern basis of
accounting in preparing the condensed interim financial statements
.
4. Reporting Currency
The Group's financial statements are presented in sterling,
denoted by the symbol '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
2022 2021 2022 2022 2021 2022
StgGBP1= StgGBP1= StgGBP1= StgGBP1= StgGBP1= StgGBP1=
Euro 1.1776 1.1652 1.1750 1.1325 1.1621 1.1820
Danish Krone 8.7622 8.6661 8.7400 8.4219 8.6415 8.7918
Swedish Krona 12.3516 11.8445 12.0190 12.3435 11.8167 12.2187
Norwegian Krone 11.7220 11.8558 11.8654 11.9862 11.8129 11.4787
US Dollar 1.2356 1.3909 1.3694 1.1040 1.3456 1.3122
Canadian Dollar 1.5808 1.7238 1.7163 1.5177 1.7141 1.6425
Hong Kong Dollar 9.6922 10.8076 10.6580 8.6660 10.4804 10.2740
5. Segmental Reporting
DCC is an international sales, marketing and support services
group headquartered in Dublin, Ireland. Operating segments are
reported in a manner consistent with the internal reporting
provided to the chief operating decision maker. The chief operating
decision maker has been identified as Mr. Donal Murphy, Chief
Executive and his executive management team.
As disclosed on pages 22 to 27 of the Group's 2022 Annual
Report, the Group has organised all of its energy activities
(previously DCC LPG and DCC Retail & Oil) into one reportable
segment, DCC Energy, with effect from 1 April 2022.
The Group is organised into three operating segments (as
identified under IFRS 8 Operating Segments) and generates revenue
through the following activities:
DCC Energy operates through two business segments, Energy
Solutions and Mobility. The Energy Solutions business is focused on
reducing the complexity of energy transition and delivering
affordable energy solutions. The Mobility business is focused on
developing multi-energy networks and services for people and
businesses on the move. DCC Energy is accelerating the net zero
journey of energy consumers by leading the sales, marketing and
distribution of low carbon energy solutions.
DCC Healthcare is a leading healthcare business, providing
products and services to health and beauty brand owners and
healthcare providers.
DCC Technology is a leading route-to-market and supply chain
partner for global technology brands and customers. DCC Technology
provides a broad range of consumer, business and enterprise
technology products and services to retailers, resellers and
integrators and domestic appliances and lifestyle products to
retailers and consumers.
The chief operating decision maker monitors the operating
results of segments separately in order to allocate resources
between segments and to assess performance. Segment performance is
predominantly evaluated based on operating profit before
amortisation of intangible assets and net operating exceptional
items. Net finance costs and income tax are managed on a
centralised basis and therefore these items are not allocated
between operating segments for the purpose of presenting
information to the chief operating decision maker and accordingly
are not included in the detailed segmental analysis.
The consolidated total assets of the Group as at 30 September
2022 amounted to GBP9.8 billion. This figure was not materially
different to the equivalent figure at 31 March 2022 and therefore
the related segmental disclosure note has been omitted in
accordance with IAS 34 Interim Financial Reporting. Intersegment
revenue is not material and thus not subject to separate
disclosure.
An analysis of the Group's performance by segment and geographic location
is as follows:
(a) By operating segment
Unaudited six months ended 30 September
2022
--------------------------------------------------------------------------
DCC
DCC DCC
Energy
Healthcare Technology Total
GBP'000 GBP'000 GBP'000 GBP'000
Segment revenue 7,918,151 377,651 2,541,328 10,837,130
--------- -------- --------- ----------
Adjusted operating profit 132,432 43,222 45,519 221,173
Amortisation of intangible
assets (30,787) (3,241) (16,377) (50,405)
Net operating exceptionals
(note 6) (6,714) (1,479) (852) (9,045)
--------- -------- --------- ----------
Operating profit 94,931 38,502 28,290 161,723
--------- -------- --------- ----------
Unaudited six months ended 30 September
2021
--------------------------------------------
DCC
DCC DCC
Energy
Healthcare Technology Total
GBP'000 GBP'000 GBP'000 GBP'000
Segment revenue 5,148,801 384,224 1,985,304 7,518,329
--------- -------- --------- ---------
Adjusted operating profit 118,391 50,203 27,187 195,781
Amortisation of intangible
assets (26,053) (1,804) (8,709) (36,566)
Net operating exceptionals
(note 6) (7,667) (789) (9,849) (18,305)
--------- -------- --------- ---------
Operating profit 84,671 47,610 8,629 140,910
--------- -------- --------- ---------
Audited year ended 31 March 2022
-------------------------------------
DCC DCC DCC
Energy Healthcare Technology Total
GBP'000 GBP'000 GBP'000 GBP'000
Segment revenue 12,322,589 765,213 4,644,218 17,732,020
---------- -------- --------- ----------
Adjusted operating profit 407,132 100,415 81,687 589,234
Amortisation of intangible
assets (55,667) (6,092) (22,581) (84,340)
Net operating exceptionals
(note 6) (16,687) (6,540) (23,307) (46,534)
---------- -------- --------- ----------
Operating profit 334,778 87,783 35,799 458,360
---------- -------- --------- ----------
(b) By geography
The Group has a presence in 23 countries worldwide. The
following represents a geographical revenue analysis about the
country of domicile (Republic of Ireland) and countries with
material revenue representing over 10% of Group revenue.
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2022 2021 2022
GBP'000 GBP'000 GBP'000
Republic of Ireland 998,903 588,902 1,609,797
United Kingdom 3,807,095 3,122,439 6,632,084
France 1,730,440 1,383,777 3,251,238
United States 1,098,101 425,317 1,301,893
Other 3,202,591 1,997,894 4,937,008
----------- ------------ -----------
10,837,130 7,518,329 17,732,020
----------- ------------ -----------
(c) Disaggregation of revenue
The following table disaggregates revenue by primary geographical market,
major revenue lines and timing of revenue recognition. The use of revenue
as a metric of performance in the Group's Energy segment is of limited
relevance due to the influence of changes in underlying energy product
costs on absolute revenues. Whilst changes in underlying energy product
costs will change percentage operating margins, this has little relevance
in the downstream energy distribution market in which this segment
operates where profitability is driven by absolute contribution per
tonne/litre of product sold, and not a percentage margin. Accordingly,
management review geographic volume performance rather than geographic
revenue performance for this segment as country-specific GDP and weather
patterns can influence volumes. The disaggregated revenue information
presented below for DCC Healthcare and Technology, which can also be
influenced by country-specific GDP movements, is consistent with how
revenue is reported and reviewed internally.
As disclosed on pages 22 to 27 of the Group's 2022 Annual Report, the
Group has organised all of its energy activities (previously DCC LPG
and DCC Retail & Oil) into one reportable segment, DCC Energy, with
effect from 1 April 2022. Consequently, the Group will now report disaggregated
revenue across DCC Energy's two major revenue lines, energy solutions
and energy mobility. Comparative data has been restated accordingly.
Unaudited six months ended 30 September
2022
----------------------------------------------------------------------------------
DCC DCC DCC
Energy Healthcare Technology Total
GBP'000 GBP'000 GBP'000 GBP'000
Republic of Ireland (country
of domicile) 767,473 52,649 178,781 998,903
United Kingdom 2,763,070 201,827 842,198 3,807,095
France 1,575,703 - 154,737 1,730,440
North America 101,716 85,206 992,754 1,179,676
Other 2,710,189 37,969 372,858 3,121,016
--------------- ------------ -------------- ----------
7,918,151 377,651 2,541,328 10,837,130
--------------- ------------ -------------- ----------
Energy solutions products
and services 4,628,849 - - 4,628,849
Energy mobility products
and services 3,289,302 - - 3,289,302
Medical and pharmaceutical
products - 192,496 - 192,496
Nutrition and health &
beauty products - 185,155 - 185,155
Technology products and
services - - 2,541,328 2,541,328
7,918,151 377,651 2,541,328 10,837,130
--------------- ------------ -------------- ----------
Products transferred at
point in time 7,918,151 377,651 2,541,328 10,837,130
--------------- ------------ -------------- ----------
Unaudited six months ended 30 September
2021
-------------------------------------------------
DCC DCC DCC
Energy Healthcare Technology Total
GBP'000 GBP'000 GBP'000 GBP'000
Republic of Ireland (country
of domicile) 362,584 60,088 166,230 588,902
United Kingdom 1,948,260 208,998 965,181 3,122,439
France 1,225,292 - 158,485 1,383,777
North America 62,075 75,961 353,262 491,298
Other 1,550,590 39,177 342,146 1,931,913
--------- -------- --------- ---------
5,148,801 384,224 1,985,304 7,518,329
--------- -------- --------- ---------
Energy solutions products and
services (restated) 2,851,783 - - 2,851,783
Energy mobility products and
services (restated) 2,297,018 - - 2,297,018
Medical and pharmaceutical
products - 204,465 - 204,465
Nutrition and health &
beauty products - 179,759 - 179,759
Technology products and
services - - 1,985,304 1,985,304
5,148,801 384,224 1,985,304 7,518,329
--------- -------- --------- ---------
Products transferred at
point in time 5,148,801 384,224 1,985,304 7,518,329
--------- -------- --------- ---------
Audited year ended 31 March 2022
----------------------------------
DCC DCC DCC
Energy Healthcare Technology Total
GBP'000 GBP'000 GBP'000 GBP'000
Republic of Ireland (country
of domicile) 1,094,400 117,405 397,992 1,609,797
United Kingdom 4,229,986 419,088 1,983,010 6,632,084
France 2,900,787 - 350,451 3,251,238
North America 261,559 148,318 1,035,055 1,444,932
Other 3,835,857 80,402 877,710 4,793,969
---------- -------- --------- ----------
12,322,589 765,213 4,644,218 17,732,020
---------- -------- --------- ----------
Energy solutions products and
services (restated) 7,306,762 - - 7,306,762
Energy mobility products and
services (restated) 5,015,827 - - 5,015,827
Medical and pharmaceutical
products - 407,672 - 407,672
Nutrition and health &
beauty products - 357,541 - 357,541
Technology products and
services - - 4,644,218 4,644,218
---------- -------- --------- ----------
12,322,589 765,213 4,644,218 17,732,020
---------- -------- --------- ----------
Products transferred at
point in time 12,322,589 765,213 4,644,218 17,732,020
---------- -------- --------- ----------
6. Exceptionals
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2022 2021 2022
GBP'000 GBP'000 GBP'000
Acquisition and related costs (5,026) (5,782) (9,934)
Restructuring and integration costs and other (4,019) (4,523) (16,736)
Adjustments to contingent acquisition consideration - (8,000) (19,864)
Net operating exceptional items (9,045) (18,305) (46,534)
Mark to market of swaps and related debt 2,504 967 1,192
---------- ---------- ---------
Net exceptional items before taxation (6,541) (17,338) (45,342)
Income tax and deferred tax (charge)/credit
attaching to exceptional items (498) (184) 1,501
---------- ---------- ---------
Net exceptional items after taxation (7,039) (17,522) (43,841)
Non-controlling interests share of net exceptional 91 - -
items after taxation
---------- ---------- ---------
Net exceptional items attributable to owners
of the Parent Company (7,039) (17,522) (43,841)
---------- ---------- ---------
Acquisition and related costs include the professional fees and
tax costs (such as stamp duty) relating to the evaluation and/or
completion of acquisition opportunities and amounted to GBP5.026
million.
Restructuring and integration costs and other of GBP4.019
million relates to the restructuring of operations across a number
of businesses and acquisitions.
Most of the Group's debt has been raised in the US private
placement market, denominated in US dollars, euro and sterling.
Long-term interest and cross currency interest rate derivatives
have been utilised to achieve an appropriate mix of fixed and
floating rate debt across the three currencies. The level of
ineffectiveness calculated under IAS 39 on the fair value and cash
flow hedge relationships relating to this debt is charged or
credited as an exceptional item. In the six months ended 30
September 2022, this amounted to an exceptional non-cash gain of
GBP2.504 million. Following this credit, the cumulative net
exceptional credit taken in respect of the Group's outstanding US
Private Placement debt and related hedging instruments is GBP3.039
million. This, or any subsequent similar non-cash charges or gains,
will net to zero over the remaining term of this debt and the
related hedging instruments.
Adjustments to contingent acquisition consideration in the
comparative periods relate to increases in contingent consideration
payable in respect of acquisitions in DCC Technology and DCC Energy
where performance was ahead of expectations.
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 19.5% (six months ended 30 September
2021: 18% and year ended 31 March 2022: 18.3%).
8. Earnings per Ordinary Share
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2022 2021 2022
GBP'000 GBP'000 GBP'000
Profit attributable to owners of the Parent 97,526 84,507 312,373
Amortisation of intangible assets after
tax 40,007 30,328 67,919
Exceptionals after tax 6,948 17,522 43,841
---------- ---------- ---------
Adjusted profit after taxation and non-controlling
interests 144,481 132,357 424,133
---------- ---------- ---------
Basic earnings per ordinary share
Basic earnings per share is calculated by dividing the profit
attributable to owners of the Parent Company by the weighted
average number of ordinary shares in issue during the period,
excluding ordinary shares purchased by the Company and held as
treasury shares. The adjusted figures for basic earnings per
ordinary share (a non-GAAP financial measure) are intended to
demonstrate the results of the Group after eliminating the impact
of amortisation of intangible assets and net exceptionals.
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2022 2021 2022
pence pence pence
Basic earnings per ordinary share 98.83p 85.71p 316.78p
Amortisation of intangible assets after
tax 40.55p 30.76p 68.88p
Exceptionals after tax 7.04p 17.77p 44.45p
---------- ---------- ---------
Adjusted basic earnings per ordinary
share 146.42p 134.24p 430.11p
---------- ---------- ---------
Weighted average number of ordinary shares
in issue (thousands) 98,679 98,596 98,610
---------- ---------- ---------
Diluted earnings per ordinary share
Diluted earnings per ordinary share is calculated by adjusting
the weighted average number of ordinary shares outstanding to
assume conversion of all dilutive potential ordinary shares. Share
options and awards are the Company's only category of dilutive
potential ordinary shares. The adjusted figures for diluted
earnings per ordinary share (a non-GAAP financial measure) are
intended to demonstrate the results of the Group after eliminating
the impact of amortisation of intangible assets and net
exceptionals.
Employee share options and awards, which are performance-based,
are treated as contingently issuable shares because their issue is
contingent upon satisfaction of specified performance conditions in
addition to the passage of time. These contingently issuable shares
are excluded from the computation of diluted earnings per ordinary
share where the conditions governing exercisability would not have
been satisfied as at the end of the reporting period if that were
the end of the vesting period. The adjusted figures for diluted
earnings per ordinary share (a non-GAAP financial measure) are
intended to demonstrate the results of the Group after eliminating
the impact of amortisation of intangible assets and net
exceptionals.
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2022 2021 2022
pence pence pence
Diluted earnings per ordinary share 98.77p 85.66p 316.36p
Amortisation of intangible assets after
tax 40.51p 30.74p 68.79p
Exceptionals after tax 7.04p 17.76p 44.40p
---------- ---------- ---------
Adjusted diluted earnings per ordinary
share 146.32p 134.16p 429.55p
---------- ---------- ---------
Weighted average number of ordinary shares
in issue (dilutive, thousands) 98,745 98,654 98,739
---------- ---------- ---------
The earnings used for the purposes of the diluted earnings per
ordinary share calculations were GBP97.526 million (six months
ended 30 September 2021: GBP84.507 million) and GBP144.481 million
(six months ended 30 September 2021: GBP132.357 million) for the
purposes of the adjusted diluted earnings per ordinary share
calculations. The weighted average number of ordinary shares used
in calculating the diluted earnings per ordinary share for the six
months ended 30 September 2022 was 98.745 million (six months ended
30 September 2021: 98.654 million). A reconciliation of the
weighted average number of ordinary shares used for the purposes of
calculating the diluted earnings per ordinary share amounts is as
follows:
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2022 2021 2022
'000 '000 '000
Weighted average number of ordinary shares
in issue 98,679 98,596 98,610
Dilutive effect of options and awards 66 58 129
--------- --------- --------
Weighted average number of ordinary shares
for diluted earnings per share 98,745 98,654 98,739
--------- --------- --------
9. Dividends
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2022 2021 2022
GBP'000 GBP'000 GBP'000
Interim - paid 55.85 pence per share on
10 December 2021 - - 55,182
Final - paid 119.93 pence per share
on 21 July 2022
(paid 107.85 pence per share on 22
July 2021) 116,911 106,304 105,417
116,911 106,304 160,599
---------- ---------- ----------
On 7 November 2022, the Board approved an interim dividend of
60.04 pence per share (GBP59.269 million). These condensed interim
financial statements do not reflect this dividend payable.
10. Other Reserves
For the six months ended 30 September 2022 Foreign
Share based Cash currency
flow
payment hedge translation Other
reserve reserve reserve reserves Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2022 47,436 85,768 87,272 932 221,408
Currency translation - - 163,213 - 163,213
Movements relating to cash
flow hedges - (59,784) - - (59,784)
Movement in deferred tax liability
on cash flow hedges - 10,089 - - 10,089
Share based payment 3,524 - - - 3,524
-------- --------- ----------- -------- --------
At 30 September 2022 50,960 36,073 250,485 932 338,450
-------- --------- ----------- -------- --------
For the six months ended Foreign
30 September 2021
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 2021 40,969 13,130 60,260 932 115,291
Currency translation - - 16,853 - 16,853
Movements relating to cash
flow hedges - 105,035 - - 105,035
Movement in deferred tax liability
on cash flow hedges - (19,065) - - (19,065)
Share based payment 3,562 - - - 3,562
-------- --------- ----------- -------- --------
At 30 September 2021 44,531 99,100 77,113 932 221,676
-------- --------- ----------- -------- --------
For the year ended 31 March Foreign
2022
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 2021 40,969 13,130 60,260 932 115,291
Currency translation - - 27,012 - 27,012
Movements relating to cash
flow hedges - 88,776 - - 88,776
Movement in deferred tax liability
on cash flow hedges - (16,138) - - (16,138)
Share based payment 6,467 - - - 6,467
-------- --------- ----------- -------- --------
At 31 March 2022 47,436 85,768 87,272 932 221,408
-------- --------- ----------- -------- --------
11. Analysis of Net Debt
Unaudited Unaudited Audited
30 Sept. 30 Sept. 31 March
2022 2021 2022
GBP'000 GBP'000 GBP'000
Non-current assets:
Derivative financial instruments 143,547 126,079 118,578
-------------- ------------ ------------
Current assets:
Derivative financial instruments 178,101 150,744 107,361
Cash and cash equivalents 1,258,065 1,437,725 1,394,272
-------------- ------------ ------------
1,436,166 1,588,469 1,501,633
-------------- ------------ ------------
Non-current liabilities:
Derivative financial instruments (51,789) - (10,330)
Bank borrowings (461,958) - (388,660)
Unsecured Notes (1,389,094) (1,568,450) (1,544,822)
-------------- ------------ ------------
(1,902,841) (1,568,450) (1,943,812)
-------------- ------------ ------------
Current liabilities:
Derivative financial instruments (79,426) (53,140) (28,634)
Bank borrowings (80,048) (102,456) (67,668)
Unsecured Notes (299,698) (44,652) -
-------------- ------------ ------------
(459,172) (200,248) (96,302)
-------------- ------------ ------------
Net debt (excluding lease creditors) (782,300) (54,150) (419,903)
-------------- ------------ ------------
Lease creditors - non-current (270,188) (275,859) (273,164)
Lease creditors - current (65,770) (60,322) (63,538)
-------------- ------------ ------------
Total lease creditors (335,958) (336,181) (336,702)
-------------- ------------ ------------
Net debt (including lease creditors) (1,118,258) (390,331) (756,605)
-------------- ------------ ------------
An analysis of the maturity profile of the Group's net debt
(including lease creditors) at 30 September 2022 is as follows:
Between Between
Less 1 and 2 and Over
than 2 5
1 year years years 5 years Total
At 30 September 2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cash and short-term deposits 1,258,065 - - - 1,258,065
Overdrafts (80,048) - - - (80,048)
--------- --------- ----------- --------- -----------
Cash and cash equivalents 1,178,017 - - - 1,178,017
Bank borrowings - - (461,958) - (461,958)
Unsecured Notes (299,698) (356,226) (645,890) (386,978) (1,688,792)
Derivative financial instruments
- Unsecured Notes 76,013 61,915 28,876 (50) 166,754
Derivative financial instruments
- other 22,662 1,017 - - 23,679
--------- --------- ----------- --------- -----------
Net debt (excluding lease creditors)
976,994 (293,294) (1,078,972) (387,028) (782,300)
Lease creditors (65,770) (55,478) (98,564) (116,146) (335,958)
--------- --------- ----------- --------- -----------
Net debt (including lease
creditors) 911,224 (348,772) (1,177,536) (503,174) (1,118,258)
--------- --------- ----------- --------- -----------
The Group's Unsecured Notes fall due between 25 April 2023 and 4
April 2034 with an average maturity of 4.3 years at 30 September
2022. The full fair value of a hedging derivative is allocated to
the time period corresponding to the maturity of the hedged
item.
12. Business Combinations
A key strategy of the Group is to create and sustain market
leadership positions through acquisitions in markets it currently
operates in, together with extending the Group's footprint into new
geographic markets. In line with this strategy, the principal
acquisitions completed by the Group during the period, together
with percentages acquired, were as follows:
-- The acquisition by DCC Energy of 100% of Protech Group in
June 2022. Established in 2008, Protech Group provides a wide range
of renewable and energy efficient heating solutions, maintenance
and water services to commercial and industrial customers across
the UK. The acquisition of Protech significantly strengthens the
range of low carbon and renewable technologies in the DCC Energy
portfolio, as well as market leading maintenance and services
offerings; and
-- The acquisition by DCC Energy in July 2022 of 50% of
Frijsenborg Biogas, a Danish biogas plant. This investment expands
DCC Energy's position in the gas market at a time of progress for
Danish biogas and enables DCC to provide biogas solutions to its
customers in the region.
The acquisition data presented below reflects the fair value of
the identifiable net assets acquired (excluding cash and cash
equivalents acquired) in respect of acquisitions completed during
the six months ended 30 September 2022.
6 months 6 months
ended ended
30 Sept. 30 Sept.
2022 2021
GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 3,721 29,840
Right-of-use leased assets - 21,793
Equity accounted investments 18,260 -
Deferred income tax assets - 376
--------- ---------
Total non-current assets 21,981 52,009
--------- ---------
Current assets
Inventories 372 23,262
Trade and other receivables 2,115 26,999
--------- ---------
Total current assets 2,487 50,261
--------- ---------
Liabilities
Non-current liabilities
Deferred income tax liabilities (12) -
Lease creditors - (18,617)
Provisions for liabilities and
charges - (7,879)
Total non-current liabilities (12) (26,496)
--------- ---------
Current liabilities
Trade and other payables (2,295) (54,630)
Current income tax liability (890) (1,337)
Lease creditors - (3,176)
Total current liabilities (3,185) (59,143)
--------- ---------
Identifiable net assets acquired 21,271 16,631
Non-controlling interest arising
on acquisition - (2,058)
Intangible assets - goodwill 13,926 152,471
--------- ---------
Total consideration 35,197 167,044
--------- ---------
Satisfied by:
Cash 32,509 152,865
Cash and cash equivalents acquired (1,174) (11,584)
--------- ---------
Net cash outflow 31,335 141,281
Acquisition related liabilities 3,862 25,763
--------- ---------
Total consideration 35,197 167,044
--------- ---------
None of the business combinations completed during the period
were considered sufficiently material to warrant separate
disclosure of the fair values attributable to those
combinations.
There were no adjustments made to the carrying amounts of assets
and liabilities acquired in arriving at their fair values. The
initial assignment of fair values to identifiable net assets
acquired has been performed on a provisional basis in respect of a
number of the business combinations above given the timing of
closure of these transactions. Any amendments to these fair values
within the twelve-month timeframe from the date of acquisition will
be disclosable in the Group's condensed interim financial
statements for the six months ending 30 September 2023 as
stipulated by IFRS 3.
The principal factors contributing to the recognition of
goodwill on business combinations entered into by the Group are the
expected profitability of the acquired business and the realisation
of cost savings and synergies with existing Group entities.
Acquisition and related costs included in other operating
expenses in the Group Income Statement amounted to GBP5.026 million
(six months ended 30 September 2021: GBP5.782 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 GBP2.1 million. The
fair value of these receivables is GBP2.1 million (all of which is
expected to be recoverable).
None of the goodwill recognised in respect of acquisitions
completed during the period is expected to be deductible for tax
purposes.
The fair value of contingent consideration recognised at the
date of acquisition is calculated by discounting the expected
future payment to present value at the acquisition date. In
general, for contingent consideration to become payable,
pre-defined profit thresholds must be exceeded. On an undiscounted
basis, the future payments for which the Group may be liable for
acquisitions completed during the period range from nil to GBP14.9
million.
The acquisitions during the period contributed GBP3.9 million to
revenues and GBP0.1 million to profit after tax. The revenue and
profit of the Group determined in accordance with IFRS for the
period ended 30 September 2022 would not have been materially
different than reported in the Income Statement if the acquisition
date for all business combinations completed during the period had
been as of the beginning of the period.
13. Post Employment Benefit Obligations
The Group's defined benefit pension schemes' assets were
measured at fair value at 30 September 2022. The defined benefit
pension schemes' liabilities at 30 September 2022 were updated to
reflect material movements in underlying assumptions.
The Group's post employment benefit obligations moved from a net
asset of GBP7.745 million at 31 March 2022 to a net asset of
GBP11.761 million at 30 September 2022. This movement was primarily
driven by an actuarial gain on liabilities arising from an increase
in the discount rates used to value these liabilities.
The following actuarial assumptions have been made in
determining the Group's retirement benefit obligation for the six
months ended 30 September 2022:
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2022 2021 2022
Discount rate
- Republic of Ireland 4.10% 1.30% 2.10%
- United Kingdom 4.90% 2.00% 2.75%
- Germany 4.10% 1.30% 2.10%
---------- ---------- ---------
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 the
nature and scale of the related party transactions described in the
2022 Annual Report that could have had a material impact on the
financial position or performance of the Group in the six months
ended 30 September 2022.
16. Events after the Balance Sheet Date
PVO
In November 2022, DCC acquired PVO International BV ("PVO"), a
leading distributor of solar panels, invertors, batteries and
accessories used in the commercial, industrial and domestic energy
sectors across continental Europe. PVO is headquartered in
Rosmalen, the Netherlands, employing approximately 50 people and
has a market-leading position in the Benelux and growing positions
in eight other European countries including Germany, Poland and
Finland. An initial assignment of fair values to identifiable net
assets acquired has not been completed given the timing of the
closure of the transaction.
Medi-Globe
In October 2022, DCC Healthcare completed the acquisition of
Medi-Globe Technologies GmbH ("Medi-Globe"), an international
medical devices business focused on minimally invasive procedures.
Medi-Globe has revenues of approximately EUR120 million (GBP104
million) and employs approximately 600 people. Its products are
sold to hospitals and procurement organisations in over 120
countries through direct sales operations in Germany, France,
Austria, Netherlands, Czechia and Brazil and an international
network of distributors. The acquisition was based on an enterprise
value of approximately EUR245 million (GBP213 million) on a
cash-free, debt-free basis. An initial assignment of fair values to
identifiable net assets acquired has not been completed given the
timing of the closure of the transaction.
17. Board Approval
This report was approved by the Board of Directors of DCC plc on
7 November 2022.
18. Distribution of Interim Report
This report and further information on DCC is available at the
Company's website www.dcc.ie. A printed copy is available to the
public at the Company's registered office at DCC House,
Leopardstown Road, Foxrock, Dublin 18, Ireland.
Statement of Directors' Responsibilities
We confirm that to the best of our knowledge:
-- the condensed set of interim financial statements for the six
months ended 30 September 2022 have been prepared in accordance
with IAS 34 Interim Financial Reporting as adopted by the EU;
and
-- the interim management report includes a fair review of the information required by:
-- Regulation 8(2) of the Transparency (Directive 2004/109/EC)
Regulations 2007, being an indication of important events that have
occurred during the first six months of the financial year and
their impact on the condensed set of financial statements; and a
description of the principal risks and uncertainties for the
remaining six months of the year; and
-- Regulation 8(3) of the Transparency (Directive 2004/109/EC)
Regulations 2007, being related party transactions that have taken
place in the first six months of the current financial year and
that have materially affected the financial position or performance
of the entity during that period; and any changes in the related
party transactions described in the last annual report that could
do so.
On behalf of the Board
Mark Breuer Donal Murphy
Chairman Chief Executive
7 November 2022
Supplementary Financial Information
Alternative Performance Measures
The Group reports certain alternative performance measures
('APMs') that are not required under International Financial
Reporting Standards ('IFRS') which represent the generally accepted
accounting principles ('GAAP') under which the Group reports. The
Group believes that the presentation of these APMs provides useful
supplemental information which, when viewed in conjunction with our
IFRS financial information, provides investors with a more
meaningful understanding of the underlying financial and operating
performance of the Group and its divisions.
These APMs are primarily used for the following purposes:
-- to evaluate the historical and planned underlying results of our operations;
-- to set director and management remuneration; and
-- to discuss and explain the Group's performance with the investment analyst community.
None of the APMs should be considered as an alternative to
financial measures derived in accordance with GAAP. The APMs can
have limitations as analytical tools and should not be considered
in isolation or as a substitute for an analysis of our results as
reported under GAAP. These performance measures may not be
calculated uniformly by all companies and therefore may not be
directly comparable with similarly titled measures and disclosures
of other companies.
The principal APMs used by the Group, together with
reconciliations where the non-GAAP measures are not readily
identifiable from the financial statements, are as follows:
Adjusted operating profit ('EBITA')
Definition
This comprises operating profit as reported in the Group Income
Statement before net operating exceptional items and amortisation
of intangible assets. Net operating exceptional items and
amortisation of intangible assets are excluded in order to assess
the underlying performance of our operations. In addition, neither
metric forms part of Director or management remuneration
targets.
6 months 6 months
ended ended Year ended
30 Sept. 30 Sept. 31 March
2022 2021 2022
GBP'000 GBP'000 GBP'000
------------------------------------- --------- --------- -------------
Operating profit 161,723 140,910 458,360
Net operating exceptional items 9,045 18,305 46,534
Amortisation of intangible assets 50,405 36,566 84,340
------------------------------------- --------- --------- -------------
Adjusted operating profit ('EBITA') 221,173 195,781 589,234
------------------------------------- --------- --------- -------------
Net interest before exceptional items
Definition
The Group defines net interest before exceptional items as the
net total of finance costs and finance income before interest
related exceptional items as presented in the Group Income
Statement.
6 months 6 months
ended ended Year ended
30 Sept. 30 Sept. 31 March
2022 2021 2022
GBP'000 GBP'000 GBP'000
----------------------------------------- --------- --------- -------------
Finance costs before exceptional items (41,469) (39,355) (77,205)
Finance income before exceptional items 10,185 12,056 23,075
----------------------------------------- --------- --------- -------------
Net interest before exceptional items (31,284) (27,299) (54,130)
----------------------------------------- --------- --------- -------------
Constant currency
Definition
The translation of foreign denominated earnings can be impacted
by movements in foreign exchange rates versus sterling, the Group's
presentation currency. In order to present a better reflection of
underlying performance in the period, the Group retranslates
foreign denominated current year earnings at prior year exchange
rates.
6 months 6 months
ended ended
30 Sept. 30 Sept.
2022 2021
Revenue (constant currency) GBP'000 GBP'000
----------------------------- ----------- ----------
Revenue 10,837,130 7,518,329
Currency impact 22,396 -
----------------------------- ----------- ----------
Revenue (constant currency) 10,859,526 7,518,329
------------------------------ ----------- ----------
6 months 6 months
ended ended
30 Sept. 30 Sept.
2022 2021
Adjusted operating profit (constant currency) GBP'000 GBP'000
----------------------------------------------- --------- ---------
Adjusted operating profit 221,173 195,781
Currency impact (4,415) -
----------------------------------------------- --------- ---------
Adjusted operating profit (constant currency) 216,758 195,781
------------------------------------------------ --------- ---------
6 months 6 months
ended ended
30 Sept. 30 Sept.
2022 2021
Adjusted earnings per share (constant GBP'000 GBP'000
currency)
---------------------------------------------------- --------- ---------
Adjusted profit after taxation and non-controlling
interests (note 8) 144,481 132,357
Currency impact (3,118) -
---------------------------------------------------- --------- ---------
Adjusted profit after taxation and non-controlling
interests (constant currency) 141,363 132,357
Weighted average number of ordinary shares
in issue ('000) 98,679 98,596
----------------------------------------------------- --------- ---------
Adjusted earnings per share (constant currency) 143.26p 134.24p
----------------------------------------------------- --------- ---------
Effective tax rate
Definition
The Group's effective tax rate expresses the income tax expense
before exceptionals and deferred tax attaching to the amortisation
of intangible assets as a percentage of EBITA less net
interest.
6 months 6 months
ended ended Year ended
30 Sept. 30 Sept. 31 March
2022 2021 2022
GBP'000 GBP'000 GBP'000
---------------------------------------------- --------- --------- -------------
Adjusted operating profit 221,173 195,781 589,234
Net interest before exceptional items (31,284) (27,299) (54,130)
---------------------------------------------- --------- --------- -------------
Earnings before taxation 189,889 168,482 535,104
---------------------------------------------- --------- --------- -------------
Income tax expense 27,128 24,273 79,734
Income tax attaching to net exceptionals (498) (184) 1,501
Deferred tax attaching to amortisation
of intangible assets 10,398 6,238 16,421
---------------------------------------------- --------- --------- -------------
Total income tax expense before exceptionals
and deferred tax attaching to amortisation
of intangible assets 37,028 30,327 97,656
---------------------------------------------- --------- --------- -------------
Effective tax rate (%) 19.5% 18.0% 18.3%
---------------------------------------------- --------- --------- -------------
Net capital expenditure
Definition
Net capital expenditure comprises purchases of property, plant
and equipment, proceeds from the disposal of property, plant and
equipment and government grants received in relation to property,
plant and equipment.
6 months 6 months
ended ended Year ended
30 Sept. 30 Sept. 31 March
2022 2021 2022
GBP'000 GBP'000 GBP'000
------------------------------------------- --------- --------- -------------
Purchase of property, plant and equipment 111,671 78,187 194,353
Proceeds from disposal of property, plant
and equipment (7,797) (11,148) (23,524)
Net capital expenditure 103,874 67,039 170,829
------------------------------------------- --------- --------- -------------
Free cash flow
Definition
Free cash flow is defined by the Group as cash generated from
operations before exceptional items as reported in the Group Cash
Flow Statement after repayment of lease creditors and net capital
expenditure.
6 months 6 months
ended ended Year ended
30 Sept. 30 Sept. 31 March
2022 2021 2022
GBP'000 GBP'000 GBP'000
--------------------------------------- ---------- --------- -------------
Cash generated from operations before
exceptionals 181,440 115,276 628,433
Repayment of lease creditors (39,954) (35,911) (75,053)
Net capital expenditure (103,874) (67,039) (170,829)
--------------------------------------- ---------- --------- -------------
Free cash flow 37,612 12,326 382,551
--------------------------------------- ---------- --------- -------------
Free cash flow (after interest and tax payments)
Definition
Free cash flow (after interest and tax payments) is defined by
the Group as free cash flow after interest paid (excluding interest
relating to lease creditors), income tax paid, dividends received
from equity accounted investments and interest received. As noted
in the definition of free cash flow, interest amounts relating to
the repayment of lease creditors has been deducted in arriving at
the Group's free cash flow and are therefore excluded from the
interest paid figure in arriving at the Group's free cash flow
(after interest and tax payments).
6 months 6 months
ended ended Year ended
30 Sept. 30 Sept. 31 March
2022 2021 2022
GBP'000 GBP'000 GBP'000
-------------------------------------------- --------- --------- -------------
Free cash flow 37,612 12,326 382,551
Interest paid (including interest relating
to lease creditors) (39,575) (35,281) (70,103)
Interest relating to lease creditors 4,558 4,738 9,473
Income tax paid (34,668) (34,894) (76,292)
Interest received 10,137 12,033 22,759
-------------------------------------------- --------- --------- -------------
Free cash flow (after interest and tax
payments) (21,936) (41,078) 268,388
-------------------------------------------- --------- --------- -------------
Committed acquisition expenditure
Definition
The Group defines committed acquisition expenditure as the total
acquisition cost of subsidiaries as presented in the Group Cash
Flow Statement (excluding amounts related to acquisitions which
were committed to in previous years) and future acquisition related
liabilities for acquisitions committed to during the period.
6 months 6 months
ended ended Year
ended
30 Sept. 30 Sept. 31March
2022 2021 2022
GBP'000 GBP'000 GBP'000
------------------------------------------- --------- ----------- ----------
Net cash outflow on acquisitions during
the period 31,335 141,281 668,123
Net cash outflow on acquisitions which
were committed to in the previous period (25,377) (112,478) (114,658)
Acquisition related liabilities arising
on acquisitions during the period 3,862 25,763 47,381
Acquisition related liabilities which
were committed to in the previous period (420) (18,912) (21,510)
Amounts committed in the current period,
cash outflow post period end 294,240 42,081 24,100
------------------------------------------- --------- ----------- ----------
Committed acquisition expenditure 303,640 77,735 603,436
------------------------------------------- --------- ----------- ----------
Net working capital
Definition
Net working capital represents the net total of inventories,
trade and other receivables (excluding interest receivable), and
trade and other payables (excluding interest payable, amounts due
in respect of property, plant and equipment and current government
grants).
As at As at As at
30 Sept. 30 Sept. 31 March
2022 2021 2022
GBP'000 GBP'000 GBP'000
------------------------------------------- ------------ ------------ ------------
Inventories 1,454,627 941,545 1,133,666
Trade and other receivables 2,218,757 1,557,229 2,508,613
Less: interest receivable (232) (39) (170)
Trade and other payables (3,250,559) (2,548,083) (3,468,705)
Less: interest payable 15,181 14,625 13,981
Less: amounts due in respect of property,
plant and equipment 10,980 9,510 18,850
Less: government grants 13 17 16
------------------------------------------- ------------ ------------ ------------
Net working capital 448,767 (25,196) 206,251
------------------------------------------- ------------ ------------ ------------
Working capital (days)
Definition
Working capital days measures how long it takes in days for the
Group to convert working capital into revenue.
As at As at As at
30 Sept. 30 Sept. 31 March
2022 2021 2022
GBP'000 GBP'000 GBP'000
------------------------- ---------- ------------ ----------
Net working capital 448,767 (25,196) 206,251
September/March revenue 1,986,225 1,485,343 2,267,333
------------------------- ---------- ------------ ----------
Working capital (days) 6.8 days (0.5 days) 2.8 days
------------------------- ---------- ------------ ----------
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END
IR DZMGMLNZGZZM
(END) Dow Jones Newswires
November 08, 2022 02:00 ET (07:00 GMT)
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