London listing move ‘very beneficial’ for DCC

DCC's decision to move its main stock market listing to London a year ago has been "very beneficial", according to the energy and distribution group's chief executive Tommy Breen.

The group yesterday predicted the 2015 operating profit would be 10 per cent ahead of the €208 million it reported for the 12 months ended March 31st, assuming normal winter weather ensures demand in its key home heating oil business holds up.

DCC cancelled its Irish listing last year to qualify for the FTSE 250 index, which requires that most of a company's shares are traded in London, a move it hoped would broaden its shareholder base and increase brokers' coverage.

"It's had a very beneficial impact," Mr Breen said of the change following DCC's agm in Dublin yesterday. He added that part of the rationale was to get wider analyst coverage outside Ireland, which the board believed would be in the group's interest.

“We’re now 20-something in the FTSE and that carries a lot of weight with UK analysts. We have 12 brokers, inclusive of the Irish brokers, covering us and that’s been a big change and has got more attention for the stock.

Wider attention

“The share price has performed very strongly. It has outperformed all of the relevant indices; some of that is to do with our performance and some of that is to do with wider attention for the stock.”

DCC’s biggest division, its energy business, has close to one fifth of the British oil distribution market. It also distributes medical equipment and technology, including games consoles. It has operations in Ireland, Britain, Scandinavia and western Europe.

A statement issued ahead of yesterday’s meeting said DCC Energy traded in line with budget in the three months ended June 30th – the first quarter of its financial year – but was behind the same period last year when the weather was cooler.

Trading in DCC Technology, the group’s second largest division, was also in line with budget but ahead of the same three-month period in 2013 due to continued sales growth in IT and communications products.

DCC Healthcare performed ahead of budget and the prior year on the back of continued strong sales performance in DCC Health and Beauty Solutions, and from contributions from acquisitions completed over the last year.