DCC reports 12.3% rise in profits

Industrial holding company DCC has reported a 12.3 per cent rise in its full-year pretax profit to €181.7 million following a number of successful acquisitions and what the company said was “strong organic growth”.

DCC shares rose 70 cents, or 4.6 per cent, to €15.80, the biggest gain since April 1st, by 9.50am in Dublin trading, reducing the stock's decline this year to 18 per cent.

The company boosted sales with the acquisition of fuel distributor CPL Petroleum and earnings at the energy division, its largest, rose 25 percent.

Today’s results include a one-off charge of €50 million associated with the cost of settling the court case with Fyffes.

In its results statement issued this morning Mr Flavin said DCC would release a statement later this week toexplain the board’s position in relation to him remaining as executive chairman. DCC will publish its annual report next month.

Mr Flavin said the board has “carefully considered whether any corporate governance issues arose”.

Last year the Supreme Court unanimously ruled that Mr Flavin engaged in illegal insider-trading when he sold DCC's stake in Fyffes in 2000 and the majority of DCC’s settlement will go to Fyffes.

Mr Flavin said there had been “substantial media coverage” of the case and added that the “true import of the High Court and Supreme Court judgments has not always been fairly reflected”.

DCC said when the costs of the settlement were off-set against a dividend and subsequent sale of its share in Manor Park Homebuilders, it had booked an exceptional profit before tax of €39.6 million.

DCC, which distributes of goods ranging from computer games to liquefied gas, said revenues over the year rose by 37 per cent to €5.53 billion.

The company said net income climbed to €164.5 million ($256.1 million), or 161.85 cents a share, in the year ended March 31st, compared with €140.2 million, or 156.58 cents during the previous year.

DCC has boosted sales by buying businesses such as UK fuel distributor Carlton Fuels.

Mr Flavin expects profit to rise by 2 per cent to 5 per cent this year, restrained by the pound's decline against the euro. Profit may rise as much as 15 per cent on a constant currency basis, he said.

Speaking to RTÉ's Morning IrelandMr Flavin said the pessimism surrounding Ireland's economy "overdone" and said the medium-term outlook was "very good." "We haven't experienced any evidence particularly of a slowdown in Ireland," Mr Flavin said.

Operating profit, which excludes one-time gains and costs, rose 19 per cent to €167.2 million, the company said.

The distributor plans to pay a final dividend of 36.12 cents a share, giving a total for the year of 56.67 cents. That represents an increase of 15 percent on the previous year's 49.28 cents.

Davy analyst David Jennings said the company had produced a “very strong set of full-year results”. The group's balance sheet “leaves it with excellent scope to do further deals over the next few years.”

Analysts at NCB Stockbrokers and Goodbody Stockbrokers said they would raise their fiscal 2009 forecasts by as much as 4 per cent after the statement.

Additional reporting Bloomberg