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.

 

Financial highlights:

2022

2021

% change

% change CC1

Revenue

£10.837bn

£7.518bn

+44.1%

+44.4%

Adjusted operating profit2

£221.2m

£195.8m

+13.0%

+10.7%

DCC Energy

£132.5m

£118.4m

+11.9%

+12.4%

DCC Healthcare

£43.2m

£50.2m

-13.9%

-16.0%

DCC Technology

£45.5m

£27.2m

+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

£782.3m

£54.1m

 

 

                       

·    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 £221.2 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 £300 million committed to development since the Group's prior year results announcement in May 2022, including:

 

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.

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 £1,118.3 million (30 September 2021: £390.3 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 £300 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 Relations

Email: investorrelations@dcc.ie



Media enquiries:


Powerscourt (Eavan Gannon/Genevieve Ryan)

Tel: +44 20 7250 1446


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 to 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 £17.7 billion and adjusted operating profit of £589.2 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

£132.5m

£118.4m

+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 £132.5 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

£78.1m

£68.0m

+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

£54.4m

£50.4m

+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

£377.7m

£384.2m

-1.7%

-3.9%

Operating profit

£43.2m

£50.2m

-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

£2.541bn

£1.985bn

+28.0%

+27.4%

Operating profit

£45.5m

£27.2m

+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 £45.5 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

 


£'m

£'m

% change




 

Revenue

10,837

7,518

+44.1%

Adjusted operating profit1

 


 

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 profit1

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 share1

146.4 pence

134.2 pence

+9.1%

Dividend per share

60.04 pence

55.85 pence

+7.5%

Free cash flow2

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

 

 

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 '£'. 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 revenue increased by 44.1% (44.4% on a constant currency basis) to £10.837 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 £2.9 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 £221.2 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 £132.5 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 £45.5 million (52.7% ahead on a constant currency basis).

 

Finance costs (net) and other

Net finance and other costs increased to £31.9 million (2021: £26.9 million), primarily reflecting increased average gross debt and the increasing interest rate environment. Average net debt, excluding lease creditors, in the period was £883 million, compared to an average net debt of £211 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 £189.3 million. 


Net exceptional items and amortisation of intangible assets

The Group recorded a net exceptional charge after tax of £7.0 million in the first six months of the year as follows:

 


£'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 £5.1 million.

 

Restructuring and integration costs and other of £4.0 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 £2.5 million. The cumulative net exceptional credit taken in respect of IAS 39 ineffectiveness is £3.0 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 £50.4 million from £36.6 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 £132.3 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


£'m
£'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 £151.3 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 £448.8 million versus £25.2 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 £159.3 million (2021: £125.9 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 £103.9 million (2021 £67.0 million), was net of disposal proceeds of £7.8 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 £69.6 million (excluding right-of-use leased assets) in the period by £34.3 million.

 

Free cash flow in the six months ended 30 September 2022 of £37.6 million compares to £12.3 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 £41.7 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 £10.4 million.

 

Committed acquisition and capital expenditure

Committed acquisition and capital expenditure in the period amounted to £407.5 million as follows:

 

       Acquisitions

Capex

      Total

 

       £'m

    £'m

         £'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.£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 €245 million (£213 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 €120 million (£104 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 £782.3 million, cash of approximately £1.2 billion and undrawn committed bank facilities of £338 million. Lease creditors at the same date amounted to £336.0 million. In October 2022, DCC successfully raised a private placement issuance equivalent to £647.7 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 management 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

Exceptionals

(note 6)

 

Total

 

Pre exceptionals

Exceptionals

(note 6)

 

Total

 

Pre exceptionals

Exceptionals

(note 6)

 

Total


Notes

£'000

£'000

£'000

 

£'000

£'000

£'000

 

£'000

£'000

£'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

 


 

£'000

 

£'000


£'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

£'000

 

£'000


£'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 September 2022

Attributable to owners of the Parent Company

 

 

 

 

 

 

Other

 

Non-

 

 

Share

Share

Retained

reserves

 

controlling

Total

 

capital

premium

earnings

(note 10)

Total

interests

equity

 

£'000

£'000

£'000

£'000

£'000

£'000

£'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 September 2021

Attributable to owners of the Parent Company







Other


Non-



Share

Share

Retained

reserves


controlling

Total


capital

premium

earnings

(note 10)

Total

interests

equity


£'000

£'000

£'000

£'000

£'000

£'000

£'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

£'000

 

£'000


£'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 financial instruments


(8,188)


-


-

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 '£'. 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


          Stg£1=

          Stg£1=

          Stg£1=

 

          Stg£1=

           Stg£1=

          Stg£1=


 



 

 



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 £9.8 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                                                       




£'000


         £'000


£'000


£'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                                                        




£'000


         £'000


£'000


£'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                                                  




£'000


         £'000


£'000


£'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

 


£'000


£'000


          £'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                                                        











 




£'000


         £'000


£'000


£'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                                                        














£'000


         £'000


£'000


£'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                                                        














£'000


         £'000


£'000


£'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


£'000

 

£'000


£'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 items after taxation

91


-


-

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 £5.026 million.

 

Restructuring and integration costs and other of £4.019 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 £2.504 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 £3.039 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


£'000

 

£'000


£'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 £97.526 million (six months ended 30 September 2021: £84.507 million) and £144.481 million (six months ended 30 September 2021: £132.357 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



£'000

 

£'000


£'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 (£59.269 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 flow

currency

 

 


payment

hedge

translation

Other

 


reserve

reserve

reserve

reserves

Total


£'000

£'000

£'000

£'000

£'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 30 September 2021



Foreign




Share based

Cash flow

currency




payment

hedge

translation

Other



reserve

reserve

reserve

reserves

Total


£'000

£'000

£'000

£'000

£'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 2022



Foreign




Share based

Cash flow

currency




payment

hedge

translation

Other



reserve

reserve

reserve

reserves

Total


£'000

£'000

£'000

£'000

£'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


£'000

 

£'000


£'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 than

1 and 2

         2 and 5

Over

 


1 year

years

years

5 years

Total

At 30 September 2022

£'000

£'000

£'000

£'000

£'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


 

 

 

£'000

£'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

 

 


Total non-current assets

 

 



 

 

 



Current assets

 

 

 



Inventories

 

 

372

23,262


Trade and other receivables

 

 


Total current assets

 

 



 

 

 



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

 

 


Total consideration

 

 

35,197

167,044



 

 

 



Satisfied by:

 

 

 



Cash

 

 

32,509

152,865


Cash and cash equivalents acquired

 

 


Net cash outflow

 

 

31,335

141,281


Acquisition related liabilities

 

 


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 £5.026 million (six months ended 30 September 2021: £5.782 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 £2.1 million. The fair value of these receivables is £2.1 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 £14.9 million.

 

The acquisitions during the period contributed £3.9 million to revenues and £0.1 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 £7.745 million at 31 March 2022 to a net asset of £11.761 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 €120 million (£104 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 €245 million (£213 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 ended

months ended

 

Year ended


30 Sept.

30 Sept.

31 March


2022

2021

2022

 

£'000

£'000

£'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 ended

months ended

 

Year ended


30 Sept.

30 Sept.

31 March


2022

2021

2022


£'000

£'000

£'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

ended

6 months ended


 

30 Sept.

30 Sept.


 

2022

2021

Revenue (constant currency)

 

£'000

£'000

Revenue

 

10,837,130

7,518,329

Currency impact

 

22,396

-

Revenue (constant currency)

 

10,859,526

7,518,329

 


 

6 months ended

6 months ended


 

30 Sept.

30 Sept.


 

2022

2021

Adjusted operating profit (constant currency)

 

£'000

£'000

Adjusted operating profit

 

221,173

195,781

Currency impact

 

(4,415)

-

Adjusted operating profit (constant currency)

 

216,758

195,781

 


 

6 months ended

6 months ended


 

30 Sept.

30 Sept.

 

 

2022

2021

Adjusted earnings per share (constant currency)

 

£'000

£'000

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 ended

months ended

 

Year ended


30 Sept.

30 Sept.

31 March


2022

2021

2022


£'000

£'000

£'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 ended

months ended

 

Year ended


30 Sept.

30 Sept.

31 March


2022

2021

2022


£'000

£'000

£'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.

 


months ended

6 months ended

 

Year ended


30 Sept.

30 Sept.

31 March


2022

2021

2022


£'000

£'000

£'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 ended

months ended

 

Year ended


30 Sept.

30 Sept.

31 March


2022

2021

2022


£'000

£'000

£'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 ended

months ended


Year ended


30 Sept.

30 Sept.

31March


2022

2021

2022


£'000

£'000

£'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


£'000

£'000

£'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


£'000

£'000

£'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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