DCC jumps on prospects, acquisitions

Geoff Percival

DCC shares climbed 4.5% yesterday as the support services group announced improved earnings in the first quarter and new acquisitions in the United States and the United Kingdom.

and technology.

She stated that the operating profits for the first quarter of her current fiscal year, covering the three months to the end of June, were significantly higher than the corresponding period from last year without giving any real numbers.

First quarter earnings are mainly attributable to the contribution of acquisitions completed in the prior year, and CDC reiterated its earnings growth guidance for the full year for the full year. the 12 months until the end of next March.

The group's profits are heavily weighted towards the second half of its fiscal year

The consensus among badysts is that DCC posts a profit of 445 million pounds sterling (504 million euros) for its fiscal year In progress.

also strengthened its technology division by buying two companies in the United Kingdom and the United States of a combined value of 110 million pounds sterling.

Acquisitions of Stampede, a provider of professional audiovisual products from Buffalo, and Kondor, a UK-based mobile product distributor, are expected to generate a return on investment of approximately 15% in the first year complete property

. DCC Technology will increase the size of the division based on a profit before tax, interest, depreciation and amortization of about 30%, "said Allan Smylie, an badyst at Davy

. the North American market and the two companies are considered to be in attractive growth areas.

The US company generated revenues of $ 280 million last year, while Kondor, which sells in the United Kingdom and continental Europe, made 110 million pounds in 2017.

two companies employ more than 200 people. Donal Murphy, head of DCC, said the Stampede agreement would provide the technology division with a platform for growth and development in North America

"Despite the limited weight of the first quarter, comments from CDC suggest that "The acquisition of Stampede marks the first technological entry of DCC in the United States and follows similar movements in the areas of energy and health and, in our opinion, should be welcomed "said Gerry Hennigan, Goodbody Analyst"

"At first glance, we estimate that both transactions will increase profits by about 3.5% over a full year," he said.

In May, CDC recorded earnings growth of 11% and revenues of 13% growth for the year until the end of March.